10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JULY 31, 2020

Commission File Number 1-7062

INNSUITES HOSPITALITY TRUST

(Exact name of registrant as specified in its charter)

Ohio	34-6647590
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

InnSuites Hotels Centre

1730 E. Northern Avenue, Suite 122

Phoenix, AZ 85020

(Address of principal executive offices)

Registrant’s telephone number, including area code: (602) 944-1500

Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or l5(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. Yes [  ] No [X]

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). [  ] Yes [X] No

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

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ] (Do not check if a smaller reporting company)
Smaller reporting company	[X]	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 [  ]

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

Aggregate market value of Shares of Beneficial Interest held by non-affiliates of the registrant as of July 31, 2020, based upon the closing sales price of the registrant’s Shares of Beneficial Interest on that date, as reported on the NYSE AMERICAN: $3,697,553

Number of outstanding Shares of Beneficial Interest, without par value, as of March 01, 2021: 9,092,410

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Shares of beneficial interest without par value	IHT	NYSE-American

TABLE OF CONTENTS

FOR THE QUARTERLY PERIOD ENDED JULY 31, 2020

		Pages
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements	2
	Consolidated Balance Sheets – January 31, 2020 and July 31, 2020 (unaudited)	2
	Consolidated Statements of Operations – Six Months Ended July 31,2020 and July 31, 2019 (unaudited)	3
	Consolidated Statements of Operations – Three Months Ended July 31,2020 and July 31, 2019 (unaudited)	4
	Condensed Consolidated Statements of Shareholders’ Equity – Six Months Ended July 31, 2020 and July 31, 2019.	5
	Condensed Consolidated Statements of Cash Flows – Six Months ended July 31 2020 and July 31, 2019	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4	Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	44
Item 1A	Risk Factors	44
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 4	Mine Safety Disclosures	45
Item 5	Other Information	45
Item 6	Exhibits	45
	Signature	46
	Exhibit Index

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	JULY 31, 2020			JANUARY 31, 2020
	(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	130,409		$	1,200,528
Short-Term Investments – Available For Sale Securities		60			-
Accounts Receivable, including approximately $46,000 and $375,000 from related parties and net of Allowance for Doubtful Accounts of approximately $22,000 and $15,000 as of July 31, 2020 and January 31, 2020, respectively		60,702			585,226
Income Tax Receivable		294,402			294,402
Advances to Affiliates - Related Party		1,000,000			1,000,000
Current Portion of Note Receivable (net)		-			91,667
Prepaid Expenses and Other Current Assets		216,334			77,806
Total Current Assets		1,701,907			3,249,629
Property, Equipment, and Hotel Properties (net)		8,566,027			8,983,323
Note Receivable		1,925,500			1,833,333
Operating Lease – Right of Use		2,183,413			2,197,364
Finance Lease – Right of Use		90,183			131,806
Investments		1,000,000			600,000
TOTAL ASSETS	$	15,467,030		$	16,995,455
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Expenses	$	1,778,239		$	1,384,971
Current Portion of Notes Payable - Related Party		-			161,440
Current Portion of Mortgage Notes Payable, net of Discount		166,768			160,849
Current Portion of Notes Payable to Banks, net of Discount		-			17,100
Current Portion of Other Notes Payable		730,017			806,712
Current Portion of Operating Lease Liability		55,420			168,780
Current Portion of Finance Lease Liability		27,192			31,123
Total Current Liabilities		2,757,636			2,730,975
Mortgage Notes Payable, net of Discount		5,857,446			5,944,819
Other Notes Payable		531,277			73,491
Operating Lease Liability, net of current portion		2,341,097			2,252,964
Finance Lease Liability, net of current portion		66,216			75,396
TOTAL LIABILITIES		11,553,672			11,077,645
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Shares of Beneficial Interest, without par value, unlimited authorization; 18,626,215 and 18,607,960 shares issued and 9,092,410 and 9,273,299 shares outstanding at July 31, 2020 and January 31, 2020, respectively		20,959,227			21,837,048
Treasury Stock, 9,533,805 and 9,334,916 shares held at cost at July 31, 2020 and January 31, 2020, respectively		(13,896,872	)		(13,689,533	)
TOTAL TRUST SHAREHOLDERS’ EQUITY		7,062,355			8,147,515
NON-CONTROLLING INTEREST		(3,148,997	)		(2,229,705	)
TOTAL EQUITY		3,913,358			5,917,810
TOTAL LIABILITIES AND EQUITY	$	15,467,030		$	16,995,455

See accompanying notes to unaudited condensed consolidated financial statements

2

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	FOR THE SIX MONTHS ENDED
	JULY 31,
	2020			2019
REVENUE
Room	$	2,128,038		$	3,465,936
Food and Beverage		32,978			32,407
Management and Trademark Fees		75,248			98,516
Other		134,534			36,374
TOTAL REVENUE		2,370,798			3,633,233
OPERATING EXPENSES
Room		826,312			1,027,874
Food and Beverage		63,246			47,308
Telecommunications		895			395
General and Administrative		917,761			1,502,906
Sales and Marketing		222,574			274,219
Repairs and Maintenance		175,413			202,332
Hospitality		94,707			270,962
Utilities		178,263			193,240
Depreciation		426,710			494,679
Real Estate and Personal Property Taxes, Insurance and Ground Rent		210,076			185,450
Sales and Occupancy Tax		766,000			-
Other		5,408			8,873
TOTAL OPERATING EXPENSES		3,887,365			4,208,238
OPERATING LOSS		(1,516,567	)		(575,005	)
Interest Income		64,352			3,527
TOTAL OTHER INCOME		64,352			3,527
Interest on Mortgage Notes Payable		108,345			113,165
Interest on Notes Payable to Banks		103			-
Interest on Other Notes Payable		59,579			75,747
TOTAL INTEREST EXPENSE		168,027			188,912
CONSOLIDATED NET LOSS	$	(1,620,242	)	$	(760,390	)
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST	$	(813,451	)	$	44,432
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS	$	(806,791	)	$	(804,822	)
NET LOSS PER SHARE TOTAL – BASIC & DILUTED	$	(0.18	)	$	(0.08	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC & DILUTED		9,247,007			9,337,879

See accompanying notes to unaudited condensed consolidated financial statements

3

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	FOR THE THREE MONTHS ENDED
	JULY 31,
	2020			2019
REVENUE
Room	$	846,289		$	1,470,607
Food and Beverage		17,801			14,547
Management and Trademark Fees		32,050			35,004
Other		28,580			20,057
TOTAL REVENUE		924,720			1,540,215
OPERATING EXPENSES
Room		356,696			486,865
Food and Beverage		30,878			23,306
Telecommunications		895			395
General and Administrative		340,287			654,155
Sales and Marketing		112,140			146,240
Repairs and Maintenance		86,606			102,529
Hospitality		25,838			131,262
Utilities		96,857			101,119
Depreciation		212,401			252,924
Real Estate and Personal Property Taxes, Insurance and Ground Rent		126,563			50,763
Sales and Occupancy Tax		766,000			-
Other		3,306			3,998
TOTAL OPERATING EXPENSES		2,158,467			1,953,556
OPERATING LOSS		(1,233,747	)		(413,341	)
Interest Income		46,596			713
TOTAL OTHER INCOME		46,596			713
Interest on Mortgage Notes Payable		72,338			58,609
Interest on Notes Payable to Banks		-			-
Interest on Other Notes Payable		7,896			7,401
TOTAL INTEREST EXPENSE		80,234			66,010
CONSOLIDATED NET LOSS	$	(1,267,385	)	$	(478,638	)
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST	$	(602,466	)	$	(14,631	)
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS	$	(664,919	)	$	(464,007	)
NET LOSS PER SHARE TOTAL – BASIC & DILUTED	$	(0.14	)	$	(0.05	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC & DILUTED		9,203,817			9,334,180

See accompanying notes to unaudited condensed consolidated financial statements

4

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JULY 31, 2020

	Shares of Beneficial Interest						Treasury Stock					Trust Shareholders’			Non-Controlling			Total
	Shares			Amount			Shares		Amount			Equity			Interest			Equity
Balance, January 31, 2020		9,273,299			21,837,048			9,334,916		(13,689,533	)		8,147,515			(2,229,705	)		5,917,810
Net Loss		-			(141,872	)		-		-			(141,872	)		(210,985	)		(352,857	)
Purchase of Treasury Stock		(17,074	)		-			17,074		(20,772	)		(20,772	)		-			(20,772	)
Shares of Beneficial Interest Issued for Services Rendered		18,000			8,100			-		-			8,100			-			8,100
Sales of Ownership Interests in Subsidiary, net		-			-			-		-			-			10,000			10,000
Distribution to Non-Controlling Interests		-			-			-		-			-			(105,347	)		(105,347	)
Reallocation of Non-Controlling Interests and Other		-			10,494			-		-			10,494			(10,494	)		-
Balance, April 30, 2020		9,274,225		$	21,713,770			9,351,990	$	(13,710,305	)	$	8,003,465		$	(2,546,531	)	$	5,456,934
Net Loss		-			(664,919	)		-		-			(664,919	)		(602,466	)		(1,267,385	)
Dividends		-			(95,924	)		-		-			(95,924	)		-			(95,924	)
Purchase of Treasury Stock		(181,815	)		-			181,815		(186,567	)		(186,567	)		-			(186,567	)
Shares of Beneficial Interest Issued for Services Rendered		-			6,300			-		-			6,300			-			6,300
Balance, July 31, 2020		9,092,410		$	20,959,227			9,533,805	$	(13,896,872	)	$	7,062,355		$	(3,148,997	)	$	3,913,358

FOR THE SIX MONTHS ENDED JULY 31, 2019

	Shares of Beneficial Interest						Treasury Stock					Trust Shareholders’			Non-Controlling			Total
	Shares			Amount			Shares		Amount			Equity			Interest			Equity
Balance, January 31, 2019		9,360,292			23,738,260			9,229,923		(13,517,833	)		10,220,427			(1,471,912	)		8,748,515
Net Income (Loss)		-			(328,854	)		-		-			(328,854	)		59,024			(269,830	)
Purchase of Treasury Stock		(32,732	)		-			32,732		(58,096	)		(58,096	)		-			(58,096	)
Shares of Beneficial Interest Issued for Services Rendered		18,000			8,100			-		-			8,100			-			8,100
Distribution to Non-Controlling Interests		-			-			-		-			-			(139,679	)		(139,679	)
Balance, April 30, 2019		9,345,560		$	23,417,506			9,262,655	$	(13,575,929	)	$	9,841,577		$	(1,552,567	)	$	8,289,010
Net Income (Loss)		-			(475,968	)		-		-			(475,968	)		(14,592	)		(490,560	)
Dividends		-			(95,909	)		-		-			(95,909	)		-			(95,909	)
Purchase of Treasury Stock		(32,410	)		-			32,410		(51,385	)		(51,385	)		-			(51,385	)
Shares of Beneficial Interest Issued for Services Rendered		-			8,100			-		-			8,100			-			8,100
Distribution to Non-Controlling Interests		-			-			-		-			-			(60,554	)		(60,554	)
Balance, July 31, 2019		9,313,150		$	22,853,729			9,289,026	$	(13,627,314	)	$	9,226,415		$	(1,627,713	)	$	7,598,702

See accompanying notes to unaudited condensed consolidated financial statements

5

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	FOR THE SIX MONTHS ENDED
	JULY 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated Net Loss	$	(1,620,242	)	$	(760,390	)
Adjustments to Reconcile Consolidated Net Loss to Net Cash Provided By (Used In) Operating Activities:
Stock-Based Compensation		14,400			16,200
Depreciation		426,710			494,679
Changes in Assets and Liabilities:
Accounts Receivable		524,024			(4,749	)
Prepaid Expenses and Other Assets		(138,528	)		20,707
Operating Lease		(11,276	)		-
Finance Lease		28,512			-
Accounts Payable and Accrued Expenses		383,854			(644,356	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(392,546	)		410,803
CASH FLOWS FROM INVESTING ACTIVITIES
Improvements and Additions to Hotel Properties		-			(190,530	)
Payment on Investments in Unigen		(400,000	)		-
Redemption (purchase) of Marketable Securities		(60	)		410,247
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(400,060	)		219,717
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Mortgage Notes Payable		(81,454	)		(57,795	)
Borrowings on Mortgage Notes Payable		-			-
Payments on Notes Payable to Banks, net of financing costs		(17,100	)		(156,000	)
Borrowings on Notes Payable to Banks, net of financing costs		-			146,700
Lendings on Notes Receivable - Related Party		(50,000	)		(50,000	)
Collections on Notes Receivable - Related Party		50,000			450,000
Payments on Notes Payable - Related Party		(161,440	)		(158,773	)
Payments on Other Notes Payable		(132,133	)		(543,948	)
Borrowings on Other Notes Payable		513,224			11,000
Payment of Dividends		(95,924	)		(95,909	)
Proceeds from Sale of Non-Controlling Ownership Interest in Subsidiary, net		10,000			-
Distributions to Non-Controlling Interest Holders		(105,347	)		(200,233	)
Repurchase of Treasury Stock		(207,339	)		(109,481	)
NET CASH USED IN FINANCING ACTIVITIES		(277,513	)		(764,439	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,070,119	)		(133,919	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,200,528			749,075
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	130,409		$	615,156

See accompanying notes to unaudited condensed consolidated financial statements

6

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2020 AND JANUARY 31, 2020

AND FOR THE THREE AND SIX MONTHS ENDED JULY 31, 2020 AND 2019

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

As of July 31, 2020, InnSuites Hospitality Trust (the “Trust”, “IHT”, “we”, “us” or “our”) is a publicly traded unincorporated Ohio real estate investment trust (REIT) with two hotels IHT owns and three hotels IHT manages. The Trust and its shareholders directly in and through a Partnership, own interests in two hotels with an aggregate of 270 hotel suites in Arizona and New Mexico, both (the “Hotels”) operated under the federally trademarked name “InnSuites Hotels” or “InnSuites” as well as operating under the brand name “Best Western”. The Trust and its shareholders hold a $1 million 6% convertible debenture in UniGen Power Inc., (“UPI”), and hold warrants to make further UPI Investments in the future.

Hotel Operations:

Our Tucson, Arizona Hotel and our Hotel located in Albuquerque, New Mexico are limited service hotels. Both hotels offer swimming pools, fitness centers, business centers, and complimentary breakfast. In addition the Hotels offer social areas and modest conference facilities.

The Trust is the sole general partner of RRF Limited Partnership, a Delaware limited partnership (the “Partnership”), and owned a 75.89% interest in the Partnership as of July 31, 2020 and January 31, 2020, respectively. The Trust’s weighted average ownership for the six months ended July 31, 2020 and 2019 was 75.89%. As of July 31, 2020, the Partnership owned a 51.01% interest in an InnSuites® hotel located in Tucson, Arizona. The Trust owns a direct 20.17% interest in an InnSuites® hotel located in Albuquerque, New Mexico.

InnSuites Hotels Inc.(“IHI”), a subsidiary, manages the Hotels’ daily operations under 3 management agreements. The Trust also provides the use of the “InnSuites” trademark to the Hotels through wholly-owned IHI. All expenses and reimbursements between the Trust, IHI and the Partnership have been eliminated in consolidation.

The Trust classified the Hotels as operating assets, but these assets are available for sale. At this time, the Trust is unable to predict when, and if, any of these will be sold. Neither the Tucson Hotel nor the Albuquerque Hotel is currently listed but the Trust is willing to consider offers for the Hotel. Each of the Hotels is being marketed at a price that management believes is reasonable in relation to its current fair value.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

These unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles in conformity with accounting principles generally accepted in the United States of America (“GAAP”), and include all assets, liabilities, revenues and expenses of the Trust and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated. Certain items have been reclassified to conform to the current fiscal year presentation. The Trust exercises unilateral control over the Partnership and the entities listed below. Therefore, the unaudited condensed financial statements of the Partnership and the entities listed below are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

	IHT OWNERSHIP %
ENTITY	DIRECT			INDIRECT (i)
Albuquerque Suite Hospitality, LLC		20.17	%		-
Tucson Hospitality Properties, LLLP		-			51.01	%
RRF Limited Partnership		75.89	%		-
InnSuites Hotels Inc.		100.00	%		-

(i) Indirect ownership is through the Partnership

7

PARTNERSHIP AGREEMENT

The Partnership Agreement of the Partnership provides for the issuance of two classes of Limited Partnership units, Class A and Class B. Class A and Class B Partnership units are identical in all respects, except that each Class A Partnership unit is convertible into one newly-issued Share of Beneficial Interest of the Trust at any time at the option of the limited partner holding the units. The Class B Partnership units may only become convertible, each into one newly issued Share of Beneficial Interest of the Trust, with the approval of the Board of Trustees, in its sole discretion. On July 31, 2020 and January 31, 2020, 211,708 Class A Partnership units were issued and outstanding, representing 1.60% of the total Partnership units, respectively. Additionally, as of July 31, 2020 and January 31, 2020, 2,974,038 Class B Partnership units were outstanding to and owned by James Wirth, the Trust’s Chairman and Chief Executive Officer, and Mr. Wirth’s affiliates. If all the Class A and B Partnership units were converted on July 31, 2020 and January 31, 2020, the limited partners in the Partnership would receive 3,185,746 Shares of Beneficial Interest of the Trust. As of July 31, 2020, and January 31, 2020, the Trust owns 10,025,771 general partner units in the Partnership, representing 75.89% and 75.89% of the total Partnership units, respectively.

LIQUIDITY

The Trust’s principal source of cash to meet its cash requirements, including distributions to its shareholders, is our share of the Partnership quarterly distributions coming from the Tucson Hotel as well as cash flow; quarterly distributions and cash flow from the Albuquerque, New Mexico property, management fees charged to Trust and Affiliate hotels, repayments of intercompany loans for the Tucson and Albuquerque Hotels and more recently, sales and/or refinance of certain hotels. The Partnership’s principal source of cash flow is quarterly distributions from the Tucson, Arizona property. The Trust’s liquidity, including our ability to make distributions to its shareholders, will depend upon the ability of the Trust and the Partnership’s ability to generate sufficient cash flow from hotel operations and to service debt, as well as to generate funds from repayment of loans and sale of assets. The Covid-19 Virus (the “Virus”) has disrupted the quarterly distributions from both the Albuquerque and Tucson hotels. Another principal source of cash is derived from the management fees of the Albuquerque, Tucson, and Tempe Hotels.

At a future date, the Trust may receive cash from the operations and/or full or partial sale of its Unigen diversification investment.

As of July 31, 2020, the Trust had a related party Demand/Revolving Line of Credit/Promissory Note with an amount receivable of approximately $0. The Demand/Revolving Line of Credit/Promissory Note accrues interest at 7.0% per annum and requires interest only payments. The Demand/Revolving Line of Credit/Promissory Note has a maximum borrowing capacity to $1,000,000, which is available through December 31, 2021, and renews annually. As of July 31, 2020, the outstanding net balance receivable on the Demand/Revolving Line of Credit/Promissory Note was $0.

As of July 31, 2020, the Trust had Advance to Affiliate credit facilities with an aggregate maximum borrowing capacity of $1,000,000, which is available through December 31, 2021, and renews annually. As of July 31, 2020, the Trust had an amount receivable of the Advances to Affiliate credit facility of approximately $1,000,000.

As of July 31, 2020, the Trust had a Revolving line of Credit of $150,000 with the Republic Bank of Arizona. The line had a zero balance as of July 31, 2020.

The Trust is owed approximately $3.6 million intercompany loan from the Tucson Hotel. The Trust plans within the next year to prepare to be in a position to seek refinancing the Tucson Hotel property, which would facilitate repayment of up to $3.5 million of the Tucson Hotel loan. We anticipate this refinance may be completed in the third quarter of Fiscal 2022.

8

With approximately $130,000 of cash and short term investments, as of July 31, 2020, the availability of a $1,000,000 related party Demand/Revolving Line of Credit/Promissory Note, the availability of the combined $1,000,000 Advance to Affiliate credit facilities, and the $150,000 Revolving Line of Credit with Republic Bank, the Trust believes that it has and will have enough cash on hand to meet all of the financial obligations as they become due for twelve months from the date of filing this 10-Q. In addition, management is analyzing other strategic options available to the Trust, including the sale or refinance of one or both Hotel properties. However, such transactions may not be available on terms that are favorable to the Trust, or at all.

There can be no assurance that the Trust will be successful selling properties, refinancing debt or raising additional or replacement funds, or that these funds may be available on terms that are favorable to it. If the Trust is unable to raise additional or replacement funds, it may be required to sell certain of our assets to meet liquidity needs, which may not be on terms that are favorable.

TEMPE HOTEL SUBSEQUENT EVENT 

Subsequent to year end, an affiliate of the Trust sold the Tempe Hotel on December 18, 2020. At that time, the Trust received in the Fourth Fiscal quarter the full repayment of the approximately $1 million intercompany loan to Tempe. In addition, Rare Earth Financial (“REF”), an Affiliated Member of the Tempe Hotel at that time repaid approximately $800,000 intercompany loan to the Trust, in the Fourth Fiscal quarter of 2020.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the Trust in accordance with Generally Accepted Accounting Principles (“GAAP”), for interim financial information, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statement presentation. However, the Trust believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the six months ended July 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended January 31, 2020.

The Trust has evaluated subsequent events through the date of the filing of its Form 10-Q with the Securities and Exchange Commission. Other than those events disclosed, the Trust is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Trust’s financial statements.

As sole general partner of the Partnership, the Trust exercises unilateral control over the Partnership, and the Trust owns all of the issued and outstanding classes of shares of InnSuites Hotels Inc. Therefore, the financial statements of the Partnership and InnSuites Hotels Inc. are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

Under Accounting Standards Codification (“ASC”) Topic 810-10-25, Albuquerque Suite Hospitality, LLC has been determined to be a variable interest entity with the Trust as the primary beneficiary (see Note 4 – “Variable Interest Entity”). Therefore, the financial statements of Albuquerque Suite Hospitality, LLC, are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

The financial statements of the Partnership and Tucson Hospitality Properties, LLLP are consolidated with the Partnership and the Trust, and all significant intercompany transactions and balances have been eliminated.

SEASONALITY OF THE HOTEL BUSINESS

The Hotels’ operations historically have been somewhat seasonal. The Tucson Arizona Hotel experiences the highest occupancy in the first fiscal quarter (the winter season) and, to a lesser extent, the fourth fiscal quarter. The second fiscal quarter tends to be the lowest occupancy period at this Arizona Hotel. This seasonality pattern can be expected to cause fluctuations in the Trust’s quarterly revenues. The Hotel located in Albuquerque, New Mexico historically experience their most profitable periods during the second and third fiscal quarters (the summer season), providing some balance to the general seasonality of the Trust’s hotel business.

The seasonal nature of the Trust’s business increases its vulnerability to risks such as travel disruptions, labor force shortages and cash flow issues. Further, if an adverse event such as an actual or threatened virus pandemic, terrorist attack, international conflict, data breach, regional economic downturn or poor weather should occur at either of its two hotels, the adverse impact to the Trust’s revenues and profit could be significant.

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RECENTLY ISSUED ACCOUNTING GUIDANCE

The Trust adopted ASU No. 2016-02 as of February 1, 2019, using the modified retrospective approach wherein entities were allowed to initially apply the new leases standard at adoption date which had no effect to the opening balance of retained earnings in the period of adoption. Accordingly, all periods prior to February 1, 2019 were presented in accordance with the previous ASC Topic 840, Leases, and no retrospective adjustments were made to the comparative periods presented.

The Trust elected the package of practical expedients permitted under the new standard which, among other things, allowed the Trust to not reassess the lease classification, the lease identification, and the initial direct costs for any existing leases. Further, as permitted by the standard, the Trust made an accounting policy election not to record ROU assets or lease liabilities for leases with a term of 12 months or less. Instead, consistent with legacy accounting guidance, the Trust will recognize payments for such leases in the condensed consolidated statement of operations on a straight-line basis over the lease term. With adoption on February 1, 2019, this standard resulted in the recognition of additional assets of $2,821,410 and liabilities of $2,913,568 upon adoption on its accompanying condensed consolidated balance sheet. The new standard did not have a material impact on the Trust’s results of operations or cash flows.

In June 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this ASU became effective for us beginning February 1, 2019, and early adoption is permitted. The Trust has adopted this ASU which did not have a material effect on the unaudited condensed consolidated financial statements.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Trust’s operations are affected by numerous factors, including the economy, virus/pandemic, competition in the hotel industry and the effect of the economy on the travel and hospitality industries. The Trust cannot predict if any of the above items will have a significant impact in the future, nor can it predict what impact, if any, the occurrence of these or other events might have on the Trust’s operations and cash flows. Significant estimates and assumptions made by management include, but are not limited to, the estimated useful lives of long-lived assets and recoverability of long-lived assets and the fair values of the long-lived assets.

PROPERTY, EQUIPMENT, AND HOTEL PROPERTIES

Furniture, fixtures, building and improvements and hotel properties are stated at cost, except for land, and depreciated using the straight-line method over estimated lives ranging up to 40 years for buildings and improvements, and 3 to 10 years for furniture, fixtures and equipment.

Land is an indefinite-lived asset. The Trust tests its land for impairment annually, or whenever events or changes in circumstances indicates an impairment may have occurred, by comparing its carrying value to its implied fair value.

For tax purposes the Trust may take advantage of accelerated depreciation methods (MACRS) for new capital additions and improvements to its Hotels.

Management applies guidance ASC 360-10-35, to determine when it is required to test an asset for recoverability of its carrying value and whether, or not, an impairment exists. Under ASC 360-10-35, the Trust is required to test a long-lived asset for impairment when there is an indicator of impairment. Impairment indicators may include, but are not limited to, a drop in the performance of a long-lived asset, a decline in the hospitality industry or a decline in the economy. If an indicator of potential impairment is present, then an assessment is performed of whether the carrying amount of an asset exceeds its estimated undiscounted future cash flows over its estimated remaining life.

If the estimated undiscounted future cash flows over the asset’s estimated remaining life are greater than the asset’s carrying value, no impairment is recognized; however, if the carrying value of the asset exceeds the estimated undiscounted future cash flows, then the Trust would recognize an impairment expense to the extent the asset’s carrying value exceeds its fair value, if any. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are analyzed on a property-specific basis independent of the cash flows of other groups of assets. Evaluation of future cash flows is based on historical experience and other factors, including certain economic conditions, and committed future bookings.

CASH AND CASH EQUIVALENTS

The Trust considers all highly liquid short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. The Trust believes it places its cash and cash equivalents only with high credit quality financial institutions, although these balances may periodically exceed federally insured limits.

SHORT-TERM INVESTMENTS – AVAILABLE FOR SALE SECURITIES

The Trust currently owns a liquid investment account with Charles Schwab. The Trust believes it places its investments only with high credit quality financial institutions.

REVENUE RECOGNITION

Hotel and Operations

ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers” is effective for reporting periods beginning after December 15, 2017. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations.

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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. Revenues are recorded when rooms are occupied and when food and beverage sales are delivered. Management and trademark fees from non-affiliated hotels include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels and the one hotel owned by affiliates of Mr. Wirth.

Each room night consumed by a guest with a cancellable 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 room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Trust has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Trust recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Trust uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.

In evaluating its performance obligation, the Trust bundles the obligation to provide the guest the room itself with other obligations (such as free Wi-Fi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Trust’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Trust has no performance obligations once a guest’s stay is complete.

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

ACCOUNTS RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are derived from guest stays and other reservations at the Hotels. Accounts receivable are carried at original amounts billed less an estimate made for doubtful accounts based on a review of outstanding amounts on a quarterly basis. Management generally records an allowance for doubtful accounts for 50% of balances over 90 days due and 100% of balances over 120 days due. Accounts receivable are written off when collection efforts have been exhausted and they are deemed uncollectible. Recoveries, if any, of receivables previously written off are recorded when received. The Trust does not charge interest on accounts receivable balances and these receivables are unsecured. The following is a reconciliation of the allowance for doubtful accounts for the fiscal period ended July 31, 2020 and the fiscal year ended January 31, 2020.

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Fiscal Year	Balance at the Beginning of Period			Discontinued Operations Adjustment		Charged to Expense			Deductions		Balance at the End of Period
July 31, 2020	$	(14,789	)	$	-	$	(6,933	)	$	-	$	(21,722	)
January 31, 2020	$	(5,943	)	$	-	$	(13,223	)	$	4,377	$	(14,789	)

INCOME TAX RECEIVABLE

The Trust amended its corporate tax returns for the previous year ended January 31, 2019. Such amendments resulted in a refund of approximately $294,000, which the Trust expects to receive by July 31, 2021.

LEASE ACCOUNTING

The Trust determines, at the inception of a contract, if the arrangement is a lease and whether it meets the classification criteria for a finance or operating lease. ROU assets represent the Trust’s right to use an underlying asset during the lease term and lease liabilities represent the Trust’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also include any advance lease payments and exclude lease incentives. As most of the Trust’s operating leases do not provide an implicit rate, the Trust uses its incremental borrowing rate based on information available at commencement date in determining the present value of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term (see Note 14).

TRUSTEE STOCK-BASED COMPENSATION

The Trust has an employee equity incentive plan, which is described more fully in Note 15 - “Share-Based Payments.” The three independent members of the Board of Trustees earn 6,000 IHT Shares per year. The Trust has paid the annual fees due to its Trustees by issuing Shares of Beneficial Interest out of its authorized but unissued Shares. Upon issuance, the Trust recognizes the shares as outstanding. The Trust recognizes expense related to the issuance based on the fair value of the shares upon the date of the restricted share grant and amortizes the expense equally over the period during which the shares vest to the Trustees.

During the six months ended July 31, 2020, the Trust granted restricted stock awards of 18,000 Shares to three independent members of the Board of Trustees, resulting in stock-based compensation of $14,400. The shares vest over one year, through the end of fiscal year ended January 31, 2021 monthly at a rate of approximately 500 shares for each outside Trustee or a total of 1,500 per month for three independent Trustees.

TREASURY STOCK

Treasury stock is carried at cost, including any brokerage commissions paid to repurchase the shares. Any shares issued from treasury stock are removed at cost, with the difference between cost and fair value at the time of issuance recorded against Shares of Beneficial Interest.

NET LOSS PER SHARE

Basic and diluted net loss per Share of Beneficial Interest is computed based on the weighted-average number of Shares of Beneficial Interest and potentially dilutive securities outstanding during the period. Dilutive securities are limited to the Class A and Class B units of the Partnership, which are convertible into 3,185,746 Shares of the Beneficial Interest, as discussed in Note 1.

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For the six months ended July 31, 2020 and 2019, there were Class A and Class B Partnership units outstanding, which are convertible into Shares of Beneficial Interest of the Trust. Assuming conversion at the beginning of each period, the aggregate weighted-average of these Shares of Beneficial Interest would have been 3,185,746 and 3,185,746 in addition to the basic shares outstanding for the six months ended July 31, 2020 and 2019, respectively. These Shares of Beneficial Interest issuable upon conversion of the Class A and Class B Partnership units were anti-dilutive during the six months ended July 31, 2020 and 2019 and are excluded in the calculation of diluted earnings per share for those periods.

ADVERTISING COSTS

Amounts incurred for advertising costs are expensed as incurred. Advertising expense for operations totaled approximately $56,000 and $42,000 for the three months ended July 31, 2020 and 2019 respectively, and $116,000 and $84,000 for the six months ended July 31, 2020 and 2019, respectively.

CONCENTRATION OF CREDIT RISK

Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Trust to a concentration of credit risk consist primarily of cash and cash equivalents. Management’s assessment of the Trust’s credit risk for cash and cash equivalents is low as cash and cash equivalents are held in financial institutions believed to be credit worthy.

The Trust limits its exposure to credit loss by placing its cash with major financial institutions and invests only in short-term obligations.

While the Trust is exposed to credit losses due to the non-performance of its counterparties, the Trust considers the risk of this remote.

The Trust estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For disclosure purposes, fair value is determined by using available market information and appropriate valuation methodologies. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. The fair value framework specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The fair value hierarchy levels are as follows:

● Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

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● Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and / or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are level 2 valuation techniques.

● Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect a company’s own judgments about the assumptions that market participants would use in pricing an asset or liability.

The Trust has assets that are carried at fair value on a recurring basis, including warrants in a 3^rd party private company recorded in investments on the unaudited consolidated balance sheet.

Due to their short maturities, the carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value. The fair value of mortgage notes payable, notes payable to banks and notes and advances payable to related parties is estimated by using the current rates which would be available for similar loans having the same remaining maturities and are based on level 3 inputs.

INVESTMENT IN UNIGEN POWER, INC.

On December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UPI” or “UniGen”).

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%. The Debentures are convertible into Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share. The Loan is structured into two (2) payments of $600,000 and $400,000. The first payment of $600,000 was made by the Trust at closing on December 16, 2020 and the second payment of $400,000 was made on February 3, 2020.

UniGen issued the Trust common stock purchase warrants (the “Debenture Warrants”) to purchase up to 1,000,000 shares of Class A Common Stock (600,000 issued on January 31, 2020, and 400,000 issued on February 3, 2020). 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 200,000 shares of Class A Common Stock (120,000 issued at January 31, 2020, and 80,000 issued on February 3, 2020). The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.

On the Trust’s balance sheet, the investment of the $1,000,000 made in the current fiscal year consists of approximately $424,000 in note receivables and approximately $576,000 as the fair value of the warrant issued with the Trust’s investment in UniGen. The value of the premium related to the fair value of the warrants will accrete over the life of the debentures.

The value of the warrants was based on Black-Scholes pricing model based on the following inputs:

Debenture Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	1.00
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

Additional Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	2.25
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

UNIGEN SUBSEQUENT EVENT

UniGen has also agreed to allow IHT to fund a $500,000 line of credit at the option of IHT convertible into 500,000 shares of UniGen stock at $1 per share. And upon full subscription of the UniGen $2 million subscription grant IHT an additional 300,000 warrants at $2.25 per share. If all notes are converted and all warrants exercised, IHT would hold 3 million UniGen shares out of a total of approximately 12 million UniGen shares resulting in IHT owning approximately 25% of UniGen. Subsequent to July 31, 2020, no activity has occurred with this line of credit and thus no draws have been taken. 

3. SALE OF OWNERSHIP INTERESTS IN SUBSIDIARIES

The Trust has sold non-controlling interests in certain subsidiaries, including Albuquerque Suite Hospitality, LLC (the “Albuquerque entity”) and Tucson Hospitality Properties, LLLP (the “Tucson entity, which sales are described in detail in our Annual Report on Form 10-K filed on August 14, 2020 with the Securities and Exchange Commissions. Generally, interests have sold for $10,000 per unit with a two-unit minimum subscription. The Trust maintains at least 50.1% of the units in one of the entities and intends to maintain this minimum ownership percentage. Generally, the units in the each of the entities are allocated to three classes with differing cumulative discretionary priority distribution rights through a certain time period. Class A units are owned by unrelated third parties and have priority for distributions. Class B units are owned by the Trust and have second priority for distributions. Class C units are owned by Rare Earth or other affiliates of Mr. Wirth and have the lowest priority for distributions. Priority distributions of $700 per unit per year are cumulative until a certain date; however, after that date, generally Class A unit holders continue to hold a preference on distributions over Class B and Class C unit holders. The Trust does not accrue for these distributions as the preference periods have expired.

On February 15, 2017, the Trust and Partnership entered into a restructuring agreement with Rare Earth Financial, LLC (“REF”) to allow for the sale of non-controlling partnership units in Albuquerque Suite Hospitality LLC (“Albuquerque”) for $10,000 per unit, which operates the Best Western InnSuites Albuquerque Hotel and Suites Airport hotel property, a 112 unit hotel in Albuquerque, New Mexico (the “Property”). REF and IHT restructured the Albuquerque Membership Interest by creating 250 additional Class A membership interests from General Member majority-owned to accredited investor member-owned. In the event of sale of 250 Class A Interests, total interests outstanding will change from 550 to 600 with Class A, Class B and Class C Limited Liability Company Interests (referred to collectively as “Interests”) restructured with IHT selling approximately 200 Class B Interests to accredited investors as Class A Interest. REF, as a General Partner of Albuquerque, will coordinate the offering and sale of Class A Interests to qualified third parties. REF and other REF Affiliates may purchase Interests under the offering. This restructuring is part of the Trust’s Equity Enhancement Plan to comply with Section 1003(a)(iii) of the NYSE American Company Guide.

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4. VARIABLE INTEREST ENTITIES

Management evaluates the Trust’s explicit and implicit variable interests to determine if they have any interests in variable interest entities (“VIEs”). Variable interests are contractual, ownership, or other pecuniary interests in an entity whose value changes with changes in the fair value of the entity’s net assets, exclusive of variable interests. Explicit variable interests are those which directly absorb the variability of a VIE and can include contractual interests such as loans or guarantees as well as equity investments. An implicit variable interest acts the same as an explicit variable interest except it involves the absorbing of variability indirectly, such as through related party arrangements or implicit guarantees. The analysis includes consideration of the design of the entity, its organizational structure, including decision making ability over the activities that most significantly impact the VIE’s economic performance. GAAP requires a reporting entity to consolidate a VIE when the reporting entity has a variable interest, or combination of variable interest, that provides it with a controlling financial interest in the VIE. The entity that consolidates a VIE is referred to as the primary beneficiary of that VIE.

The Partnership has determined that the Albuquerque entity is a variable interest entity with the Partnership as the primary beneficiary with the ability to exercise control, as determined under the guidance of ASC Topic 810-10-25. In its determination, management considered the following qualitative and quantitative factors:

a) The Partnership, Trust, and their related parties, which share common ownership and management, have guaranteed material financial obligations of the Albuquerque hotel.

b) The Partnership, Trust and their related parties have maintained, as a group, a controlling ownership interest in the Albuquerque hotel, with the largest ownership belonging to the Trust.

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c) The Partnership, Trust and their related parties have maintained control over the decisions which most impact the financial performance of the Albuquerque hotel, including providing the personnel to operate the property daily.

During the six months ended July 31, 2020 and the fiscal year ended January 31, 2020, neither the Trust nor the Partnership have provided any implicit or explicit financial support for which they were not previously contracted. Both the Partnership and the Trust provided mortgage loan guarantees which allow our properties to obtain new financing as needed.

5. PROPERTY, EQUIPMENT, AND HOTEL PROPERTIES

As of July 31, 2020 and January 31, 2020, hotel properties consisted of the following:

	July 31, 2020			January 31, 2020
Land	$	2,500,000		$	2,500,000
Building and improvements		10,515,156			10,495,465
Furniture, fixtures and equipment		4,047,444			4,021,890
Total hotel properties		17,062,600			17,017,355
Less accumulated depreciation		(8,569,683	)		(8,155,224	)
Hotel Properties in Service, net		8,492,918			8,862,131
Construction in progress		0			40,965
Hotel properties, net	$	8,492,918		$	8,903,096

As of July 31, 2020 and January 31, 2020, corporate property and equipment consisted of the following:

	July 31, 2020			January 31, 2020
Land	$	7,005		$	7,005
Building and improvements		75,662			75,662
Furniture, fixtures and equipment		166,121			160,987
Total property, plant and equipment		248,788			243,654
Less accumulated depreciation		(175,679	)		(163,427	)
Property, Plant and Equipment, net	$	73,109		$	80,227

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6. MORTGAGE NOTES PAYABLE

On July 31, 2020 and January 31, 2020, the Trust had a mortgage note payable outstanding with respect to the Tucson Hotel. The mortgage note payable has a scheduled maturity date in June 2042. Weighted average annual interest rates on mortgage notes payable as of July 31, 2020 and January 31, 2020 were 4.69%, respectively.

The mortgage note payable reflects a $5.0 million Business Loan Agreement (“Tucson Loan”) as a first mortgage credit facility with KS State Bank, entered into on June 29, 2017, to refinance the existing first mortgage credit facility with an approximate payoff balance of $3.045 million. The loan will allow Tucson Hospitality Properties, LLLP funds for prior and future hotel improvements. The Tucson Loan has a maturity date of June 19, 2042 and has an initial interest rate of 4.69% for the first five years and thereafter a variable rate equal to the US Treasury + 2.0% with a floor of 4.69% and no prepayment penalty. This credit facility is guaranteed by InnSuites Hospitality Trust, RRF Limited Partnership, Rare Earth Financial, LLC, James F. Wirth and Gail J. Wirth and the Wirth Family Trust dated July 14, 2016.

As of July 31, 2020, and January 31, 2020, the mortgage loan balance was approximately $4,648,000 and $4,709,000, respectively, net of a discount of approximately $5,000. The mortgage note payable is due in monthly installments of $28,493.

In addition, the Albuquerque hotel has a loan of approximately $1.4 million with a weighted average interest rate of 4.9%.

See Note 9 – “Minimum Debt Payments” for scheduled minimum payments on the mortgage notes payable.

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7. NOTES PAYABLE AND NOTES RECEIVABLE – RELATED PARTY

On December 1, 2014, the Trust entered a Demand/Revolving Line of Credit/Promissory Note with Rare Earth Financial, LLC, an entity which is wholly owned by Mr. Wirth and his family members. The Demand/Revolving Line of Credit/Promissory Note, as amended on June 19, 2017, bears interest at 7.0% per annum for both a payable and receivable, is interest only quarterly matures on August 24, 2021, and renews annually each calendar year. No prepayment penalty exists on the Demand/Revolving Line of Credit/Promissory Note. The balance fluctuates significantly through the period. The Demand/Revolving Line of Credit/Promissory Note has a net maximum borrowing/lending capacity of $1,000,000. As of July 31, 2020, and January 31, 2020, the Trust had an amount receivable of approximately $0. During the three months ended July 31, 2020 and 2019, the Trust accrued approximately $0 and $3,632, respectively, of interest income.

8. OTHER NOTES PAYABLE

As of July 31, 2020, the Trust had approximately $188,000 in promissory notes outstanding to unrelated third parties arising from the repurchase of 57,732 Class A Partnership units in privately negotiated transactions, the repurchase of 273,898 Shares of Beneficial Interest in privately negotiated transactions, and the repurchase of 1 Class A interest in Albuquerque Suite Hospitality, LLC in privately negotiated transactions. These promissory notes bear interest at 7% per year and are due in varying monthly payments through January 2023.

As of July 31, 2020, the Trust had a $200,000 unsecured note payable with an individual lender. The promissory note is payable on demand, or on June 30, 2021, whichever occurs first. The loan accrues interest at 4.0% and interest only payments shall be made monthly and are due on the first of the following month. The Trust may pay all of part of this note without any repayment penalties. The total principal amount of this loan is $200,000 as of July 31, 2020.

On June 20, 2016, the Trust and the Partnership together entered multiple unsecured loans totaling $270,000 with Guy C. Hayden III (“Hayden Loans”). As of July 1, 2019, these loans were consolidated and extended at 4.5% interest only, with similar terms to June 30, 2021. The Trust may pay all or part of this note without any repayment penalties. The total principal amount of the Hayden Loans is $270,000 as of July 31, 2020.

On March 20, 2017, the Trust and Partnership entered multiple, unsecured loans to Lisa Sweitzer Hayes (“Sweitzer Loans”), totaling $100,000. As of July 1, 2019, these loans were consolidated and extended at 4.0% interest only, with similar terms to June 30, 2021. The total principal amount of the Sweitzer Loans is $100,000 as of July 31, 2020.

As a result of the Covid-19 Virus Pandemic, and the subsequent Legislation passed within the CARES Act of 2020, the Trust applied for and received Small Business Administration (“SBA”) loans through the Paycheck Protection Program (“PPP”). Loans in the amount of $228,602, $187,685, and $86,700, for Tucson, Albuquerque, InnSuites Hospitality, respectively, were granted and received. The lender of all three of the aforementioned PPP Loans has confirmed that all three loans have met all of the requirements necessary to qualify and be eligible for full and complete forgiveness in early 2021, based upon the SBA criteria for PPP loan forgiveness, subject to and pending the forgiveness application. However, to date these loans have not yet been forgiven.

See Note 9 – “Minimum Debt Payments” for scheduled minimum payments on the debt liabilities.

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9. MINIMUM DEBT PAYMENTS

Scheduled minimum payments of debt, net of debt discounts, as of July 31, 2020 are approximately as follows in the respective fiscal years indicated:

FISCAL YEAR	MORTGAGES		OTHER NOTES PAYABLE		TOTAL
2021	$	81,204	$	686,028	$	767,232
2022		170,856		560,001		730,857
2023		176,852		15,265		192,117
2024		219,151				219,151
2025		192,828				192,828
2026		203,490				203,490
Thereafter		4,979,833				4,979,833
	$	6,024,214	$	1,261,294	$	7,285,508

10. DESCRIPTION OF BENEFICIAL INTERESTS

Holders of the Trust’s Shares of Beneficial Interest are entitled to receive dividends when and if declared by the Board of Trustees of the Trust out of funds legally available. The holders of Shares of Beneficial Interest, upon any liquidation, dissolution or winding-down of the Trust, are entitled to share ratably in any assets remaining after payment in full of all liabilities of the Trust. The Shares of Beneficial Interest possess ordinary voting rights, each share entitling the holder thereof to one vote. Holders of Shares of Beneficial Interest do not have cumulative voting rights in the election of Trustees and do not have preemptive rights.

On January 2, 2001, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 250,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. On September 10, 2002, August 18, 2005 and September 10, 2007, the Board of Trustees approved the purchase of up to 350,000 additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Additionally, on January 5, 2009, September 15, 2009 and January 31, 2010, the Board of Trustees approved the purchase of up to 300,000, 250,000 and 350,000, respectively, of additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the Trust’s equity compensation plans/programs. Additionally, on June 19, 2017, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 750,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the InnSuites Hospitality Trust 1997 Stock Incentive and Option Plan.

For the six months ended July 31, 2020 and 2019, the Trust repurchased 198,889 and 65,142 Shares of Beneficial Interest at an average price of $1.04 and $1.68 per share, respectively. The average price paid includes brokerage commissions. The Trust intends to continue repurchasing Shares of Beneficial Interest in compliance with applicable legal and NYSE AMERICAN requirements. The Trust remains authorized to repurchase an additional 746,060 Partnership units and/or Shares of Beneficial Interest pursuant to the publicly announced share repurchase program, which has no expiration date. Repurchased Shares of Beneficial Interest are accounted for as treasury stock in the Trust’s Consolidated Statements of Shareholders’ Equity.

11. RELATED PARTY TRANSACTIONS

As of July 31, 2020 and January 31, 2020, Mr. Wirth and his affiliates held 2,974,038 Class B Partnership units, which represented 22.51% of the total outstanding Partnership units, respectively. As of July 31, 2020 and January 31, 2020, Mr. Wirth and his affiliates held 5,876,683 and 5,881,683 Shares of Beneficial Interest in the Trust, respectively, which represented 64.63% and 62.93% respectively, of the total issued and outstanding Shares of Beneficial Interest.

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As of July 31, 2020 and January 31, 2020, the Trust owned 75.89% of the Partnership, respectively. As of July 31, 2020, the Partnership owned a 51.01% interest in the InnSuites® hotel located in Tucson. The Trust also owned a direct 20.17% interest in one InnSuites® hotel located in Albuquerque, New Mexico.

The Trust directly manages the Hotels through the Trust’s wholly-owned subsidiary, InnSuites Hotels Inc. Under the management agreements, InnSuites Hotels Inc. manages the daily operations of the two Hotels and the hotel owned by affiliates of Mr. Wirth. (This hotel, located in Tempe, Arizona, was sold December 18, 2020). Revenues and reimbursements among the Trust, InnSuites Hotels Inc. and the Partnership have been eliminated in consolidation. The management fees for the Hotels and the hotel owned by affiliates of Mr. Wirth are set at 5.0% of room revenue and a monthly accounting fee of $2,000 per hotel. These agreements have no expiration date and may be cancelled by either party with 90-days written notice or 30-days written notice in the event the property changes ownership. For the six months ended July 31, 2020, the Trust recognized approximately $75,000 of revenue.

The Trust employs an immediate family member of Mr. Wirth, Brian James Wirth, who provides technology support services to the Trust, receiving a $36,000 annual salary.

On December 22, 2015, the Trust provided Advances to Affiliate – Related Party in the amount of $500,000 to Tempe/Phoenix Airport Resort LLC. Mr. Wirth, individually and thru one of his affiliates owns approximately 42% Tempe/Phoenix Airport Resort LLC. The note was amended on June 17, 2017 to increase the amount to $1,000.000 and extend the due date. The note has a due date of December 31, 2021, renews annually, and accrues interest of 7.0%. During the six months ended July 31, 2020 and 2019, the Trust received $1,970 and $0 of interest income, respectively, from Tempe/Phoenix Airport Resort LLC, respectively. As of July 31, 2020, the Advances from Affiliate – Related Party balance was approximately $1,000,000 from Tempe/Phoenix Airport Resort LLC. (The Tempe hotel was sold, and the inter-company loan was repaid in full in December 2020).

On July 14, 2017, the Trust purchased 40,000 shares of IHT stock from Marc Berg for $80,000. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 45,975 units of RRF Limited Partnership from Brian Wirth for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 45,975 units of RRF Limited Partnership from Christopher Wirth for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 40,000 shares of IHT stock from Eric Wirth for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 45,975 units of RRF Limited Partnership from Pamela Barnhill (Wirth family member) for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 250,000 units of RRF Limited Partnership from James Wirth for $500,000. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On December 1, 2014, the Trust entered into a $1,000,000 net maximum Demand/Revolving Line of Credit/Promissory Note with Rare Earth Financial. The Demand/Revolving Line of Credit/Promissory Note bears interest at 7.0% per annum, is interest only quarterly and matures on June 30, 2021. No prepayment penalty exists on the Demand/Revolving Line of Credit/Promissory Note. The balance fluctuates significantly through the period with the highest payable balance being approximately $0 during the six months ended July 31, 2020. The Demand/Revolving Line of Credit/Promissory Note has a net maximum borrowing capacity of $1,000,000. Related party interest expense or income for the Demand/Revolving Line of Credit/Promissory Note for the six months ended July 31, 2020 was $0 of expense and approximately $0 of revenue.

On February 7, 2020, Rare Earth Financial provided an advance to the Trust in the amount of $25,000. As of July 31, 2020, the amount outstanding is $0. The advance has an annual interest rate of 7%. The interest expense for the second quarter of 2021 is negligible.

12. STATEMENTS OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES

The Trust paid $183,083 and $122,902 in cash for interest for the six months ended July 31, 2020 and 2019, respectively for operations. The amounts related to Notes Payables - IHT Shares of Beneficial Interest and Partnership Units repurchases amounted to $0 and $11,000, respectively, for the six months ended July 31, 2020 and 2019. No cash was paid for taxes for the six months ended July 31, 2020 and 2019.

13. COMMITMENTS AND CONTINGENCIES

Restricted Cash:

The Trust is obligated under a loan agreement relating to the Tucson Oracle property to deposit 4% of the individual hotel’s room revenue into an escrow account to be used for capital expenditures. The escrow funds applicable to the Tucson Oracle property for which a mortgage lender escrow exists is reported on the Trust’s Consolidated Balance Sheet as “Restricted Cash.” Since a $0 cash balance existed in Restricted Cash as of July 31, 2020 and January 31, 2020, Restricted Cash line was omitted on the Trust’s Consolidated Balance Sheet.

Membership Agreements:

InnSuites Hotels has entered into membership agreements with Best Western International, Inc. (“Best Western”) for both hotel properties. In exchange for use of the Best Western name, trademark and reservation system, all Hotels pay fees to Best Western based on reservations received through the use of the Best Western reservation system and the number of available suites at the Hotels. The agreements with Best Western have no specific expiration terms and may be cancelled by either party. Best Western requires that the hotels meet certain requirements for room quality, and the Hotels are subject to removal from its reservation system if these requirements are not met. The Hotels with third-party membership agreements received significant reservations through the Best Western reservation system. Under these arrangements, fees paid for membership fees and reservations were approximately $40,822 and $84,550 for the six months ended July 31, 2020 and 2019, respectively. These costs include fees for the Albuquerque and Tucson hotels in 2019. These fees are included in room operating expenses on the unaudited condensed consolidated statements of operations for Albuquerque and Tucson.

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The nature of the operations of the Hotels exposes them to risks of claims and litigation in the normal course of their business. Although the outcome of these matters cannot be determined and is covered by insurance, management does not expect that the ultimate resolution of these matters will have a material adverse effect on the unaudited condensed consolidated financial position, results of operations or liquidity of the Trust.

Litigation:

The Trust is involved from time to time in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Trust’s unaudited condensed consolidated financial position, results of operations or liquidity.

Indemnification:

The Trust has entered into indemnification agreements with all our executive officers and Trustees. The agreements provide for indemnification against all liabilities and expenses reasonably incurred by an officer or Trustee in connection with the defense or disposition of any suit or other proceeding, in which he or she may be involved or with which he or she may be threatened, while in office or thereafter, because of his or her position at the Trust. There is no indemnification for any matter as to which an officer or Trustee is adjudicated to have acted in bad faith, with willful misconduct or reckless disregard of his or her duties, with gross negligence, or not in good faith in the reasonable belief that his or her action was in the Trust’s best interests. These agreements require the Trust, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as our director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by us. The Trust may advance payments in connection with indemnification under the agreements. The level of indemnification is to the full extent of the net equity based on appraised and/or market value of the Trust. Historically, the Trust has not incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying consolidated balance sheets.

See Note 14 – Leases, for discussion on lease payment commitments.

14. LEASES

The Trust has operating leases and finance lease for its corporate offices in Phoenix, Arizona, and land leased in Albuquerque, New Mexico. The Trust’s lease terms include options to extend or terminate the leases and the Trust includes these options in the lease term when it is reasonably certain to exercise that option.

Operating Leases

On August 4, 2017, the Trust entered into a five-year office lease agreement with Northpoint Properties for a commercial office lease at 1730 E Northern Ave, Suite 122, Phoenix, Arizona 85020 commencing on September 1, 2017. Base monthly rent of $4,100 increases 6% on a yearly basis. No rent is due for October 2018 and October 2022 months. The Trust also agreed to pay electricity and applicable sales tax. The office lease agreement provides early termination with a 90-day notification with an early termination fee of $12,000, $8,000, $6,000, $4,000, and $2,000 for years 1 - 5 of the lease term.

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The Company’s Albuquerque Hotel is subject to non-cancelable ground lease. The Albuquerque Hotel non-cancelable ground lease was extended on January 14, 2014 and expires in 2058.

The following table presents the Company’s lease costs for the six months ended July 31, 2020:

	Six Months
	Ended
	31-Jul-20
Operating Lease Costs:
Operating lease cost*	$	120,000

* Short term lease costs were immaterial.

Supplemental cash flow information is as follows:

	Six Months
	Ended
	31-Jul-20
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(11,276	)
Lease Obligations obtained:
Operating leases, net	$	2,396,517
Long-term obligations	$	2,341,097

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2020
Operating leases		38
Weighted average discount rate
Operating leases		4.85	%

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The aggregate future lease payments for Operating Lease Liability as of July 31, 2020 are as follows:

For the Years Ending January 31,
Remaining in 2021	$	85,080
2022		172,177
2023		148,348
2024		112,116
2025		112,116
Thereafter		5,151,311
Total minimum lease payments	$	5,781,148
Less: amount representing interest		3,384,631
Total present value of minimum payments		2,396,517
Less: current portion of operating lease liability	$	55,420
Long term portion of operating lease liability		2,341,097

Finance Leases

The Company’s Tucson Oracle Hotel is subject to non-cancelable cable lease. The Tucson Oracle Hotel non-cancelable cable lease expires in 2023.

The following table presents the Company’s lease costs for the six months ended July 31, 2020:

	Six Months
	Ended
	31-Jul-20
Finance Lease Costs:
Amortization of lease obligations	$	13,874
Interest on lease obligations		2,451

Supplemental cash flow information is as follows:

	Six Months
	Ended
	31-Jul-20
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	28,512
Lease Obligations obtained:
Finance leases, net	$	93,408
Long-term obligations	$	66,216

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2020
Finance leases		38
Weighted average discount rate
Finance leases		4.85	%

The aggregate future lease payments for Finance Lease Liability as of July 31, 2020 are as follows:

For the Years Ending January 31,
Remaining in 2021	$	15,562
2022		31,123
2023		31,123
2024		23,343
Total minimum lease payments	$	101,151
Less: amount representing interest		7,743
Total present value of minimum payments		93,408
Less: current portion	$	27,192
Long term portion of finance lease liability		66,216

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15. SHARE-BASED PAYMENTS

The Trust compensates its three non-employee Trustees for their services through grants of restricted Shares. The aggregate grant date fair value of these Shares was $32,400. These restricted 18,000 shares, (6,000 each to the three Independent Trustees), vest in equal monthly amounts during fiscal year 2021.

During fiscal year 1999, the shareholders of the Trust adopted the 1997 Stock Incentive and Option Plan (the “Plan”). Pursuant to the Plan, the Compensation Committee may grant options to the Trustees, officers, other key employees, consultants, advisors, and similar employees of the Trust and certain of its subsidiaries and affiliates. The number of options that may be granted in a year is limited to 10% of the total Shares of Beneficial Interest and Partnership units in the Partnership (Class A and Class B) outstanding as of the first day of such year.

Generally, granted options expire 10 years from the date of grant, are exercisable during the optionee’s lifetime only by the recipient and are non-transferable. Unexercised options held by employees of the Trust generally terminate on the date the individual ceases to be an employee of the Trust.

There were no options granted during the three months ended July 31, 2020, and no options were outstanding as of that period end. The Plan currently has 1,000,000 options available to grant. See Note 17 for additional information on stock options. The Plan also permits the Trust to award stock appreciation rights, none of which, as of July 31, 2020, have been issued.

See Note 2 – “Summary of Significant Accounting Policies” for information related to grants of restricted shares under “Stock-Based Compensation.”

16. NOTES RECEIVEABLE

Sale of IBC Hospitality Technologies; IBC Hotels LLC (IBC)

On August 15, 2018, the Trust entered into a final sale agreement for its subsidiary IBC Hotels LLC (IBC) with an effective sale date as of August 1, 2018 to an unrelated third-party buyer (Buyer). The sale price was $3,000,000, to be paid to IHT as follows:

1.

$250,000 at closing, which was received in cash on August 14, 2018;

2.

A secured promissory note receivable in the principal amount of $2,750,000 with interest to be accrued at 3.75% per annum, recorded in the accompanying condensed balance sheet in operations. The note was amended after closing, so that interest shall accrue for the first 26 months (starting August 2018), thereafter for month 27 and 28 principal and interest payments of 50% ($25,632 per month), then the remaining amount to be amortized over 59 months (payments of $52,054 per month) with maturity in November 2025. Future estimated receipts from this note are shown in the table below.

FISCAL YEAR
2021		-
2022		550,000
2023		550,000
2024		550,000
Thereafter		275,500
	$	1,925,500

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As of January 31, 2020, the Trust evaluated the carrying value of the note of $2,750,00 for potential impairment.

After review, an impairment of $825,000, or 30%, was taken against the note. Factors for the impairment included, but were not limited to:

● Management’s evaluation of the current financial position of the Buyer, based on unaudited financial statements provided.

● A lack of substantial quantitative data, showing the impact of the recently executed digital advertising agreement between the Buyer and Google.

● Management’s best, conservative valuation of IBC’s assets, and their marketability, in the case of a default by the Buyer.

● The current and future impact of the COVID-19 pandemic, on the travel and hospitality industry, in which IBC’s reservation and booking technology operates.

As of July 31, 2020, management evaluated the carrying value of the note and the impairment taken to date and determined no further impairment is needed at this time.

The start date of the monthly payments was originally to commence in 2020 but was extended to November 2021 due to the Virus slowing down the economy in general, and the travel industry specifically. The Trust has evaluated the ongoing pandemic conditions and no impairment is deemed necessary as the travel industry is expected to fully recover by Q3 2021.

The note is secured by (1) pledge of the Buyer’s interest in IBC, and (2) a security interest in all assets of IBC provided IHT shall agree to subordinate such equity interest to commercially reasonable debt financing upon request.

If after effective date IBC closes an equity transaction with net proceeds to IBC in excess of $2,500,000, IBC/Buyer shall pay to IHT an amount equal to (a) 50% of the net proceeds received by IBC and (b) 50% of the sum of the unpaid balance of the note and accrued interest accrued but unpaid interest thereon, as the date of receipt of the net proceeds by IBC.

IHT agreed to provide continuing working capital support for a period of nine months in the amount of approximately $225,000 over a six-month period to IBC for transitional purposes. IHT has no managerial control nor does IHT have the ability to direct the operations or capital requirements of IBC as of August 1, 2018. IHT has no rights to any benefits or losses from IBC as of August 1, 2018. During the fiscal year ended January 31, 2019 IHT had provided $100,000 to IBC. During the fiscal year ended January 31, 2020, IHT provided $125,000. Furthermore, no support was provided in the second quarter ended July 31, 2020.

Default

If Buyer has not paid two or more payments on the note as scheduled, or if Buyer has not satisfied any other provisions in the note, IHT may give Buyer notice of default. If Buyer fails to cure the default within 30 days after notice (a) on or before February 5, 2021, then 75% of the issued and outstanding IBC interest shall be transferred to IHT, and (b) on or after February 5, 2021, then 51% of the issued and outstanding interest of the Company shall be transferred to IHT. Currently there has been no default due to the extension granted.

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17. STOCK OPTIONS

Effective February 5, 2015, the Board of Trustees of the Trust adopted the 2015 Equity Incentive Plan (“2015 Plan”), subject to shareholder approval, under which up to 1,600,000 Shares of Beneficial Interest of the Trust are authorized to be issued pursuant to grant of stock options, stock appreciation rights, restricted shares, restricted share units or other awards.

The Board of Trustees of the Trust has decided to terminate the 2015 Plan. Effective October 31, 2016, it has been determined that the Shareholders will not approve the 2015 Plan and the proposed grants have been rescinded. During the 2017 Annual Meeting of Shareholders, the IHT Shareholders approved the InnSuites Hospitality Trust 2017 Equity Incentive Plan (“2017 Plan”). Management has not granted any options under the 2017 Plan.

18. INCOME AND OCCUPANCY TAXES

The Trust is taxed as a C-Corporation. The Trust’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Trust has received various IRS and state tax jurisdiction notices which the Trust in the process of responding to in which management believes the notices are without merit and expect full remediation of all tax notices. The Trust and subsidiaries have deferred tax assets of $4.0 million which includes cumulative net operating loss carryforwards of $1.1 million and syndications of $2.9 million, and deferred tax liability associated with book/tax differences of $1.5 million as of July 31, 2020. We have evaluated the net deferred tax asset and determined that it is not more likely than not we will receive full benefit from the net operating loss carryforwards. Therefore, we have determined a valuation allowance of approximately $2.5 million.

Sales and occupancy tax expense was approximately $766,000 for the six months ended July 31, 2020. This represents a liability arising from an occupancy tax discrepancy generated from our Tucson hotel which arose when we were notified in July 2020, of potentially underreporting and/or under collecting occupancy tax. We received a notice from the Arizona Department of Revenue indicating we were responsible for an additional 6% Pima County occupancy tax, in addition to the 6% State of Arizona occupancy tax we were already collecting and submitting to the State. To further complicate the situation, our filing position was such that we did not believe or know we were liable for any other tax, other than the State mandated 6%, because our hotel was located in an unincorporated area within Pima County. We were not aware of an additional County tax, and thus we filed our monthly returns as such. These additional amounts due for Hotel sales and occupancy expenses are not expected to be recurring, since the Trust collects and remits all necessary occupancy taxes to the state monthly.

19. COVID-19 DISCLOSURE

COVID-19 has had a material detrimental impact on our business, financial results and liquidity, and such impact could worsen and last for an unknown period of time.

The global spread of COVID-19 has been and continues to be a complex and rapidly evolving situation, with governments, public institutions and other organizations imposing or recommending, and business and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation, limitations on the size of gatherings, closures of or occupancy or other operating limitations on work facilities, schools, public buildings and business, cancellation of events, including sporting events, conferences and meetings, and quarantines and lock-downs. COVID-19 and its consequences have dramatically reduced travel and demand for hotel rooms, which has and will continue to impact our business, operations, and financial results. We believe that it will be some time before lodging demand and revenue level recover and such recovery could vary across markets or regions around the world. The extent to which COVID-19 impacts our business, operations, and financial results, including the duration and magnitude of such effects, will depend on numerous evolving factors that we may not be able to accurately predict or assess, including the duration and scope of COVID-19 (including the location and extent of resurgences of the virus and the availability of effective treatments or vaccines); the negative impact COVID-19 has on global and regional economies and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence.

20. SUBSEQUENT EVENTS

The Trust received an Income Tax Refund from the State of California, for an Amended 2018 Tax Return in the amount of approximately $175,000 on August 26, 2020. Furthermore, the Trust is anticipating an Income Tax Refund from the Internal Revenue Service, for an Amended 2018 Tax Return in the amount of approximately $119,000.

Management expects but cannot guarantee the Paycheck Protection Plan (PPP) Loans received by IHT, as well as the Tucson and Albuquerque hotels, because of the Covid-19 Virus Pandemic, to be fully forgiven, based upon Small Business Administration (SBA) guidelines. Furthermore, IHT has received preliminary approval of forgiveness from the lender on December 1, 2020, the approval is contingent on SBA approval. The approval process could take up to 90 days, to February 28, 2021.

On November 20, 2020, the Trust extended a $500,000 line of credit to UPI at an annual interest rate of 6%. The maturity date of the line of credit is December 31, 2024. Certain terms of the line of credit agreement are met, so the Trust will be granted 300,000 common stock warrants of UPI with an exercise price of $2.25 per share.

An affiliate of the Trust sold the Tempe Hotel on December 18, 2020. The Trust has received the full repayment of the approximately $1 million intercompany loan to Tempe. In addition, Rare Earth Financial (“REF”), an Affiliated Member of the Tempe Hotel has repaid approximately an $800,000 intercompany loan from the Trust.

As of February 1, 2021, UniGen has not drawn any funds and under the terms may not draw any funds; however IHT may at its sole discretion fund up to $500,000 and convert this into UniGen stock at $1.00 per share.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and our Form 10-K for the fiscal year ended January 31, 2020.

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. We intend that such forward-looking statements be subject to the safe harbors created by such Acts. These forward-looking statements include statements regarding our intent, belief or current expectations in respect of (i) the declaration or payment of dividends; (ii) the leasing, management or operation of the Hotels; (iii) the adequacy of reserves for renovation and refurbishment; (iv) our financing plans; (v) our position regarding investments, acquisitions, developments, financings, conflicts of interest and other matters; (vi) expansion of IBC Hotels; (vii) our plans and expectations regarding future sales of hotel properties; and (viii) trends affecting our or any Hotel’s financial condition or results of operations.

These forward-looking statements reflect our current views in respect of future events and financial performance, but are subject to many uncertainties and factors relating to the operations and business environment of the Hotels that may cause our actual results to differ materially from any future results expressed or implied by such forward-looking statements. Examples of such uncertainties include, but are not limited to:

● Covid-19 Virus Pandemic and its effect on the Economic and Travel Industry slowdown;

● local, national or international, political economic and business conditions, including, without limitation, conditions that may, or may continue to, affect public securities markets generally, the hospitality industry or the markets in which we operate or will operate;

● fluctuations in hotel occupancy rates;

● changes in room rental rates that may be charged by InnSuites Hotels in response to market rental rate changes or otherwise;

● seasonality of our hotel operations business;

● our ability to sell any of our Hotels at market value, listed sale price 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 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 Hotels® brand;

● loss of membership contracts;

● the financial condition of franchises, brand membership companies and travel related companies;

● ability to develop and maintain positive relations with “Best Western Plus” or “Best Western” and potential future franchises or brands;

● real estate and hospitality market conditions;

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● 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 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 may affect trade and travel

● our ability to cost effectively integrate any acquisitions with the Trust in a timely manner;

● increases in the cost of labor, energy, healthcare, insurance and other operating expenses as a result of changed or increased regulation or otherwise;

● terrorist attacks or other acts of war;

● 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 insurance coverage and increases in cost for 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 the 2017 Tax Cuts and Jobs Act

We do not undertake any obligation to update publicly or revise any forward-looking statements whether as a result of new information, future events or otherwise except as may be required by law. Pursuant to Section 21E(b)(2)(E) of the Securities Exchange Act of 1934, as amended, the qualifications set forth hereinabove are inapplicable to any forward-looking statements in this Form 10-K relating to the operations of the Partnership.

OVERVIEW

We are engaged in the ownership and operation of hotel properties. On July 31, 2020, the Trust had two moderate service hotels in Tucson, Arizona and Albuquerque, New Mexico with 270 hotel suites, (and managed a third hotel in Tempe, Arizona, which was subsequently sold December 18, 2020). Both of our Hotels are branded through membership agreements with Best Western, and both are trademarked as InnSuites Hotels. We are also involved in various operations incidental to the operation of hotels, such as the operation of restaurants and meeting/banquet room rentals.

At July 31, 2020, we owned, through our sole general partner’s interest in the Partnership, a direct 20.17% interest in the Albuquerque, New Mexico Hotel, and, together with the Partnership, owned an indirect 51.01% interest in the Tucson, Arizona Hotel.

Our operations consist of one reportable segment – Hotel Ownership Operations & Hotel Management Services. Hotel Ownership Operations derives its revenue from the operation of the Trust’s two hotel properties with an aggregate of 270 hotel suites in Arizona and New Mexico. Hotel management services, provides management services for the Trust’s two Hotels and a non-owned hotel in Tempe, Arizona. As part of our management services, we also provide trademark and licensing services.

Over time, we expect our UniGen diversified investment to grow and provide another substantial source of income in the foreseeable future.

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Our results are significantly affected by occupancy and room rates at the Hotels, our ability to manage costs, changes in room rates, and changes in the number of available suites caused by the Trust’s disposition activities. Results are also significantly impacted by overall economic conditions and conditions in the travel industry including Covid-19 Virus economic and travel slow down. Unfavorable changes in these factors could negatively impact hotel room demand and pricing, which would reduce our profit margins on rented suites. Additionally, our ability to manage costs could be adversely impacted by significant increases in operating expenses, resulting in lower operating margins and higher hourly labor costs. Either a further increase in supply or a further decline in demand could result in increased competition, which could have an adverse effect on the rates and revenue of the Hotels in their respective markets.

We experienced weaker economic conditions during the first six months of fiscal year 2021, (February 1, 2020 to July 31, 2020), compared to fiscal year 2020 due to the Virus. We expect the major challenge for the remainder of fiscal year 2021 to be the economic and travel return from prior Covid-19 restrictive measures. We believe that we have positioned the Hotels to remain competitive through economic and travel recovery of our Hotels, by offering preferential Online Travel Agencies (OTA) and other marketing, good guest value, providing a relatively large number of two-room suites at each location, and by maintaining a robust complementary guest items and a free guest Internet access system.

Our strategic plan is to obtain the full benefit of our real estate equity, by marketing the Hotels at competitive prices over the next 24 months, and benefiting from our UniGen Power, Inc. clean energy diversification investment. In addition, the Trust is seeking a public, or large private reverse merger partner that may benefit from a merger that would afford that partner access to our listing on the NYSE AMERICAN. As we sell hotels and increase liquidity from our substantial equity, which substantially exceeds our debt and our low book values, we seek to diversify our investments. For more information on our strategic plan, including information on our progress in disposing of our hotel properties, and benefiting from our UPI clean energy investment, see “Future Positioning” in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

HOTEL OPERATIONS

Our expenses consist primarily of property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees, depreciation of the Hotels and hotel operating expenses. Hotel operating expenses consist primarily of payroll, guest and maintenance supplies, marketing and utilities expenses. Under the terms of its Partnership Agreement, the Partnership is required to reimburse us for all such expenses. Accordingly, management believes that a review of the historical performance of the operations of the Hotels, particularly with respect to occupancy, which is calculated as rooms sold divided by total rooms available, average daily rate (“ADR”), calculated as total room revenue divided by number of rooms sold, and revenue per available room (“REVPAR”), calculated as total room revenue divided by number of rooms available, is appropriate for understanding revenue from the Hotels.

The following tables show historical financial and other information for the periods indicated:

	For the Six Months Ended
Albuquerque	July 31,
	2020			2019			Change			%- Incr/Decr
Occupancy		53.85	%		95.32	%		(41.47	)%		(43.51	)%
Average Daily Rate (ADR)	$	66.21		$	75.22		$	(9.01	)		(11.98	)%
Revenue Per Available Room (REVPAR)	$	35.65		$	71.70		$	(36.05	)		(50.28	)%

	For the Six Months Ended
Tucson	July 31,
	2020			2019			Change			%- Incr/Decr
Occupancy		57.06	%		69.23	%		(12.17	)%		(17.58	)%
Average Daily Rate (ADR)	$	79.42		$	67.71		$	11.71			17.29	%
Revenue Per Available Room (REVPAR)	$	45.32		$	46.88		$	(1.56	)		(3.33	)%

No assurance can be given that occupancy, ADR and REVPAR will not increase or decrease as a result of changes in national or local economic, or economic travel, and/or hospitality industry conditions.

We enter transactions with certain related parties from time to time. For information relating to such related party transactions see the following:

● For a discussion of management and licensing agreements with certain related parties, see “Note 2 to our Unaudited Condensed Consolidated Financial Statements – Summary of Significant Policies – Revenue Recognition – Hotel Operations”

● For a discussion of guarantees of our mortgage notes payable by certain related parties, see Note 6 to our Unaudited Condensed Consolidated Financial Statements – “Mortgage Notes Payable.”

● For a discussion of our equity sales and restructuring agreements involving certain related parties, see Notes 3 to our Unaudited Condensed Consolidated Financial Statements – “Sale of Ownership Interests in Subsidiaries”.

● For a discussion of other related party transactions, see Note 11 to our Unaudited Condensed Consolidated Financial Statements – “Related Party Transactions.”

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RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JULY 31, 2020 COMPARED TO THE SIX MONTHS ENDED JULY 31, 2019

A summary of total operating results of the Trust for the six months ended July 31, 2020 and 2019 is as follows:

	2020			2019			Change			% Change
Total Revenues	$	2,370,798		$	3,633,233		$	(1,262,435	)		(35	)%
Operating Expenses		3,887,365			4,208,238			320,873			8	%
Operating Loss		(1,516,567	)		(575,005	)		(942,562	)		(164	)%
Interest Income		64,352			3,527			60,825			1,725	%
Interest Expense		(168,027	)		(188,912	)		20,885	)		(11	)%
Income Tax Provision		-			-			-			0	%
Consolidated Net Loss		(1,620,242	)		(760,390	)		(859,852	)		(113	)%

As a result of the sale of IBC (see Note 16), the Chief Operating Decision Maker (“CODM”), Mr. Wirth, CEO of the Trust, has determined that the Trust operations are comprised of one reportable segment, Hotel Operations & Corporate Overhead (operations) segment that has ownership interest in two hotel properties with an aggregate of 270 suites in Arizona and New Mexico. The Trust has a concentration of assets in the southwest United States and the southern Arizona market. Prior to the sale of IBC, the Trust had previously determined that its operations were comprised of two reportable segments, a Hotel Operations & Corporate Overhead segment, and the IBC Hospitality segment serving 2,000 unrelated hotel properties.

The Trust has its hotel investments in the southwest region of the United States. The CODM does not review assets by geographical region; therefore, no statement of operations or balance sheet information by geographical region is provided.

REVENUE:

For the six months ended July 31, 2020, we had total revenue of approximately $2.4 million compared to approximately $3.6 million for the six months ended July 31, 2019, a decrease of approximately $1.2 million. In the prior fiscal years ended January 31, 2020, 2019 and 2018, we made significant improvements to our Albuquerque, New Mexico and Tucson, Arizona. However, during the six months ended July 31, 2020, we had a significant decrease in total revenue resulting from the decreased demand and extensive travel restrictions imposed due to COVID-19.

We realized a 61.4% decrease in room revenues during the six months ended July 31, 2020 as room revenues were approximately $2.1 million for the six months ending July 31, 2020 as compared to approximately $3.5 million for the six months ending July 31, 2019. Due to improved selections in-house along with the increased demand resulting from the COVID-19 lockdowns elsewhere, food and beverage revenue increased slightly by 1.8% to approximately $33,000 for the six months ending July 31, 2020 as compared to approximately $32,400 during the six months ending July 31, 2019, an increase of approximately $570. During the remainder of Fiscal year 2021, we expect improvements in occupancy. Management and trademark fee revenues increased during the six months ended July 31, 2020 and were approximately $134,635 compared to approximately $98,516 during the six months ended July 31, 2019. During the remainder of Fiscal year 2021, we expect management and trademark fee revenues to be flat or down with the sale of our Tempe hotel. We realized an approximate 107% increase in other revenues from the hotel properties during the six months ended July 31, 2020 to approximately $75,000 as compared to approximately $36,000 during the six months ended July 31, 2019.

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EXPENSES:

Total expenses net of interest expense was approximately $3.9 million for the six months ended July 31, 2020 reflecting a decrease of approximately $321,000, or 8%, compared to total expenses net of interest expense of approximately $4.2 million for the six months ended July 31, 2019. The decrease was primarily due to a decrease in operating expenses related to decreased occupancy and revenues at the hotel properties, offset by sales and occupancy expense.

Room expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation fees and room supplies were approximately $826,000 for the six months ended July 31, 2020 compared to approximately $1.0 million in the prior year six month period for a decrease of approximately $202,000, or 20%. Room expenses decreased as occupancy at the hotels decreased, and reduce expenses were incurred with the decreased occupancy.

Food and beverage expenses included food and beverage costs, personnel, and miscellaneous costs to provide banquet events. For the six months ended July 31, 2020, food and beverage expenses increased approximately $16,000, or 34%, to approximately $63,000 for six months ended July 31, 2020, compared to approximately $47,000 for the six months ended July 31, 2019. The increase in cost relative to the decrease in food and beverage revenue is due to increasing food and beverage purchasing costs.

General and administrative expenses include overhead charges for management, accounting, shareholder and legal services. General and administrative expenses of approximately $917,000 for the six months ended July 31, 2020, decreased approximately $585,000 from approximately $1.5 million for the six months ended July 31, 2019 primarily due to lower charges in corporate staffing in support of the hotels and property sales efforts.

Sales and marketing expense decreased approximately $51,000, or 19%, to approximately $223,000 for the six months ended July 31, 2020 from approximately $274,000 for the six months ended July 31, 2019. Open positions for sales and marketing resources, due to a tight labor market, accounted for the decrease.

Repairs and maintenance expense decreased by approximately $27,000, or 13%, to approximately $175,000 for the six months ended July 31, 2020 from approximately $202,000 for the six months ended July 31, 2019. 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.

Hospitality expense decreased by approximately $176,000, or 65%, to approximately $94,000 for the six months ended July 31, 2020 from approximately $271,000 for the six months ended July 31, 2019. The decrease was primarily due to the reduced occupancy and reduced breakfast offerings at the hotel properties due to COVID-19 restrictions.

Utility expenses decreased approximately $15,000, or 8%, to approximately $178,000 reported for the six months ended July 31, 2020 from approximately $193,000 for the six months ended July 31, 2019. The decrease was primarily due to the reduced occupancy at the hotel properties due to COVID-19 restrictions.

Hotel property depreciation expenses decreased by approximately $68,000 to approximately $427,000 for the six months ended July 31, 2020 from approximately $495,000 for the six months ended July 31, 2019. Decreased depreciation resulted from the capital expenditures being fully depreciated.

Real estate and personal property taxes, Insurance and Ground Rent expenses increased approximately $25,000, or 13%, to approximately $210,000 for the six months ended July 31, 2020 from approximately $185,000 for the six months ended July 31, 2019. The increase was primarily due to increased insurance costs.

Sales and occupancy tax increased approximately $766,000, or 100%, to approximately $766,000 for the six months ended July 31, 2020 from $0 for the six months ended July 31, 2019. This represents a liability arising from an occupancy tax discrepancy generated from our Tucson hotel which arose when we were notified in July 2020, of potentially underreporting and/or under collecting occupancy tax. We received a notice from the Arizona Department of Revenue indicating we were responsible for an additional 6% Pima County occupancy tax, in addition to the 6% State of Arizona occupancy tax we were already collecting and submitting to the State. To further complicate the situation, our filing position was such that we did not believe or know we were liable for any other tax, other than the State mandated 6%, because our hotel was located in an unincorporated area within Pima County. We were not aware of an additional County tax, and thus we filed our monthly returns as such. These additional amounts due for Hotel sales and occupancy expenses are not expected to be recurring, since the Trust collects and remits all necessary occupancy taxes to the state monthly.

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 2020 COMPARED TO THE THREE MONTHS ENDED JULY 31, 2019

A summary of total operating results of the Trust for the three months ended July 31, 2020 and 2019 is as follows:

	2020			2019			Change			% Change
Total Revenues	$	924,720		$	1,540,215		$	(615,495	)		(40	)%
Operating Expenses		2,158,467			1,953,556			(204,911	)		(10	)%
Operating Loss		(1,233,747	)		(413,341	)		(820,406	)		(198	)%
Interest Income		46,596			713			45,883			6,435	%
Interest Expense		(148,234	)		(66,010	)		(14,224	)		22	%
Income Tax Provision		-			-			-			0	%
Consolidated Net Loss		(1,335,385	)		(478,638	)		(788,747	)		(165	)%

REVENUE:

For the three months ended July 31, 2020, we had total revenue of approximately $925,000 compared to approximately $1.5 million for the three months ended July 31, 2019, a decrease of approximately $615,000. In the prior fiscal years ended January 31, 2020, 2019 and 2018, we made significant improvements to our Albuquerque, New Mexico and Tucson, Arizona. However, during three months ended July 31, 2020, we had a significant decrease in total revenue resulting from the decreased demand and extensive travel restrictions imposed due to COVID-19.

We realized a 42% decrease in room revenues during the three months ended July 31, 2020 as room revenues were approximately $846,000 for the three months ending July 31, 2020 as compared to approximately $1.5 million for the three months ending July 31, 2019. Due to improved selections in-house along with the increased demand resulting from the COVID-19 lockdowns elsewhere, food and beverage revenue increased by 22% to approximately $18,000 for the three months ending July 31, 2020 as compared to approximately $15,000 during the three months ending July 31, 2019, an increase of approximately $3,000. During fiscal year 2021, we expect additional improvements in occupancy, modest improvements in rates and steady food and beverage revenues. Management and trademark fee revenues decreased during the three months ended July 31, 2020 and were approximately $32,000 compared to approximately $35,000 during the three months ended July 31, 2019. During the remainder of fiscal year 2021, we expect management and trademark fee revenues to be flat over fiscal year 2021 due to decreases in revenues. We realized an approximate 42% increase in other revenues from the hotel properties during the three months ended July 31, 2020 to approximately $29,000 as compared to approximately $20,000 during the three months ended July 31, 2019.

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EXPENSES:

Total expenses net of interest expense was approximately $2.2 million for the three months ended July 31, 2020 reflecting an increase of approximately $205,000, or 10%, compared to total expenses net of interest expense and income tax provision of approximately $1.9 million for the three months ended July 31, 2019. The increase was primarily due to sales and occupancy expense, offset by decreases in operating expenses related to decreased occupancy and revenues at the 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 $357,000 for the three months ended July 31, 2020 compared to approximately $487,000 in the prior year three month period for a decrease of approximately $130,000, or 27%. Room expenses decreased as occupancy at the hotels decreased, and reduce expenses were incurred with the decreased occupancy.

Food and beverage expenses included food and beverage costs, personnel, and miscellaneous costs to provide banquet events. For the three months ended July 31, 2020, food and beverage expenses increased approximately $8,000, or 32%, to approximately $31,000 for three months ended July 31, 2020, compared to approximately $23,000 for the three months ended July 31, 2019. The increase in cost relative to the decrease in food and beverage revenue is due to increasing food and beverage purchasing costs.

General and administrative expenses include overhead charges for management, accounting, shareholder and legal services. General and administrative expenses of approximately $340,000 for the three months ended July 31, 2020, decreased approximately $314,000 from approximately $654,000 for the three months ended July 31, 2019 primarily due to lower charges in corporate staffing in support of the hotels and property sales efforts.

Sales and marketing expense decreased approximately $34,000, or 23%, to approximately $112,000 for the three months ended July 31, 2020 from approximately $146,000 for the three months ended July 31, 2019. Open positions for sales and marketing resources, due to a tight labor market, accounted for the decrease.

Repairs and maintenance expense decreased by approximately $16,000, or 16%, to approximately $87,000 for the three months ended July 31, 2020 from approximately $102,000 for the three months ended July 31, 2019. 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.

Hospitality expense decreased by approximately $105,000, or 80%, to approximately $26,000 for the three months ended July 31, 2020 from approximately $131,000 for the three months ended July 31, 2019. The decrease was primarily due to the reduced occupancy at the hotel properties due to COVID-19 restrictions.

Utility expenses decreased approximately $4,000, or 4%, to approximately $97,000 reported for the three months ended July 31, 2020 from approximately $101,000 for the three months ended July 31, 2019. The decrease was primarily due to the reduced occupancy at the hotel properties due to COVID-19 restrictions.

Hotel property depreciation expenses decreased by approximately $40,000 to approximately $212,000 for the three months ended July 31, 2020 from approximately $253,000 for the three months ended July 31, 2019. Decreased depreciation resulted from the capital expenditures being fully depreciated.

Real estate and personal property taxes, Insurance and Ground Rent expenses increased approximately $76,000, or 149%, to approximately $126,000 for the three months ended July 31, 2020 from approximately $51,000 for the three months ended July 31, 2019. The increase was primarily due to a combination of factors, including increased insurance costs, and the adoption and inclusion of ASC 842 Lease Accounting within the current fiscal year.

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Sales and occupancy tax increased approximately $766,000, or 100%, to approximately $766,000 for the three months ended July 31, 2020 from $0 for the three months ended July 31, 2019. This represents a liability arising from an occupancy tax discrepancy generated from our Tucson hotel which arose when we were notified in July 2020, of potentially underreporting and/or under collecting occupancy tax. We received a notice from the Arizona Department of Revenue indicating we were responsible for an additional 6% Pima County occupancy tax, in addition to the 6% State of Arizona occupancy tax we were already collecting and submitting to the State. To further complicate the situation, our filing position was such that we did not believe or know we were liable for any other tax, other than the State mandated 6%, because our hotel was located in an unincorporated area within Pima County. We were not aware of an additional County tax, and thus we filed our monthly returns as such. These additional amounts due for Hotel sales and occupancy expenses are not expected to be recurring, since the Trust collects and remits all necessary occupancy taxes to the state monthly.

LIQUIDITY AND CAPITAL RESOURCES

Overview – Hotel Operations & Corporate Overhead

One principal source of cash to meet our cash requirements, including dividends to our shareholders, is our share of the Partnership’s cash flow of the Tucson hotel, and quarterly distributions from the Albuquerque, New Mexico properties. Another principal source of cash is management fees earned in the operation of the Trusts’ two hotels plus one affiliated hotel, and potential future hotel sales. Also, another source of cash is repayment of the intercompany loans, which was recently facilitated with the Tempe Hotel sale. The Partnership’s principal source of revenue is hotel operations for the hotel property it owns in Tucson, Arizona. Our liquidity, including our ability to make distributions to our shareholders, will depend upon our ability, and the Partnership’s ability, to generate sufficient cash flow from hotel operations, from management fees, and from the potential sale and/or refinance of the hotel, and to service our debt and the source of repayment of intercompany loan from Tucson & Albuquerque and Tempe.

Hotel operations are significantly affected by occupancy and room rates at the Hotels in the current Fiscal year 2021. We anticipate occupancy will partially recover from the Virus, and the related economic and travel slowdown during Fiscal 2021. Capital improvements are expected to decrease from the prior year.

With approximately $130,000 of cash and short term investments as of July 31, 2020 and the availability of a $150,000 bank line of credit, a $1,000,000 related party Demand/Revolving Line of Credit/Promissory Note, the potential repayment of $2.5 million in intercompany loans to be paid upon refinance of the Tucson hotel expected during the third quarter of 2022, repayment of the $800,000 in intercompany loans from the sale of the Tempe hotel on December 18, 2020, and the availability of Advances to Affiliate credit facilities and available Bank line of Credit in excess of $1,000,000 maximum borrowing capacity, 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 unaudited condensed consolidated financial statements. In addition, our management is analyzing other strategic options available to us, including raising additional funds, additional asset sales, increasing borrowings at our Tucson hotel, using the funds generated to pay intercompany loans (1) due from the Tucson hotel to the Partnership (2) and other due from affiliates. However, such transactions may not be available on terms that are favorable to us, or at all.

IHT and IBC agreed to extend the payment schedule on IBC’s note receivable by one (1) year, extending the first payment from November 2020 to November 2021. The reason for the extension is in support of IBC’s cash requirements; related to IBC’s realization of fully benefiting from a return in occupancy and travel, and their agreement with a large search-engine company and a European digital marketing company, which together have the potential of greatly increasing both IBC’s revenues and profits. These potential benefits may in turn improve IHT’s secured position on its note receivable from IBC. Management also believes that even with an additional extension repayment term due to COVID-19 that the future collectability is probable and not subject to further impairment, or allowance currently.

Refer to Note 16 – “Note Receivable” for information related to the Sale of IBC Hospitality Technologies (IBC).

There can be no assurance that we will be successful in refinancing debt or raising additional or replacement funds, or that these funds may be available on terms that are favorable to us. 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.

We anticipate no additional new-build hotel supply during the remaining fiscal year 2021, and accordingly we anticipate some recovery of revenues and operating margins. We expect the major challenge for the upcoming fiscal year to be the economic and travel recovery of leisure, corporate, group, and government business in the markets in which we operate, which may affect our ability to recover occupancy and eventually increase room rates while maintaining and/or building market share.

Negative cash used in operating activities from operations totaled approximately $1,193,000 during the six months ended July 31, 2020 as compared to net cash provided by approximately $411,000 during the six months ended July 31, 2019. Consolidated net loss was approximately $1.6 million for the six months ended July 31, 2020 as compared to consolidated net loss for the six months ended July 31, 2019 of approximately $760,000. Explanation of the differences between these fiscal years are explained above in the results of operations of the Trust.

Changes in the adjustments to reconcile net loss for the six months ended July 31, 2020 and 2019, respectively, consist primarily of operating lease costs, stock-based compensation, hotel property depreciation, and changes in assets and liabilities. Hotel property depreciation was approximately $427,000 during the six months ended July 31, 2020 compared to approximately $495,000 during the six months ended July 31, 2019, a decrease of $68,000 as the Trust recognized less depreciation as capitalized fixed assets became fully depreciated.

Changes in assets and liabilities for accounts receivable, prepaid expenses and other assets and accounts payable and accrued expenses totaled approximately $13,000 and $628,000 for the six months ended July 31, 2020 and 2019, respectively. This significant increase in changes in assets and liabilities for the six months ended July 31, 2020 compared to the six months ended July 31, 2019 was due to the increase in operating liabilities related to ongoing operations.

Net cash used in investing activities totaled approximately $400,000 for the six months ended July 31, 2020 compared to net cash provided by investing activities of approximately $220,000 for six three months ended July 31, 2019. The change in net cash provided by investing activities during the six months ended July 31, 2020 was due primarily due to the additional investment into UniGen.

Net cash used in financing activities totaled approximately $278,000 and $764,000, respectively, for the six months ended July 31, 2020 and 2019. The decrease of approximately $487,000 was primarily due to SBA PPP loans, which became available soon after the Covid-19 Pandemic arose, as previously discussed.

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Principal payments on mortgage notes payable for operations was approximately $81,000 and $58,000 during the six months ended July 31, 2020 and 2019, respectively. Net payments and borrowings on notes payable to banks was approximately $17,000 and approximately $156,000 during the six months ended July 31, 2020 and 2019, respectively.

Collections on notes payables – related party, netted against borrowings on note payable–related party, was approximately $161,000 and $159,000 of cash used in financing activities during the six months ended July 31, 2020 and 2019, respectively.

Collections on other notes payables netted against borrowings on other note payable was approximately $381,000 and ($533,000) of net cash used in financing activities during the six months ended July 31, 2020 and 2019, respectively.

Proceeds from sales of non-controlling ownership interests in subsidiaries increased by approximately $10,000 as sales of non-controlling ownership interest was $10,000 for the six months ended July 31, 2020 and approximately $0 for the six months ended July 31, 2019. We had no sales of our IHT stock for cash for the six months ended July 31, 2020 and 2019.

During the six months ended July 31, 2020, our distributions to non-controlling interest holders was approximately $105,000 compared with approximately $200,000 for the six months ended July 31, 2019.

We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of the InnSuites Hotels’ revenues from operation of the Hotels. The Fund is restricted by the mortgage lender for one of our properties. As of July 31, 2020, and 2019, there were no monies held in these accounts reported on our Consolidated Balance Sheet as “Restricted Cash.” The Fund is intended to be used for capital improvements to the Hotels and refurbishment and replacement of furniture, fixtures and equipment. During the six months ended July 31, 2020 and 2019, the Hotels spent approximately $0 and $191,000, respectively, for capital expenditures. The capital expenditures were primarily associated with the property improvements at the Hotels, as required to meet continuing Best Western standards. We consider most of these improvements to be revenue producing. Therefore, these amounts are capitalized and depreciated over their estimated useful lives. For the remaining fiscal year 2021 capital expenditures, we plan on spending less on capital improvements as we have completed our property improvements at our Tucson, Arizona hotel which required significant amounts of capital improvements during the six months ending July 31, 2019. Repairs and maintenance were charged to expense as incurred and approximated $87,000 and $103,000 for the six months ended July 31, 2020 and 2019, respectively.

We have minimum debt payments, net of debt discounts, of approximately $767,000 and approximately $731,000 due during fiscal years 2021 and 2022, respectively. Minimum debt payments due during fiscal year 2021 and 2022 include approximately $81,000 and $171,000 of mortgage notes payable, and approximately $686,000 and $560,000 of other notes payable, which are secured promissory notes outstanding to unrelated third parties arising from the Shares of Beneficial Interest and Partnership unit repurchases, respectively.

We may seek to negotiate additional credit facilities or issue debt instruments. Any debt incurred or issued by us may be secured or unsecured, long-term, medium-term, or short-term, bear interest at a fixed or variable rate and be subject to such other terms as we consider prudent.

COMPETITION IN THE HOTEL INDUSTRY

The hotel industry is highly competitive. We expect the major challenge for the fiscal years ending January 31, 2021 and January 31, 2022 (“fiscal years 2021 and 2022”) to be the occupancy and rate recovery from the Virus related economic, travel, and hotel industry slowdown. Each of the Hotels faces competition primarily from other mid-market hotels located in its immediate vicinity, but also competes with hotel properties located in other geographic markets, and increasingly from alternative lodging facilities, such as Airbnb. While none of the Hotels’ competitors dominate any of their geographic markets, some of those competitors may have greater marketing and financial resources than the Trust. Some of business destinations have been put on hold pending economic and travel recovery in the months ahead.

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With the economic and travel slowdown because of COVID 19, the hotel industry faces excess supply at this point. Additional hotel property developments may be built in the future. Such hotel developments have had, and could continue to have, an adverse effect on the revenue of our Hotels in their respective markets.

The Trust’s hotel investments are in Arizona and New Mexico, with the completed renovations at our Tucson, Arizona and Albuquerque, New Mexico hotel properties. With the Virus related economic and travel related slowdown, those hotels have seen a large drop in additional demand as supply has been relatively steady in those respective markets. An increase in supply or a further 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 also compete for investment diversified opportunities with other entities that have greater financial resources. These entities also may generally accept more risk than the Trust can prudently manage. Competition may generally reduce the number of suitable future investment opportunities available to the Trust and increase the bargaining power of owners seeking to sell their properties.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

As a partial offset to the current hotel industry Virus induced drop in demand pressure, the Trust looks to benefit from, and expand, its UPI clean energy operation diversification investments in the months, and years ahead. See Note 2 of the unaudited condensed consolidated financial statements for discussion on UPI.

In our Annual Report on Form 10-K for the fiscal year ended January 31, 2020 filed with the SEC on August 14, 2020, we identified the critical accounting policies that affect our more significant estimates and assumptions used in preparing our condensed consolidated financial statements. We believe that the policies we follow for the valuation of our Hotel properties, which constitute most of our assets, are our most critical policies which has not changed in the period ended July 31, 2020. Those policies include methods used to recognize and measure any identified impairment of our Hotel property assets.

Asset Impairment

We believe that the policies we follow for the valuation of our hotel properties, which constitute most of our assets, are our most critical policies. The Financial Accounting Standards Board (“FASB”) has issued authoritative guidance related to the impairment or disposal of long-lived assets, codified in ASC Topic 360-10-35, which we apply to determine when it is necessary to test an asset for recoverability. On an events and circumstances basis, we review the carrying value of our hotel properties. We will record an impairment loss and reduce the carrying value of a property when anticipated undiscounted future cash flows and the current market value of the property do not support it carrying value. 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 for the six months ended July 31, 2020 or 2019. As of July 31, 2020, our management does not believe that the carrying values of any of our hotel properties are impaired.

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 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 hotel per year over the next 24 months. We believe that each of the assets is available at a price that is reasonable in relation to its current fair market value. The plan is to work to sell the remaining two hotel properties over the next 24 months, and if needed beyond.

Revenue Recognition

ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers” is effective for reporting period after January 1, 2018. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations.

Revenues are primarily derived from the following sources and are recognized as services are rendered and when collectability is reasonably assured. Amounts received in advance of revenue recognition are considered deferred liabilities.

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Revenues primarily consist of room rentals, food and beverage sales, management and trademark fees and other miscellaneous revenues from our properties. Revenues are recorded when rooms are occupied and when food and beverage sales are delivered. Management and trademark fees from non-affiliated hotels include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels and the one hotel owned by affiliates of Mr. Wirth.

Each room night consumed by a guest with a cancellable reservation represents a contract whereby the Company has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Company recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Company has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Company recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Company uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.

In evaluating its performance obligation, the Company bundles the obligation to provide the guest the room itself with other obligations (such as free Wi-Fi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Company’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Company has no performance obligations once a guest’s stay is complete.

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

COMPLIANCE WITH CONTINUED LISTING STANDARDS OF NYSE AMERICAN

On May 16, 2020, the Trust received a letter from NYSE AMERICAN giving an official notice of noncompliance of the Trust with continued listing standards of NYSE American LLC (the “Exchange”) because the Trust failed to timely file with the Securities and Exchange Commission (the “SEC”) its Annual Report on Form 10-K for the year ended January 31, 2020 (the “Delinquent Report”). This filing delinquency subjects the Trust to the procedures and requirements of Section 1007 of the NYSE American Company Guide. The requisite Form 8-K and associated press release were issued on May 22, 2020, and the Trust filed the annual Form 10-K on August 14, 2020.

The Trust is currently out of compliance for timely filing SEC quarterly reports for the First, Second (and Third) Fiscal Quarters ended October 31, 2020. The Trust plans to bring the filings into compliance and will be completed by March 25, 2021.

Due to COVID-19 disruptions, and consistent with SEC guidelines, the Trust extended their filing dates of the 10-K for the fiscal year time period ended January 31, 2020, the first quarter 10-Q for the fiscal year ended April 30, 2020, the second quarter 10-Q for the fiscal quarter ended July 31, 2020, and the third quarter 10-Q for the fiscal year ended October 31, 2020. The 45-day SEC extension for the second fiscal quarter extended the filing compliance date to October 31, 2020. An additional 45-day SEC extension for the second fiscal quarter extended the filing compliance date to February 15, 2021. The Trust applied for and was granted an additional 60-day SEC compliance extension to April 15, 2021. IHT plans to be in filing compliance with the SEC and NYSE AMERICAN by March 25, 2021.

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NON-GAAP FINANCIAL MEASURES

The following non-GAAP presentations of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and funds from operations (“FFO”) are made to assist our investors in evaluating our operating performance.

Adjusted EBITDA is defined as earnings before interest expense, amortization of loan costs, interest income, income taxes, depreciation and amortization, and non-controlling interests in the Trust. We present Adjusted EBITDA because we believe these measurements (a) more accurately reflect the ongoing performance of our hotel assets and other investments, (b) provide more useful information to investors as indicators of our ability to meet our future debt payments and working capital requirements, and (c) provide an overall evaluation of our financial condition. Adjusted EBITDA as calculated by us may not be comparable to Adjusted EBITDA reported by other companies that do not define Adjusted EBITDA exactly as we define the term. 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.

A reconciliation of net loss attributable to controlling interests to Adjusted EBITDA for the three and six months ended July 31, 2020 and 2019 is approximately as follows:

	Three Months Ended July 31,						Six Months Ended July 31,
	2020			2019			2020			2019
Net loss attributable to controlling interests	$	(665,000	)	$	(464,000	)	$	(807,000	)	$	(805,000	)
Add back:
Depreciation		212,000			253,000			427,000			495,000
Interest expense		80,000			66,000			168,000			189,000
Taxes		-			-			-			-
Less:
Interest Income		(47,000	)		(1,000	)		(64,000	)		(4,000	)
Adjusted EBITDA	$	(420,000	)	$	(146,000	)	$	(276,000	)	$	(125,000	)

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 depreciation and amortization of real estate assets, and after adjustments for unconsolidated joint ventures and non-controlling interests in the operating partnership. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. The Trust is an unincorporated Ohio real estate investment trust; however, the Trust is not a real estate investment trust for federal taxation purposes. Management uses this measurement to compare itself to REITs with similar depreciable assets. We consider FFO to be an appropriate measure of our ongoing normalized operating performance. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other companies that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO does not represent cash generated from operating activities as determined by 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, nor is it indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO should be considered along with our net income or loss and cash flows reported in the unaudited condensed consolidated financial statements.

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An approximate reconciliation of net loss attributable to controlling interests to FFO for the three and six months ended July 31, 2020 and 2019:

	Three Months Ended July 31,						Six Months Ended July 31,
	2020			2019			2020			2019
Net loss attributable to controlling interests	$	(665,000	)	$	(464,000	)	$	(807,000	)	$	(805,000	)
Add back:
Depreciation		427,000			495,000			427,000			495,000
Non-controlling interest		(602,000	)		(15,000	)		(813,000	)		44,000
FFO	$	(840,000	)	$	16,000		$	(1,193,000	)	$	(266,000	)

FUTURE POSITIONING

In viewing the hotel industry cycles, recently reconfirmed by the COVID-19 disruption of travel and hospitality, the Board of Trustees determined that it was appropriate to actively seek buyers for our two remaining Hotel properties. We continue to make our Tucson Hotel and Albuquerque Hotel available for sale at market value, on the website www.suitehotelsrealty.com.

The table below provides book values, mortgage balances and listed asking price for the Hotels.

Hotel Property	Book Value		Mortgage Balance		Asking Price
Albuquerque	$	3,588,046	$	1,375,771		7,995,000
Tucson Oracle		6,974,728		4,648,443		16,600,000
	$	10,562,774	$	6,024,214	$	24,595,000

The “Estimated Market Asking Price” is the amount at which we would sell each of the Hotels and is adjusted to reflect recent hotel sales in the Hotels’ areas of operation and current earnings of each of the Hotels. The listed asking price is not based on appraisals of the properties.

We have from time to time listed each of the properties with a local real estate hotel broker who has successfully sold four of our hotel properties and we believe that each of the assets are being marketed at a price that is reasonable in relation to its current fair value. We plan to sell our remaining two Hotel properties one within 12-18 months and the other within 12 months thereafter, based on feedback received by our local hotel real estate property professional brokers, who specialize in the selling/buying hotel real estate properties to review the sale of our Tucson and Albuquerque Hotel properties. 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 one or both. However, we believe that the asking price values are reasonable based on local market conditions, comparable sales, and anticipated upturns in occupancy, rates, and profits per hotel. Changes in market conditions have in part resulted, and may in the future result, in our changing one or all of the asking prices.

Our long-term strategic plan is to obtain the full benefit of our real estate equity, to benefit from our UniGen UPI 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.

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.” of our most recent 10-K Annual Report filed on August 14, 2020.

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OFF-BALANCE SHEET ARRANGEMENTS

Other than legal contingencies incurred in the normal course of business, we do not have any off-balance sheet financing arrangements or liabilities. We do not have any majority-owned or controlled subsidiaries that are not included in our unaudited condensed consolidated financial statements.

SEASONALITY

The Hotels’ operations historically have been somewhat seasonal. The Tucson Arizona hotel experiences the highest occupancy in the first fiscal quarter (the winter season) and, to a lesser extent, the fourth fiscal quarter. The second fiscal quarter tends to be the lowest occupancy period at this Arizona hotel. This seasonality pattern can be expected to cause fluctuations in the Trust’s quarterly revenues. The hotel located in New Mexico historically experiences their most profitable periods during the second and third fiscal quarters (the summer season), providing some balance to the general seasonality of the Trust’s hotel business.

The seasonal nature of the Trust’s business increases its vulnerability to risks such as pandemics, labor force shortages and cash flow issues. Further, if an adverse event such as an actual or threatened terrorist attack, international conflict, data breach, regional economic downturn or poor weather conditions should at either of its two hotels, the adverse impact to the Trust’s revenues and profit could be significant.

INFLATION

We rely entirely on the performance of the Hotels and InnSuites Hotels’ ability to increase revenue to keep pace with inflation. Operators of hotels in general and InnSuites Hotels can and do change room rates quickly, but competitive pressures may limit InnSuites Hotels’ ability to raise rates as fast as or faster than inflation.

INVESTMENT IN UNIGEN POWER, INC.

On December 16, 2019 the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UPI” or “UniGen”).

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%. The Debentures are convertible into Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share. The Loan is structured into two (2) payments of $600,000 and $400,000. The first payment of $600,000 was made by the Trust at closing on December 16, 2020 and the second payment was made on February 3, 2020.

UniGen issued the Trust common stock purchase warrants (the “Debenture Warrants”) to purchase up to 1,000,000 shares of Class A Common Stock (600,000 issued on January 31, 2020, and 400,000 issued on February 3, 2020). 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 200,000 shares of Class A Common Stock (120,000 issued on January 31, 2020, and 80,000 issued on February 3, 2020). The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.

On the Trust’s balance sheet, the investment of the $1,000,000 made in the current fiscal year consists of approximately $424,000 in note receivables and approximately $576,000 as the fair value of the warrant issued with the Trust’s investment in UniGen. The value of the premium related to the fair value of the warrant will accrete over the life of the debentures.

InnSuites Hospitality Trust (IHT) made an initial $600,000 diversification investment during Fiscal Year 2020 that could expand into a multi-million-dollar investment totaling up to approximately 25 percent ownership in privately held UniGen Power, Inc. (UPI) to develop a patented high profit potential new efficient clean energy generation innovation. The initial investment was made approximately one year ago in December 2019, with significant positive progress to date despite the virus, economic, and travel disruptions of 2020. During the first Fiscal Quarter of 2021, an additional investment of $400,000 was made bringing the total to $1 Million. The investment comprises of fair debt warrants with 6% annual interest that are convertible to UPI stock upon election of the Trust. The investment is valued at fair value (level 3). There is no Investment Commitment to Unigen requiring any restriction of cash.

Based on subsequent events, IHT is likely to obtain an opportunity to convert a $500,000 UniGen line of credit into 500,000 shares of UniGen. IHT will also likely obtain an additional 300,000 warrants at $2.25 per share. Full conversion of all IHT held convertible debt and UniGen warrants could result in 3 million shares of UniGen stock and if fully exercised would result in approximately 12 million UniGen shares, or approximately 25% of the total equity of UniGen held by IHT.

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The project has made positive progress and is on budget, and within 90 days of being on schedule with the first GenSet prototype anticipated to be in operation in June 2021, followed by initial expanded production on or before early 2022. The time delay is related to travel restrictions to UPI China suppliers and time needed to incorporate additional innovations discovered and design improvements. Global Supply sources include China, Italy, Israel, and the United States. Investors are cautioned of the substantial challenges ever present with this and any innovation. However, IHT has confidence in the UniGen technical team based in Detroit and in the encouraging progress to date. UPI profitability is anticipated to be 18-24 months or more into the future, but future high profit potential is encouraging for IHT investors, especially considering a full year of successful design and development work is now complete.

James Wirth (President) and Marc Berg (Executive Vice President) both lack significant control, and were elected in December 2019 to serve on the board of UPI to closely monitor and assist in the success of this potentially power industry disruptive relatively clean energy generation innovation.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of July 31, 2020.

Our management, including our Principal Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of the Company’s Principal Executive Officer and Chief Financial Officer and effected by the Company’s Board of Trustees, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that we determined to be material weaknesses, as follows:

● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

● Contain properly implemented comprehensive entity-level internal controls;

● Include properly implemented adequate system and manual controls;

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● Have sufficient segregation of duties;

● Have sufficient personnel with appropriate training and expertise in accounting principles generally accepted in the United States; and

● Implement appropriate information technology controls related to access rights for certain financial spreadsheets that are relevant to the preparation of the unaudited condensed consolidated financial statements and our system of internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Assessment of Internal Control over Financial Reporting

Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on management’s assessment, management concluded that the above material weaknesses have not been remediated and, accordingly, our internal control over financial reporting was not effective as of July 31, 2020. Current year efforts are being made to remediate some, if not all, of these material weaknesses.

Management’s Remediation Initiatives

In an effort to remediate the identified material weakness and other deficiencies and enhance the Company’s internal control over financial reporting, the Company made attempts to increase its technical accounting expertise by hiring a new Chief Financial Officer, Corporate Controller, and Staff Accountant with public company reporting experience to assist with the Company’s technical accounting and internal control issues.

We need to take appropriate and reasonable steps to make necessary improvements to our internal control over financial reporting, which will require management to support the hiring and training of sufficient personnel with appropriate training and expertise in accounting principles generally accepted in the United States. This increase to staffing and training will allow us to make the necessary improvements, including:

● Continuing to improve the control environment through (i) being staffed with sufficient number of personnel to address segregation of duties issues, ineffective controls and to perform control monitoring activities, (ii) increasing the level of GAAP knowledge by retaining additional technical accountants, (iii) implementing formal process to account for non-standard transactions, and (iv) implementing and formalizing management oversight of financial reporting at regular intervals;

● Continuing to update the documentation of our internal control processes, including implementing formal risk assessment processes and entity level controls;

● Implementing control activities that address relevant risks and assure that all transactions are subject to such control activities; Ensure systems that impact financial information and disclosures have effective information technology controls;

● Implementing plan to increase oversight and review of ad hoc spreadsheets while also working to reduce their use; and

● We are in the process of further enhancing the supervisory procedures to include additional levels of analysis and quality control reviews within the accounting and financial reporting functions.

We believe that the remediation measures described above will strengthen our internal control over financial reporting and remediate the material weaknesses we have identified. We expect these remediation efforts will be implemented throughout fiscal year 2022.

Despite the material weaknesses reported above, our management believes that our financial statements included in this Quarterly Report on Form 10-Q for the six months ended July 31, 2020 fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended July 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Risks Relating to COVID-19

COVID-19 has had a material detrimental impact on our business, financial results and liquidity, and such impact could worsen and last for an unknown period of time.

The global spread of COVID-19 has been and continues to be a complex and rapidly evolving situation, with governments, public institutions and other organizations imposing or recommending, and business and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation, limitations on the size of gatherings, closures of or occupancy or other operating limitations on work facilities, schools, public buildings and business, cancellation of events, including sporting events, conferences and meetings, and quarantines and lock-downs. COVID-19 and its consequences have dramatically reduced travel and demand for hotel rooms, which has and will continue to impact our business, operations, and financial results. We believe that it will be some time before lodging demand and revenue level recover and such recovery could vary across markets or regions around the world. The extent to which COVID-19 impacts our business, operations, and financial results, including the duration and magnitude of such effects, will depend on numerous evolving factors that we may not be able to accurately predict or assess, including the duration and scope of COVID-19 (including the location and extent of resurgences of the virus and the availability of effective treatments or vaccines); the negative impact COVID-19 has on global and regional economies and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 2, 2001, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 250,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. On September 10, 2002, August 18, 2005 and September 10, 2007, the Board of Trustees approved the purchase of up to 350,000 additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Additionally, on January 5, 2009, September 15, 2009 and January 31, 2010, the Board of Trustees approved the purchase of up to 300,000, 250,000 and 350,000, respectively, additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the Trusts’ equity compensation plans/programs. During the six months ended July 31, 2020, the Trust acquired 198,889 Shares of Beneficial Interest in open market transactions at an average price of $1.04 per share. The average price paid includes brokerage commissions. The Trust intends to continue repurchasing Shares of Beneficial Interest in compliance with applicable legal and NYSE AMERICAN requirements. The Trust remains authorized to repurchase an additional 746,060 Partnership units and/or Shares of Beneficial Interest pursuant to the publicly announced share repurchase program, which has no expiration date. On June 25, 2019, the Trust’s Board of Trustee’s authorized the repurchase of up to 750,000 shares and units in addition to the above amounts previously authorized.

	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans
February 1 - February 28, 2019		1,883	$	1.68		264,754		943,066
March 1 - March 31, 2019		7,762	$	1.22		256,992		935,304
April 1 - July 31, 2019		11,347	$	1.09		245,645		923,957
May 1 - May 31, 2019		15,783	$	1.09		229,862		908,174
June 1 - June 31, 2019		103,346	$	1.09		126,516		804,828
July 1 - July 31, 2020		58,768	$	1.09		67,748		746,060
Total		198,889

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.	Exhibit
31.1	Section 302 Certification by Chief Executive Officer
31.2	Section 302 Certification by Chief Financial Officer
32.1 *	Section 906 Certification of Principal Executive Officer and Principal Financial Officer
101	XBRL Exhibits
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Labels Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

+ Management contract or compensation plan or arrangement.

* Furnished, note filed.

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SIGNATURES

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

	INNSUITES HOSPITALITY TRUST
Date: March 01, 2021	/s/ James F. Wirth
	James F. Wirth
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
Date: March 01, 2021	/s/ Sylvin R. Lange
	Sylvin R. Lange
	Sylvin Lange, Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, James F. Wirth, certify that:

1. I have reviewed this quarterly report on Form 10-Q of InnSuites Hospitality 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 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 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 registrant’s board of directors (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.

Date: March 01, 2021
	/s/ James F. Wirth
	James F. Wirth
	Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL AND ACCOUNTING OFFICER

I, Sylvin R. Lange, certify that:

1. I have reviewed this quarterly report on Form 10-Q of InnSuites Hospitality 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 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 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 registrant’s board of directors (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.

Date: March 01, 2021
	/s/ Sylvin R. Lange
	Sylvin R. Lange
	Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

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 the filing of the Quarterly Report of InnSuites Hospitality Trust (the “Trust”) on Form 10-Q for the quarter ended July 31, 2020, as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), each of the undersigned officers of the Trust certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.

Date: March 01, 2021	/s/ James F. Wirth
	James F. Wirth
	Chairman and Chief Executive Officer
	/s/ Sylvin R. Lange
	Sylvin R. Lange
	Chief Financial Officer (Principal Financial and Accounting Officer)

A signed original of this written statement has been provided to the Trust and will be retained by the Trust and furnished to the SEC or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 31, 2020	Mar. 01, 2021
Cover [Abstract]
Entity Registrant Name	INNSUITES HOSPITALITY TRUST
Entity Central Index Key	0000082473
Document Type	10-Q
Document Period End Date	Jul. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--01-31
Entity Current Reporting Status	No
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,092,410
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021

XML

Condensed Consolidated Balance Sheets - USD ($)	Jul. 31, 2020	Jan. 31, 2020
Current Assets:
Cash and Cash Equivalents	$ 130,409	$ 1,200,528
Short-Term Investments - Available For Sale Securities	60
Accounts Receivable, including approximately $46,000 and $375,000 from related parties and net of Allowance for Doubtful Accounts of approximately $22,000 and $15,000 as of July 31, 2020 and January 31, 2020, respectively	60,702	585,226
Income Tax Receivable	294,402	294,402
Advances to Affiliates - Related Party	1,000,000	1,000,000
Current Portion of Note Receivable (net)		91,667
Prepaid Expenses and Other Current Assets	216,334	77,806
Total Current Assets	1,701,907	3,249,629
Property, Equipment, and Hotel Properties (net)	8,566,027	8,983,323
Note Receivable	1,925,500	1,833,333
Operating Lease - Right of Use	2,183,413	2,197,364
Finance Lease - Right of Use	90,183	131,806
Investments	1,000,000	600,000
TOTAL ASSETS	15,467,030	16,995,455
Current Liabilities:
Accounts Payable and Accrued Expenses	1,778,239	1,384,971
Current Portion of Notes Payable - Related Party		161,440
Current Portion of Mortgage Notes Payable, net of Discount	166,768	160,849
Current Portion of Notes Payable to Banks, net of Discount		17,100
Current Portion of Other Notes Payable	730,017	806,712
Current Portion of Operating Lease Liability	55,420	168,780
Current Portion of Finance Lease Liability	27,192	31,123
Total Current Liabilities	2,757,636	2,730,975
Mortgage Notes Payable, net of Discount	5,857,446	5,944,819
Other Notes Payable	531,277	73,491
Operating Lease Liability, net of current portion	2,341,097	2,252,964
Finance Lease Liability, net of current portion	66,216	75,396
TOTAL LIABILITIES	11,553,672	11,077,645
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Shares of Beneficial Interest, without par value, unlimited authorization; 18,626,215 and 18,607,960 shares issued and 9,092,410 and 9,273,299 shares outstanding at July 31, 2020 and January 31, 2020, respectively	20,959,227	21,837,048
Treasury Stock, 9,533,805 and 9,334,916 shares held at cost at July 31, 2020 and January 31, 2020, respectively	(13,896,872)	(13,689,533)
TOTAL TRUST SHAREHOLDERS' EQUITY	7,062,355	8,147,515
NON-CONTROLLING INTEREST	(3,148,997)	(2,229,705)
TOTAL EQUITY	3,913,358	5,917,810
TOTAL LIABILITIES AND EQUITY	$ 15,467,030	$ 16,995,455

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	6 Months Ended	12 Months Ended
	Jul. 31, 2020	Jan. 31, 2020
Statement of Financial Position [Abstract]
Accounts receivable from related parties	$ 46,000	$ 375,000
Allowance for doubtful accounts receivable	$ 22,000	$ 15,000
Shares of beneficial interest, without par value
Shares of beneficial interest, authorized shares	Unlimited	Unlimited
Shares of beneficial interest, shares issued	18,626,215	18,607,960
Shares of beneficial interest, shares outstanding	9,092,410	9,273,299
Treasury stock, shares held	9,533,805	9,334,916

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
REVENUE
TOTAL REVENUE	$ 924,720	$ 1,540,215	$ 2,370,798	$ 3,633,233
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	2,158,467	1,953,556	3,887,365	4,208,238
OPERATING LOSS	(1,233,747)	(413,341)	(1,516,567)	(575,005)
Interest Income	46,596	713	64,352	3,527
TOTAL OTHER INCOME	46,596	713	64,352	3,527
Interest on Mortgage Notes Payable	72,338	58,609	108,345	113,165
Interest on Notes Payable to Banks			103
Interest on Other Notes Payable	7,896	7,401	59,579	75,747
TOTAL INTEREST EXPENSE	80,234	66,010	168,027	188,912
CONSOLIDATED NET LOSS	(1,267,385)	(490,560)	(1,620,242)	(760,390)
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST	(602,466)	(14,631)	(813,451)	44,432
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS	$ (664,919)	$ (464,007)	$ (806,791)	$ (804,822)
NET LOSS PER SHARE TOTAL - BASIC & DILUTED	$ (0.14)	$ (0.05)	$ (0.18)	$ (0.08)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC & DILUTED	9,203,817	9,334,180	9,247,007	9,337,879
Room [Member]
REVENUE
TOTAL REVENUE	$ 846,289	$ 1,470,607	$ 2,128,038	$ 3,465,936
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	356,696	486,865	826,312	1,027,874
Food and Beverage [Member]
REVENUE
TOTAL REVENUE	17,801	14,547	32,978	32,407
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	30,878	23,306	63,246	47,308
Management and Trademark Fees [Member]
REVENUE
TOTAL REVENUE	32,050	35,004	75,248	98,516
Other [Member]
REVENUE
TOTAL REVENUE	28,580	20,057	134,534	36,374
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	3,306	3,998	5,408	8,873
Telecommunications [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	895	395	895	395
General and Administrative [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	340,287	654,155	917,761	1,502,906
Sales and Marketing [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	112,140	146,240	222,574	274,219
Repairs and Maintenance [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	86,606	102,529	175,413	202,332
Hospitality [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	25,838	131,262	94,707	270,962
Utilities [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	96,857	101,119	178,263	193,240
Depreciation [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	212,401	252,924	426,710	494,679
Real Estate and Personal Property Taxes, Insurance and Ground Rent [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	126,563	50,763	210,076	185,450
Sales and Occupancy Tax [Member]
OPERATING EXPENSES
TOTAL OPERATING EXPENSES	$ 766,000		$ 766,000

XML

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($)	Shares of Beneficial Interest [Member]	Treasury Stock [Member]	Trust Shareholders' Equity [Member]	Non-Controlling Interest [Member]	Total
Balance at Jan. 31, 2019	$ 23,738,260	$ (13,517,833)	$ 10,220,427	$ (1,471,912)	$ 8,748,515
Balance, shares at Jan. 31, 2019	9,360,292	9,229,923
Net (Loss) Income	$ (328,854)		(328,854)	59,024	(269,830)
Purchase of Treasury Stock		$ (58,096)	(58,096)		(58,096)
Purchase of Treasury Stock, shares	(32,732)	32,732
Shares of Beneficial Interest Issued for Services Rendered	$ 8,100		8,100		8,100
Shares of Beneficial Interest Issued for Services Rendered, shares	18,000
Distribution to Non-Controlling Interests				(139,679)	(139,679)
Balance at Apr. 30, 2019	$ 23,417,506	$ (13,575,929)	9,841,577	(1,552,567)	8,289,010
Balance, shares at Apr. 30, 2019	9,345,560	9,262,655
Balance at Jan. 31, 2019	$ 23,738,260	$ (13,517,833)	10,220,427	(1,471,912)	8,748,515
Balance, shares at Jan. 31, 2019	9,360,292	9,229,923
Net (Loss) Income					(760,390)
Balance at Jul. 31, 2019	$ 22,583,729	$ 13,627,314	9,226,415	(1,627,713)	7,598,702
Balance, shares at Jul. 31, 2019	9,313,150	9,289,026
Balance at Apr. 30, 2019	$ 23,417,506	$ (13,575,929)	9,841,577	(1,552,567)	8,289,010
Balance, shares at Apr. 30, 2019	9,345,560	9,262,655
Net (Loss) Income	$ (475,968)		(475,968)	(14,592)	(490,560)
Purchase of Treasury Stock		$ (51,385)	(51,385)		(51,385)
Purchase of Treasury Stock, shares	(32,410)	32,410
Shares of Beneficial Interest Issued for Services Rendered	$ 8,100		8,100		8,100
Shares of Beneficial Interest Issued for Services Rendered, shares
Distribution to Non-Controlling Interests				(60,554)	(60,554)
Dividends	(95,909)		(95,909)		(95,909)
Balance at Jul. 31, 2019	$ 22,583,729	$ 13,627,314	9,226,415	(1,627,713)	7,598,702
Balance, shares at Jul. 31, 2019	9,313,150	9,289,026
Balance at Jan. 31, 2020	$ 21,837,048	$ (13,689,533)	8,147,515	(2,229,705)	5,917,810
Balance, shares at Jan. 31, 2020	9,273,299	9,334,916
Net (Loss) Income	$ (141,872)		(141,872)	(210,985)	(352,857)
Purchase of Treasury Stock		$ (20,772)	(20,772)		(20,772)
Purchase of Treasury Stock, shares	(17,074)	17,074
Shares of Beneficial Interest Issued for Services Rendered	$ 8,100		8,100		8,100
Shares of Beneficial Interest Issued for Services Rendered, shares	18,000
Sales of Ownership Interests in Subsidiary, net				10,000	10,000
Distribution to Non-Controlling Interests				(105,347)	(105,347)
Reallocation of Non-Controlling Interests and Other	10,494		10,494	(10,494)
Balance at Apr. 30, 2020	$ 21,713,770	$ (13,710,305)	8,003,465	(2,546,531)	5,456,934
Balance, shares at Apr. 30, 2020	9,274,225	9,351,990
Balance at Jan. 31, 2020	$ 21,837,048	$ (13,689,533)	8,147,515	(2,229,705)	5,917,810
Balance, shares at Jan. 31, 2020	9,273,299	9,334,916
Net (Loss) Income					(1,620,242)
Balance at Jul. 31, 2020	$ 20,959,227	$ (13,896,872)	7,062,355	(3,148,997)	3,913,358
Balance, shares at Jul. 31, 2020	9,092,410	9,533,805
Balance at Apr. 30, 2020	$ 21,713,770	$ (13,710,305)	8,003,465	(2,546,531)	5,456,934
Balance, shares at Apr. 30, 2020	9,274,225	9,351,990
Net (Loss) Income	$ (664,919)		(664,919)	(602,466)	(1,267,385)
Purchase of Treasury Stock		$ (186,567)	(186,567)		(186,567)
Purchase of Treasury Stock, shares	(181,815)	181,815
Shares of Beneficial Interest Issued for Services Rendered	$ 6,300		6,300		6,300
Shares of Beneficial Interest Issued for Services Rendered, shares
Dividends	$ (95,924)		(95,924)		(95,924)
Balance at Jul. 31, 2020	$ 20,959,227	$ (13,896,872)	$ 7,062,355	$ (3,148,997)	$ 3,913,358
Balance, shares at Jul. 31, 2020	9,092,410	9,533,805

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated Net Loss	$ (1,620,242)	$ (760,390)
Adjustments to Reconcile Consolidated Net Loss to Net Cash Provided By (Used In) Operating Activities:
Stock-Based Compensation	14,400	16,200
Depreciation	426,710	494,679
Changes in Assets and Liabilities:
Accounts Receivable	524,024	(4,749)
Prepaid Expenses and Other Assets	(138,528)	20,707
Operating Lease	(11,276)
Finance Lease	28,512
Accounts Payable and Accrued Expenses	383,854	(644,356)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(392,546)	410,803
CASH FLOWS FROM INVESTING ACTIVITIES
Improvements and Additions to Hotel Properties		(190,530)
Payment on Investments in Unigen	(400,000)
Redemption (purchase) of Marketable Securities	(60)	410,247
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(400,060)	219,717
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Mortgage Notes Payable	(81,454)	(57,795)
Borrowings on Mortgage Notes Payable
Payments on Notes Payable to Banks, net of financing costs	(17,100)	(156,000)
Borrowings on Notes Payable to Banks, net of financing costs		146,700
Lendings on Notes Receivable - Related Party	(50,000)	(50,000)
Collections on Notes Receivable - Related Party	50,000	450,000
Payments on Notes Payable - Related Party	(161,440)	(158,773)
Payments on Other Notes Payable	(132,133)	(543,948)
Borrowings on Other Notes Payable	513,224	11,000
Payment of Dividends	(95,924)	(95,909)
Proceeds from Sale of Non-Controlling Ownership Interest in Subsidiary, net	10,000
Distributions to Non-Controlling Interest Holders	(105,347)	(200,233)
Repurchase of Treasury Stock	(207,339)	(109,481)
NET CASH USED IN FINANCING ACTIVITIES	(277,513)	(764,439)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,070,119)	(133,919)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,200,528	749,075
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 130,409	$ 615,156

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Nature of Operations and Basis of Presentation

6 Months Ended

Jul. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

As of July 31, 2020, InnSuites Hospitality Trust (the “Trust”, “IHT”, “we”, “us” or “our”) is a publicly traded unincorporated Ohio real estate investment trust (REIT) with two hotels IHT owns and three hotels IHT manages. The Trust and its shareholders directly in and through a Partnership, own interests in two hotels with an aggregate of 270 hotel suites in Arizona and New Mexico, both (the “Hotels”) operated under the federally trademarked name “InnSuites Hotels” or “InnSuites” as well as operating under the brand name “Best Western”. The Trust and its shareholders hold a $1 million 6% convertible debenture in UniGen Power Inc., (“UPI”), and hold warrants to make further UPI Investments in the future.

Hotel Operations:

Our Tucson, Arizona Hotel and our Hotel located in Albuquerque, New Mexico are limited service hotels. Both hotels offer swimming pools, fitness centers, business centers, and complimentary breakfast. In addition the Hotels offer social areas and modest conference facilities.

The Trust is the sole general partner of RRF Limited Partnership, a Delaware limited partnership (the “Partnership”), and owned a 75.89% interest in the Partnership as of July 31, 2020 and January 31, 2020, respectively. The Trust’s weighted average ownership for the six months ended July 31, 2020 and 2019 was 75.89%. As of July 31, 2020, the Partnership owned a 51.01% interest in an InnSuites® hotel located in Tucson, Arizona. The Trust owns a direct 20.17% interest in an InnSuites® hotel located in Albuquerque, New Mexico.

InnSuites Hotels Inc.(“IHI”), a subsidiary, manages the Hotels’ daily operations under 3 management agreements. The Trust also provides the use of the “InnSuites” trademark to the Hotels through wholly-owned IHI. All expenses and reimbursements between the Trust, IHI and the Partnership have been eliminated in consolidation.

The Trust classified the Hotels as operating assets, but these assets are available for sale. At this time, the Trust is unable to predict when, and if, any of these will be sold. Neither the Tucson Hotel nor the Albuquerque Hotel is currently listed but the Trust is willing to consider offers for the Hotel. Each of the Hotels is being marketed at a price that management believes is reasonable in relation to its current fair value.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

These unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles in conformity with accounting principles generally accepted in the United States of America (“GAAP”), and include all assets, liabilities, revenues and expenses of the Trust and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated. Certain items have been reclassified to conform to the current fiscal year presentation. The Trust exercises unilateral control over the Partnership and the entities listed below. Therefore, the unaudited condensed financial statements of the Partnership and the entities listed below are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

	IHT OWNERSHIP %
ENTITY	DIRECT			INDIRECT (i)
Albuquerque Suite Hospitality, LLC		20.17	%		-
Tucson Hospitality Properties, LLLP		-			51.01	%
RRF Limited Partnership		75.89	%		-
InnSuites Hotels Inc.		100.00	%		-

(i) Indirect ownership is through the Partnership

PARTNERSHIP AGREEMENT

The Partnership Agreement of the Partnership provides for the issuance of two classes of Limited Partnership units, Class A and Class B. Class A and Class B Partnership units are identical in all respects, except that each Class A Partnership unit is convertible into one newly-issued Share of Beneficial Interest of the Trust at any time at the option of the limited partner holding the units. The Class B Partnership units may only become convertible, each into one newly issued Share of Beneficial Interest of the Trust, with the approval of the Board of Trustees, in its sole discretion. On July 31, 2020 and January 31, 2020, 211,708 Class A Partnership units were issued and outstanding, representing 1.60% of the total Partnership units, respectively. Additionally, as of July 31, 2020 and January 31, 2020, 2,974,038 Class B Partnership units were outstanding to and owned by James Wirth, the Trust’s Chairman and Chief Executive Officer, and Mr. Wirth’s affiliates. If all the Class A and B Partnership units were converted on July 31, 2020 and January 31, 2020, the limited partners in the Partnership would receive 3,185,746 Shares of Beneficial Interest of the Trust. As of July 31, 2020, and January 31, 2020, the Trust owns 10,025,771 general partner units in the Partnership, representing 75.89% and 75.89% of the total Partnership units, respectively.

LIQUIDITY

The Trust’s principal source of cash to meet its cash requirements, including distributions to its shareholders, is our share of the Partnership quarterly distributions coming from the Tucson Hotel as well as cash flow; quarterly distributions and cash flow from the Albuquerque, New Mexico property, management fees charged to Trust and Affiliate hotels, repayments of intercompany loans for the Tucson and Albuquerque Hotels and more recently, sales and/or refinance of certain hotels. The Partnership’s principal source of cash flow is quarterly distributions from the Tucson, Arizona property. The Trust’s liquidity, including our ability to make distributions to its shareholders, will depend upon the ability of the Trust and the Partnership’s ability to generate sufficient cash flow from hotel operations and to service debt, as well as to generate funds from repayment of loans and sale of assets. The Covid-19 Virus (the “Virus”) has disrupted the quarterly distributions from both the Albuquerque and Tucson hotels. Another principal source of cash is derived from the management fees of the Albuquerque, Tucson, and Tempe Hotels.

At a future date, the Trust may receive cash from the operations and/or full or partial sale of its Unigen diversification investment.

As of July 31, 2020, the Trust had a related party Demand/Revolving Line of Credit/Promissory Note with an amount receivable of approximately $0. The Demand/Revolving Line of Credit/Promissory Note accrues interest at 7.0% per annum and requires interest only payments. The Demand/Revolving Line of Credit/Promissory Note has a maximum borrowing capacity to $1,000,000, which is available through December 31, 2021, and renews annually. As of July 31, 2020, the outstanding net balance receivable on the Demand/Revolving Line of Credit/Promissory Note was $0.

As of July 31, 2020, the Trust had Advance to Affiliate credit facilities with an aggregate maximum borrowing capacity of $1,000,000, which is available through December 31, 2021, and renews annually. As of July 31, 2020, the Trust had an amount receivable of the Advances to Affiliate credit facility of approximately $1,000,000.

As of July 31, 2020, the Trust had a Revolving line of Credit of $150,000 with the Republic Bank of Arizona. The line had a zero balance as of July 31, 2020.

The Trust is owed approximately $3.6 million intercompany loan from the Tucson Hotel. The Trust plans within the next year to prepare to be in a position to seek refinancing the Tucson Hotel property, which would facilitate repayment of up to $3.5 million of the Tucson Hotel loan. We anticipate this refinance may be completed in the third quarter of Fiscal 2022.

With approximately $130,000 of cash and short term investments, as of July 31, 2020, the availability of a $1,000,000 related party Demand/Revolving Line of Credit/Promissory Note, the availability of the combined $1,000,000 Advance to Affiliate credit facilities, and the $150,000 Revolving Line of Credit with Republic Bank, the Trust believes that it has and will have enough cash on hand to meet all of the financial obligations as they become due for twelve months from the date of filing this 10-Q. In addition, management is analyzing other strategic options available to the Trust, including the sale or refinance of one or both Hotel properties. However, such transactions may not be available on terms that are favorable to the Trust, or at all.

There can be no assurance that the Trust will be successful selling properties, refinancing debt or raising additional or replacement funds, or that these funds may be available on terms that are favorable to it. If the Trust is unable to raise additional or replacement funds, it may be required to sell certain of our assets to meet liquidity needs, which may not be on terms that are favorable.

TEMPE HOTEL SUBSEQUENT EVENT 

Subsequent to year end, an affiliate of the Trust sold the Tempe Hotel on December 18, 2020. At that time, the Trust received in the Fourth Fiscal quarter the full repayment of the approximately $1 million intercompany loan to Tempe. In addition, Rare Earth Financial (“REF”), an Affiliated Member of the Tempe Hotel at that time repaid approximately $800,000 intercompany loan to the Trust, in the Fourth Fiscal quarter of 2020.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the Trust in accordance with Generally Accepted Accounting Principles (“GAAP”), for interim financial information, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statement presentation. However, the Trust believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the six months ended July 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended January 31, 2020.

The Trust has evaluated subsequent events through the date of the filing of its Form 10-Q with the Securities and Exchange Commission. Other than those events disclosed, the Trust is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Trust’s financial statements.

As sole general partner of the Partnership, the Trust exercises unilateral control over the Partnership, and the Trust owns all of the issued and outstanding classes of shares of InnSuites Hotels Inc. Therefore, the financial statements of the Partnership and InnSuites Hotels Inc. are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

Under Accounting Standards Codification (“ASC”) Topic 810-10-25, Albuquerque Suite Hospitality, LLC has been determined to be a variable interest entity with the Trust as the primary beneficiary (see Note 4 – “Variable Interest Entity”). Therefore, the financial statements of Albuquerque Suite Hospitality, LLC, are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

The financial statements of the Partnership and Tucson Hospitality Properties, LLLP are consolidated with the Partnership and the Trust, and all significant intercompany transactions and balances have been eliminated.

SEASONALITY OF THE HOTEL BUSINESS

The Hotels’ operations historically have been somewhat seasonal. The Tucson Arizona Hotel experiences the highest occupancy in the first fiscal quarter (the winter season) and, to a lesser extent, the fourth fiscal quarter. The second fiscal quarter tends to be the lowest occupancy period at this Arizona Hotel. This seasonality pattern can be expected to cause fluctuations in the Trust’s quarterly revenues. The Hotel located in Albuquerque, New Mexico historically experience their most profitable periods during the second and third fiscal quarters (the summer season), providing some balance to the general seasonality of the Trust’s hotel business.

The seasonal nature of the Trust’s business increases its vulnerability to risks such as travel disruptions, labor force shortages and cash flow issues. Further, if an adverse event such as an actual or threatened virus pandemic, terrorist attack, international conflict, data breach, regional economic downturn or poor weather should occur at either of its two hotels, the adverse impact to the Trust’s revenues and profit could be significant.

RECENTLY ISSUED ACCOUNTING GUIDANCE

The Trust adopted ASU No. 2016-02 as of February 1, 2019, using the modified retrospective approach wherein entities were allowed to initially apply the new leases standard at adoption date which had no effect to the opening balance of retained earnings in the period of adoption. Accordingly, all periods prior to February 1, 2019 were presented in accordance with the previous ASC Topic 840, Leases, and no retrospective adjustments were made to the comparative periods presented.

The Trust elected the package of practical expedients permitted under the new standard which, among other things, allowed the Trust to not reassess the lease classification, the lease identification, and the initial direct costs for any existing leases. Further, as permitted by the standard, the Trust made an accounting policy election not to record ROU assets or lease liabilities for leases with a term of 12 months or less. Instead, consistent with legacy accounting guidance, the Trust will recognize payments for such leases in the condensed consolidated statement of operations on a straight-line basis over the lease term. With adoption on February 1, 2019, this standard resulted in the recognition of additional assets of $2,821,410 and liabilities of $2,913,568 upon adoption on its accompanying condensed consolidated balance sheet. The new standard did not have a material impact on the Trust’s results of operations or cash flows.

In June 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this ASU became effective for us beginning February 1, 2019, and early adoption is permitted. The Trust has adopted this ASU which did not have a material effect on the unaudited condensed consolidated financial statements.

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Summary of Significant Accounting Policies

6 Months Ended

Jul. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Trust’s operations are affected by numerous factors, including the economy, virus/pandemic, competition in the hotel industry and the effect of the economy on the travel and hospitality industries. The Trust cannot predict if any of the above items will have a significant impact in the future, nor can it predict what impact, if any, the occurrence of these or other events might have on the Trust’s operations and cash flows. Significant estimates and assumptions made by management include, but are not limited to, the estimated useful lives of long-lived assets and recoverability of long-lived assets and the fair values of the long-lived assets.

PROPERTY, EQUIPMENT, AND HOTEL PROPERTIES

Furniture, fixtures, building and improvements and hotel properties are stated at cost, except for land, and depreciated using the straight-line method over estimated lives ranging up to 40 years for buildings and improvements, and 3 to 10 years for furniture, fixtures and equipment.

Land is an indefinite-lived asset. The Trust tests its land for impairment annually, or whenever events or changes in circumstances indicates an impairment may have occurred, by comparing its carrying value to its implied fair value.

For tax purposes the Trust may take advantage of accelerated depreciation methods (MACRS) for new capital additions and improvements to its Hotels.

Management applies guidance ASC 360-10-35, to determine when it is required to test an asset for recoverability of its carrying value and whether, or not, an impairment exists. Under ASC 360-10-35, the Trust is required to test a long-lived asset for impairment when there is an indicator of impairment. Impairment indicators may include, but are not limited to, a drop in the performance of a long-lived asset, a decline in the hospitality industry or a decline in the economy. If an indicator of potential impairment is present, then an assessment is performed of whether the carrying amount of an asset exceeds its estimated undiscounted future cash flows over its estimated remaining life.

If the estimated undiscounted future cash flows over the asset’s estimated remaining life are greater than the asset’s carrying value, no impairment is recognized; however, if the carrying value of the asset exceeds the estimated undiscounted future cash flows, then the Trust would recognize an impairment expense to the extent the asset’s carrying value exceeds its fair value, if any. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are analyzed on a property-specific basis independent of the cash flows of other groups of assets. Evaluation of future cash flows is based on historical experience and other factors, including certain economic conditions, and committed future bookings.

CASH AND CASH EQUIVALENTS

The Trust considers all highly liquid short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. The Trust believes it places its cash and cash equivalents only with high credit quality financial institutions, although these balances may periodically exceed federally insured limits.

SHORT-TERM INVESTMENTS – AVAILABLE FOR SALE SECURITIES

The Trust currently owns a liquid investment account with Charles Schwab. The Trust believes it places its investments only with high credit quality financial institutions.

REVENUE RECOGNITION

Hotel and Operations

ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers” is effective for reporting periods beginning after December 15, 2017. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations.

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. Revenues are recorded when rooms are occupied and when food and beverage sales are delivered. Management and trademark fees from non-affiliated hotels include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels and the one hotel owned by affiliates of Mr. Wirth.

Each room night consumed by a guest with a cancellable 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 room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Trust has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Trust recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Trust uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.

In evaluating its performance obligation, the Trust bundles the obligation to provide the guest the room itself with other obligations (such as free Wi-Fi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Trust’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Trust has no performance obligations once a guest’s stay is complete.

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

ACCOUNTS RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are derived from guest stays and other reservations at the Hotels. Accounts receivable are carried at original amounts billed less an estimate made for doubtful accounts based on a review of outstanding amounts on a quarterly basis. Management generally records an allowance for doubtful accounts for 50% of balances over 90 days due and 100% of balances over 120 days due. Accounts receivable are written off when collection efforts have been exhausted and they are deemed uncollectible. Recoveries, if any, of receivables previously written off are recorded when received. The Trust does not charge interest on accounts receivable balances and these receivables are unsecured. The following is a reconciliation of the allowance for doubtful accounts for the fiscal period ended July 31, 2020 and the fiscal year ended January 31, 2020.

Fiscal Year	Balance at the Beginning of Period			Discontinued Operations Adjustment		Charged to Expense			Deductions		Balance at the End of Period
July 31, 2020	$	(14,789	)	$	-	$	(6,933	)	$	-	$	(21,722	)
January 31, 2020	$	(5,943	)	$	-	$	(13,223	)	$	4,377	$	(14,789	)

INCOME TAX RECEIVABLE

The Trust amended its corporate tax returns for the previous year ended January 31, 2019. Such amendments resulted in a refund of approximately $294,000, which the Trust expects to receive by July 31, 2021.

LEASE ACCOUNTING

The Trust determines, at the inception of a contract, if the arrangement is a lease and whether it meets the classification criteria for a finance or operating lease. ROU assets represent the Trust’s right to use an underlying asset during the lease term and lease liabilities represent the Trust’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also include any advance lease payments and exclude lease incentives. As most of the Trust’s operating leases do not provide an implicit rate, the Trust uses its incremental borrowing rate based on information available at commencement date in determining the present value of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term (see Note 14).

TRUSTEE STOCK-BASED COMPENSATION

The Trust has an employee equity incentive plan, which is described more fully in Note 15 - “Share-Based Payments.” The three independent members of the Board of Trustees earn 6,000 IHT Shares per year. The Trust has paid the annual fees due to its Trustees by issuing Shares of Beneficial Interest out of its authorized but unissued Shares. Upon issuance, the Trust recognizes the shares as outstanding. The Trust recognizes expense related to the issuance based on the fair value of the shares upon the date of the restricted share grant and amortizes the expense equally over the period during which the shares vest to the Trustees.

During the six months ended July 31, 2020, the Trust granted restricted stock awards of 18,000 Shares to three independent members of the Board of Trustees, resulting in stock-based compensation of $14,400. The shares vest over one year, through the end of fiscal year ended January 31, 2021 monthly at a rate of approximately 500 shares for each outside Trustee or a total of 1,500 per month for three independent Trustees.

TREASURY STOCK

Treasury stock is carried at cost, including any brokerage commissions paid to repurchase the shares. Any shares issued from treasury stock are removed at cost, with the difference between cost and fair value at the time of issuance recorded against Shares of Beneficial Interest.

NET LOSS PER SHARE

Basic and diluted net loss per Share of Beneficial Interest is computed based on the weighted-average number of Shares of Beneficial Interest and potentially dilutive securities outstanding during the period. Dilutive securities are limited to the Class A and Class B units of the Partnership, which are convertible into 3,185,746 Shares of the Beneficial Interest, as discussed in Note 1.

For the six months ended July 31, 2020 and 2019, there were Class A and Class B Partnership units outstanding, which are convertible into Shares of Beneficial Interest of the Trust. Assuming conversion at the beginning of each period, the aggregate weighted-average of these Shares of Beneficial Interest would have been 3,185,746 and 3,185,746 in addition to the basic shares outstanding for the six months ended July 31, 2020 and 2019, respectively. These Shares of Beneficial Interest issuable upon conversion of the Class A and Class B Partnership units were anti-dilutive during the six months ended July 31, 2020 and 2019 and are excluded in the calculation of diluted earnings per share for those periods.

ADVERTISING COSTS

Amounts incurred for advertising costs are expensed as incurred. Advertising expense for operations totaled approximately $56,000 and $42,000 for the three months ended July 31, 2020 and 2019 respectively, and $116,000 and $84,000 for the six months ended July 31, 2020 and 2019, respectively.

CONCENTRATION OF CREDIT RISK

Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Trust to a concentration of credit risk consist primarily of cash and cash equivalents. Management’s assessment of the Trust’s credit risk for cash and cash equivalents is low as cash and cash equivalents are held in financial institutions believed to be credit worthy.

The Trust limits its exposure to credit loss by placing its cash with major financial institutions and invests only in short-term obligations.

While the Trust is exposed to credit losses due to the non-performance of its counterparties, the Trust considers the risk of this remote.

The Trust estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For disclosure purposes, fair value is determined by using available market information and appropriate valuation methodologies. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. The fair value framework specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The fair value hierarchy levels are as follows:

● Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

● Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and / or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are level 2 valuation techniques.

● Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect a company’s own judgments about the assumptions that market participants would use in pricing an asset or liability.

The Trust has assets that are carried at fair value on a recurring basis, including warrants in a 3^rd party private company recorded in investments on the unaudited consolidated balance sheet.

Due to their short maturities, the carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value. The fair value of mortgage notes payable, notes payable to banks and notes and advances payable to related parties is estimated by using the current rates which would be available for similar loans having the same remaining maturities and are based on level 3 inputs.

INVESTMENT IN UNIGEN POWER, INC.

On December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UPI” or “UniGen”).

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%. The Debentures are convertible into Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share. The Loan is structured into two (2) payments of $600,000 and $400,000. The first payment of $600,000 was made by the Trust at closing on December 16, 2020 and the second payment of $400,000 was made on February 3, 2020.

UniGen issued the Trust common stock purchase warrants (the “Debenture Warrants”) to purchase up to 1,000,000 shares of Class A Common Stock (600,000 issued on January 31, 2020, and 400,000 issued on February 3, 2020). 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 200,000 shares of Class A Common Stock (120,000 issued at January 31, 2020, and 80,000 issued on February 3, 2020). The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.

On the Trust’s balance sheet, the investment of the $1,000,000 made in the current fiscal year consists of approximately $424,000 in note receivables and approximately $576,000 as the fair value of the warrant issued with the Trust’s investment in UniGen. The value of the premium related to the fair value of the warrants will accrete over the life of the debentures.

The value of the warrants was based on Black-Scholes pricing model based on the following inputs:

Debenture Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	1.00
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

Additional Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	2.25
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

UNIGEN SUBSEQUENT EVENT

UniGen has also agreed to allow IHT to fund a $500,000 line of credit at the option of IHT convertible into 500,000 shares of UniGen stock at $1 per share. And upon full subscription of the UniGen $2 million subscription grant IHT an additional 300,000 warrants at $2.25 per share. If all notes are converted and all warrants exercised, IHT would hold 3 million UniGen shares out of a total of approximately 12 million UniGen shares resulting in IHT owning approximately 25% of UniGen. Subsequent to July 31, 2020, no activity has occurred with this line of credit and thus no draws have been taken. 

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Sale of Ownership Interests in Subsidiaries

6 Months Ended

Jul. 31, 2020

Notes Payables - IHT Shares of Beneficial Interest and Partnership Units repurchases

Sale of Ownership Interests in Subsidiaries

3. SALE OF OWNERSHIP INTERESTS IN SUBSIDIARIES

The Trust has sold non-controlling interests in certain subsidiaries, including Albuquerque Suite Hospitality, LLC (the “Albuquerque entity”) and Tucson Hospitality Properties, LLLP (the “Tucson entity, which sales are described in detail in our Annual Report on Form 10-K filed on August 14, 2020 with the Securities and Exchange Commissions. Generally, interests have sold for $10,000 per unit with a two-unit minimum subscription. The Trust maintains at least 50.1% of the units in one of the entities and intends to maintain this minimum ownership percentage. Generally, the units in the each of the entities are allocated to three classes with differing cumulative discretionary priority distribution rights through a certain time period. Class A units are owned by unrelated third parties and have priority for distributions. Class B units are owned by the Trust and have second priority for distributions. Class C units are owned by Rare Earth or other affiliates of Mr. Wirth and have the lowest priority for distributions. Priority distributions of $700 per unit per year are cumulative until a certain date; however, after that date, generally Class A unit holders continue to hold a preference on distributions over Class B and Class C unit holders. The Trust does not accrue for these distributions as the preference periods have expired.

On February 15, 2017, the Trust and Partnership entered into a restructuring agreement with Rare Earth Financial, LLC (“REF”) to allow for the sale of non-controlling partnership units in Albuquerque Suite Hospitality LLC (“Albuquerque”) for $10,000 per unit, which operates the Best Western InnSuites Albuquerque Hotel and Suites Airport hotel property, a 112 unit hotel in Albuquerque, New Mexico (the “Property”). REF and IHT restructured the Albuquerque Membership Interest by creating 250 additional Class A membership interests from General Member majority-owned to accredited investor member-owned. In the event of sale of 250 Class A Interests, total interests outstanding will change from 550 to 600 with Class A, Class B and Class C Limited Liability Company Interests (referred to collectively as “Interests”) restructured with IHT selling approximately 200 Class B Interests to accredited investors as Class A Interest. REF, as a General Partner of Albuquerque, will coordinate the offering and sale of Class A Interests to qualified third parties. REF and other REF Affiliates may purchase Interests under the offering. This restructuring is part of the Trust’s Equity Enhancement Plan to comply with Section 1003(a)(iii) of the NYSE American Company Guide.

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Variable Interest Entities

6 Months Ended

Jul. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

4. VARIABLE INTEREST ENTITIES

Management evaluates the Trust’s explicit and implicit variable interests to determine if they have any interests in variable interest entities (“VIEs”). Variable interests are contractual, ownership, or other pecuniary interests in an entity whose value changes with changes in the fair value of the entity’s net assets, exclusive of variable interests. Explicit variable interests are those which directly absorb the variability of a VIE and can include contractual interests such as loans or guarantees as well as equity investments. An implicit variable interest acts the same as an explicit variable interest except it involves the absorbing of variability indirectly, such as through related party arrangements or implicit guarantees. The analysis includes consideration of the design of the entity, its organizational structure, including decision making ability over the activities that most significantly impact the VIE’s economic performance. GAAP requires a reporting entity to consolidate a VIE when the reporting entity has a variable interest, or combination of variable interest, that provides it with a controlling financial interest in the VIE. The entity that consolidates a VIE is referred to as the primary beneficiary of that VIE.

The Partnership has determined that the Albuquerque entity is a variable interest entity with the Partnership as the primary beneficiary with the ability to exercise control, as determined under the guidance of ASC Topic 810-10-25. In its determination, management considered the following qualitative and quantitative factors:

a) The Partnership, Trust, and their related parties, which share common ownership and management, have guaranteed material financial obligations of the Albuquerque hotel.

b) The Partnership, Trust and their related parties have maintained, as a group, a controlling ownership interest in the Albuquerque hotel, with the largest ownership belonging to the Trust.

c) The Partnership, Trust and their related parties have maintained control over the decisions which most impact the financial performance of the Albuquerque hotel, including providing the personnel to operate the property daily.

During the six months ended July 31, 2020 and the fiscal year ended January 31, 2020, neither the Trust nor the Partnership have provided any implicit or explicit financial support for which they were not previously contracted. Both the Partnership and the Trust provided mortgage loan guarantees which allow our properties to obtain new financing as needed.

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Property, Equipment, and Hotel Properties

6 Months Ended

Jul. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Equipment, and Hotel Properties

5. PROPERTY, EQUIPMENT, AND HOTEL PROPERTIES

As of July 31, 2020 and January 31, 2020, hotel properties consisted of the following:

	July 31, 2020			January 31, 2020
Land	$	2,500,000		$	2,500,000
Building and improvements		10,515,156			10,495,465
Furniture, fixtures and equipment		4,047,444			4,021,890
Total hotel properties		17,062,600			17,017,355
Less accumulated depreciation		(8,569,683	)		(8,155,224	)
Hotel Properties in Service, net		8,492,918			8,862,131
Construction in progress		0			40,965
Hotel properties, net	$	8,492,918		$	8,903,096

As of July 31, 2020 and January 31, 2020, corporate property and equipment consisted of the following:

	July 31, 2020			January 31, 2020
Land	$	7,005		$	7,005
Building and improvements		75,662			75,662
Furniture, fixtures and equipment		166,121			160,987
Total property, plant and equipment		248,788			243,654
Less accumulated depreciation		(175,679	)		(163,427	)
Property, Plant and Equipment, net	$	73,109		$	80,227

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Mortgage Notes Payable

6 Months Ended

Jul. 31, 2020

Debt Disclosure [Abstract]

Mortgage Notes Payable

6. MORTGAGE NOTES PAYABLE

On July 31, 2020 and January 31, 2020, the Trust had a mortgage note payable outstanding with respect to the Tucson Hotel. The mortgage note payable has a scheduled maturity date in June 2042. Weighted average annual interest rates on mortgage notes payable as of July 31, 2020 and January 31, 2020 were 4.69%, respectively.

The mortgage note payable reflects a $5.0 million Business Loan Agreement (“Tucson Loan”) as a first mortgage credit facility with KS State Bank, entered into on June 29, 2017, to refinance the existing first mortgage credit facility with an approximate payoff balance of $3.045 million. The loan will allow Tucson Hospitality Properties, LLLP funds for prior and future hotel improvements. The Tucson Loan has a maturity date of June 19, 2042 and has an initial interest rate of 4.69% for the first five years and thereafter a variable rate equal to the US Treasury + 2.0% with a floor of 4.69% and no prepayment penalty. This credit facility is guaranteed by InnSuites Hospitality Trust, RRF Limited Partnership, Rare Earth Financial, LLC, James F. Wirth and Gail J. Wirth and the Wirth Family Trust dated July 14, 2016.

As of July 31, 2020, and January 31, 2020, the mortgage loan balance was approximately $4,648,000 and $4,709,000, respectively, net of a discount of approximately $5,000. The mortgage note payable is due in monthly installments of $28,493.

In addition, the Albuquerque hotel has a loan of approximately $1.4 million with a weighted average interest rate of 4.9%.

See Note 9 – “Minimum Debt Payments” for scheduled minimum payments on the mortgage notes payable.

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Notes Payable and Notes Receivable - Related Party

6 Months Ended

Jul. 31, 2020

Notes Payable And Notes Receivable - Related Party

Notes Payable and Notes Receivable - Related Party

7. NOTES PAYABLE AND NOTES RECEIVABLE – RELATED PARTY

On December 1, 2014, the Trust entered a Demand/Revolving Line of Credit/Promissory Note with Rare Earth Financial, LLC, an entity which is wholly owned by Mr. Wirth and his family members. The Demand/Revolving Line of Credit/Promissory Note, as amended on June 19, 2017, bears interest at 7.0% per annum for both a payable and receivable, is interest only quarterly matures on August 24, 2021, and renews annually each calendar year. No prepayment penalty exists on the Demand/Revolving Line of Credit/Promissory Note. The balance fluctuates significantly through the period. The Demand/Revolving Line of Credit/Promissory Note has a net maximum borrowing/lending capacity of $1,000,000. As of July 31, 2020, and January 31, 2020, the Trust had an amount receivable of approximately $0. During the three months ended July 31, 2020 and 2019, the Trust accrued approximately $0 and $3,632, respectively, of interest income.

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Other Notes Payable

6 Months Ended

Jul. 31, 2020

Debt Disclosure [Abstract]

Other Notes Payable

8. OTHER NOTES PAYABLE

As of July 31, 2020, the Trust had approximately $188,000 in promissory notes outstanding to unrelated third parties arising from the repurchase of 57,732 Class A Partnership units in privately negotiated transactions, the repurchase of 273,898 Shares of Beneficial Interest in privately negotiated transactions, and the repurchase of 1 Class A interest in Albuquerque Suite Hospitality, LLC in privately negotiated transactions. These promissory notes bear interest at 7% per year and are due in varying monthly payments through January 2023.

As of July 31, 2020, the Trust had a $200,000 unsecured note payable with an individual lender. The promissory note is payable on demand, or on June 30, 2021, whichever occurs first. The loan accrues interest at 4.0% and interest only payments shall be made monthly and are due on the first of the following month. The Trust may pay all of part of this note without any repayment penalties. The total principal amount of this loan is $200,000 as of July 31, 2020.

On June 20, 2016, the Trust and the Partnership together entered multiple unsecured loans totaling $270,000 with Guy C. Hayden III (“Hayden Loans”). As of July 1, 2019, these loans were consolidated and extended at 4.5% interest only, with similar terms to June 30, 2021. The Trust may pay all or part of this note without any repayment penalties. The total principal amount of the Hayden Loans is $270,000 as of July 31, 2020.

On March 20, 2017, the Trust and Partnership entered multiple, unsecured loans to Lisa Sweitzer Hayes (“Sweitzer Loans”), totaling $100,000. As of July 1, 2019, these loans were consolidated and extended at 4.0% interest only, with similar terms to June 30, 2021. The total principal amount of the Sweitzer Loans is $100,000 as of July 31, 2020.

As a result of the Covid-19 Virus Pandemic, and the subsequent Legislation passed within the CARES Act of 2020, the Trust applied for and received Small Business Administration (“SBA”) loans through the Paycheck Protection Program (“PPP”). Loans in the amount of $228,602, $187,685, and $86,700, for Tucson, Albuquerque, InnSuites Hospitality, respectively, were granted and received. The lender of all three of the aforementioned PPP Loans has confirmed that all three loans have met all of the requirements necessary to qualify and be eligible for full and complete forgiveness in early 2021, based upon the SBA criteria for PPP loan forgiveness, subject to and pending the forgiveness application. However, to date these loans have not yet been forgiven.

See Note 9 – “Minimum Debt Payments” for scheduled minimum payments on the debt liabilities.

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Minimum Debt Payments

6 Months Ended

Jul. 31, 2020

Debt Disclosure [Abstract]

Minimum Debt Payments

9. MINIMUM DEBT PAYMENTS

Scheduled minimum payments of debt, net of debt discounts, as of July 31, 2020 are approximately as follows in the respective fiscal years indicated:

FISCAL YEAR	MORTGAGES		OTHER NOTES PAYABLE		TOTAL
2021	$	81,204	$	686,028	$	767,232
2022		170,856		560,001		730,857
2023		176,852		15,265		192,117
2024		219,151				219,151
2025		192,828				192,828
2026		203,490				203,490
Thereafter		4,979,833				4,979,833
	$	6,024,214	$	1,261,294	$	7,285,508

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Description of Beneficial Interests

6 Months Ended

Jul. 31, 2020

Description Of Beneficial Interests

Description of Beneficial Interests

10. DESCRIPTION OF BENEFICIAL INTERESTS

Holders of the Trust’s Shares of Beneficial Interest are entitled to receive dividends when and if declared by the Board of Trustees of the Trust out of funds legally available. The holders of Shares of Beneficial Interest, upon any liquidation, dissolution or winding-down of the Trust, are entitled to share ratably in any assets remaining after payment in full of all liabilities of the Trust. The Shares of Beneficial Interest possess ordinary voting rights, each share entitling the holder thereof to one vote. Holders of Shares of Beneficial Interest do not have cumulative voting rights in the election of Trustees and do not have preemptive rights.

On January 2, 2001, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 250,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. On September 10, 2002, August 18, 2005 and September 10, 2007, the Board of Trustees approved the purchase of up to 350,000 additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Additionally, on January 5, 2009, September 15, 2009 and January 31, 2010, the Board of Trustees approved the purchase of up to 300,000, 250,000 and 350,000, respectively, of additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the Trust’s equity compensation plans/programs. Additionally, on June 19, 2017, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 750,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the InnSuites Hospitality Trust 1997 Stock Incentive and Option Plan.

For the six months ended July 31, 2020 and 2019, the Trust repurchased 198,889 and 65,142 Shares of Beneficial Interest at an average price of $1.04 and $1.68 per share, respectively. The average price paid includes brokerage commissions. The Trust intends to continue repurchasing Shares of Beneficial Interest in compliance with applicable legal and NYSE AMERICAN requirements. The Trust remains authorized to repurchase an additional 746,060 Partnership units and/or Shares of Beneficial Interest pursuant to the publicly announced share repurchase program, which has no expiration date. Repurchased Shares of Beneficial Interest are accounted for as treasury stock in the Trust’s Consolidated Statements of Shareholders’ Equity.

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Related Party Transactions

6 Months Ended

Jul. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

11. RELATED PARTY TRANSACTIONS

As of July 31, 2020 and January 31, 2020, Mr. Wirth and his affiliates held 2,974,038 Class B Partnership units, which represented 22.51% of the total outstanding Partnership units, respectively. As of July 31, 2020 and January 31, 2020, Mr. Wirth and his affiliates held 5,876,683 and 5,881,683 Shares of Beneficial Interest in the Trust, respectively, which represented 64.63% and 62.93% respectively, of the total issued and outstanding Shares of Beneficial Interest.

As of July 31, 2020 and January 31, 2020, the Trust owned 75.89% of the Partnership, respectively. As of July 31, 2020, the Partnership owned a 51.01% interest in the InnSuites® hotel located in Tucson. The Trust also owned a direct 20.17% interest in one InnSuites® hotel located in Albuquerque, New Mexico.

The Trust directly manages the Hotels through the Trust’s wholly-owned subsidiary, InnSuites Hotels Inc. Under the management agreements, InnSuites Hotels Inc. manages the daily operations of the two Hotels and the hotel owned by affiliates of Mr. Wirth. (This hotel, located in Tempe, Arizona, was sold December 18, 2020). Revenues and reimbursements among the Trust, InnSuites Hotels Inc. and the Partnership have been eliminated in consolidation. The management fees for the Hotels and the hotel owned by affiliates of Mr. Wirth are set at 5.0% of room revenue and a monthly accounting fee of $2,000 per hotel. These agreements have no expiration date and may be cancelled by either party with 90-days written notice or 30-days written notice in the event the property changes ownership. For the six months ended July 31, 2020, the Trust recognized approximately $75,000 of revenue.

The Trust employs an immediate family member of Mr. Wirth, Brian James Wirth, who provides technology support services to the Trust, receiving a $36,000 annual salary.

On December 22, 2015, the Trust provided Advances to Affiliate – Related Party in the amount of $500,000 to Tempe/Phoenix Airport Resort LLC. Mr. Wirth, individually and thru one of his affiliates owns approximately 42% Tempe/Phoenix Airport Resort LLC. The note was amended on June 17, 2017 to increase the amount to $1,000.000 and extend the due date. The note has a due date of December 31, 2021, renews annually, and accrues interest of 7.0%. During the six months ended July 31, 2020 and 2019, the Trust received $1,970 and $0 of interest income, respectively, from Tempe/Phoenix Airport Resort LLC, respectively. As of July 31, 2020, the Advances from Affiliate – Related Party balance was approximately $1,000,000 from Tempe/Phoenix Airport Resort LLC. (The Tempe hotel was sold, and the inter-company loan was repaid in full in December 2020).

On July 14, 2017, the Trust purchased 40,000 shares of IHT stock from Marc Berg for $80,000. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 45,975 units of RRF Limited Partnership from Brian Wirth for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 45,975 units of RRF Limited Partnership from Christopher Wirth for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 40,000 shares of IHT stock from Eric Wirth for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 45,975 units of RRF Limited Partnership from Pamela Barnhill (Wirth family member) for $91,950. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On July 14, 2017, the Trust purchased 250,000 units of RRF Limited Partnership from James Wirth for $500,000. The balance was converted to a note payable with an annual interest rate of 7%. The final payment to pay the note in full was paid during the second Fiscal quarter of 2021.

On December 1, 2014, the Trust entered into a $1,000,000 net maximum Demand/Revolving Line of Credit/Promissory Note with Rare Earth Financial. The Demand/Revolving Line of Credit/Promissory Note bears interest at 7.0% per annum, is interest only quarterly and matures on June 30, 2021. No prepayment penalty exists on the Demand/Revolving Line of Credit/Promissory Note. The balance fluctuates significantly through the period with the highest payable balance being approximately $0 during the six months ended July 31, 2020. The Demand/Revolving Line of Credit/Promissory Note has a net maximum borrowing capacity of $1,000,000. Related party interest expense or income for the Demand/Revolving Line of Credit/Promissory Note for the six months ended July 31, 2020 was $0 of expense and approximately $0 of revenue.

On February 7, 2020, Rare Earth Financial provided an advance to the Trust in the amount of $25,000. As of July 31, 2020, the amount outstanding is $0. The advance has an annual interest rate of 7%. The interest expense for the second quarter of 2021 is negligible.

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Statements of Cash Flows, Supplemental Disclosures

6 Months Ended

Jul. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Statements of Cash Flows, Supplemental Disclosures

12. STATEMENTS OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES

The Trust paid $183,083 and $122,902 in cash for interest for the six months ended July 31, 2020 and 2019, respectively for operations. The amounts related to Notes Payables - IHT Shares of Beneficial Interest and Partnership Units repurchases amounted to $0 and $11,000, respectively, for the six months ended July 31, 2020 and 2019. No cash was paid for taxes for the six months ended July 31, 2020 and 2019.

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Commitments and Contingencies

6 Months Ended

Jul. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. COMMITMENTS AND CONTINGENCIES

Restricted Cash:

The Trust is obligated under a loan agreement relating to the Tucson Oracle property to deposit 4% of the individual hotel’s room revenue into an escrow account to be used for capital expenditures. The escrow funds applicable to the Tucson Oracle property for which a mortgage lender escrow exists is reported on the Trust’s Consolidated Balance Sheet as “Restricted Cash.” Since a $0 cash balance existed in Restricted Cash as of July 31, 2020 and January 31, 2020, Restricted Cash line was omitted on the Trust’s Consolidated Balance Sheet.

Membership Agreements:

InnSuites Hotels has entered into membership agreements with Best Western International, Inc. (“Best Western”) for both hotel properties. In exchange for use of the Best Western name, trademark and reservation system, all Hotels pay fees to Best Western based on reservations received through the use of the Best Western reservation system and the number of available suites at the Hotels. The agreements with Best Western have no specific expiration terms and may be cancelled by either party. Best Western requires that the hotels meet certain requirements for room quality, and the Hotels are subject to removal from its reservation system if these requirements are not met. The Hotels with third-party membership agreements received significant reservations through the Best Western reservation system. Under these arrangements, fees paid for membership fees and reservations were approximately $40,822 and $84,550 for the six months ended July 31, 2020 and 2019, respectively. These costs include fees for the Albuquerque and Tucson hotels in 2019. These fees are included in room operating expenses on the unaudited condensed consolidated statements of operations for Albuquerque and Tucson.

The nature of the operations of the Hotels exposes them to risks of claims and litigation in the normal course of their business. Although the outcome of these matters cannot be determined and is covered by insurance, management does not expect that the ultimate resolution of these matters will have a material adverse effect on the unaudited condensed consolidated financial position, results of operations or liquidity of the Trust.

Litigation:

The Trust is involved from time to time in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Trust’s unaudited condensed consolidated financial position, results of operations or liquidity.

Indemnification:

The Trust has entered into indemnification agreements with all our executive officers and Trustees. The agreements provide for indemnification against all liabilities and expenses reasonably incurred by an officer or Trustee in connection with the defense or disposition of any suit or other proceeding, in which he or she may be involved or with which he or she may be threatened, while in office or thereafter, because of his or her position at the Trust. There is no indemnification for any matter as to which an officer or Trustee is adjudicated to have acted in bad faith, with willful misconduct or reckless disregard of his or her duties, with gross negligence, or not in good faith in the reasonable belief that his or her action was in the Trust’s best interests. These agreements require the Trust, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as our director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by us. The Trust may advance payments in connection with indemnification under the agreements. The level of indemnification is to the full extent of the net equity based on appraised and/or market value of the Trust. Historically, the Trust has not incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying consolidated balance sheets.

See Note 14 – Leases, for discussion on lease payment commitments.

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Leases

6 Months Ended

Jul. 31, 2020

Leases [Abstract]

Leases

14. LEASES

The Trust has operating leases and finance lease for its corporate offices in Phoenix, Arizona, and land leased in Albuquerque, New Mexico. The Trust’s lease terms include options to extend or terminate the leases and the Trust includes these options in the lease term when it is reasonably certain to exercise that option.

Operating Leases

On August 4, 2017, the Trust entered into a five-year office lease agreement with Northpoint Properties for a commercial office lease at 1730 E Northern Ave, Suite 122, Phoenix, Arizona 85020 commencing on September 1, 2017. Base monthly rent of $4,100 increases 6% on a yearly basis. No rent is due for October 2018 and October 2022 months. The Trust also agreed to pay electricity and applicable sales tax. The office lease agreement provides early termination with a 90-day notification with an early termination fee of $12,000, $8,000, $6,000, $4,000, and $2,000 for years 1 - 5 of the lease term.

The Company’s Albuquerque Hotel is subject to non-cancelable ground lease. The Albuquerque Hotel non-cancelable ground lease was extended on January 14, 2014 and expires in 2058.

The following table presents the Company’s lease costs for the six months ended July 31, 2020:

	Six Months
	Ended
	31-Jul-20
Operating Lease Costs:
Operating lease cost*	$	120,000

* Short term lease costs were immaterial.

Supplemental cash flow information is as follows:

	Six Months
	Ended
	31-Jul-20
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(11,276	)
Lease Obligations obtained:
Operating leases, net	$	2,396,517
Long-term obligations	$	2,341,097

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2020
Operating leases		38
Weighted average discount rate
Operating leases		4.85	%

The aggregate future lease payments for Operating Lease Liability as of July 31, 2020 are as follows:

For the Years Ending January 31,
Remaining in 2021	$	85,080
2022		172,177
2023		148,348
2024		112,116
2025		112,116
Thereafter		5,151,311
Total minimum lease payments	$	5,781,148
Less: amount representing interest		3,384,631
Total present value of minimum payments		2,396,517
Less: current portion of operating lease liability	$	55,420
Long term portion of operating lease liability		2,341,097

Finance Leases

The Company’s Tucson Oracle Hotel is subject to non-cancelable cable lease. The Tucson Oracle Hotel non-cancelable cable lease expires in 2023.

The following table presents the Company’s lease costs for the six months ended July 31, 2020:

	Six Months
	Ended
	31-Jul-20
Finance Lease Costs:
Amortization of lease obligations	$	13,874
Interest on lease obligations		2,451

Supplemental cash flow information is as follows:

	Six Months
	Ended
	31-Jul-20
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	28,512
Lease Obligations obtained:
Finance leases, net	$	93,408
Long-term obligations	$	66,216

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2020
Finance leases		38
Weighted average discount rate
Finance leases		4.85	%

The aggregate future lease payments for Finance Lease Liability as of July 31, 2020 are as follows:

For the Years Ending January 31,
Remaining in 2021	$	15,562
2022		31,123
2023		31,123
2024		23,343
Total minimum lease payments	$	101,151
Less: amount representing interest		7,743
Total present value of minimum payments		93,408
Less: current portion	$	27,192
Long term portion of finance lease liability		66,216

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Share-Based Payments

6 Months Ended

Jul. 31, 2020

Equity [Abstract]

Share-Based Payments

15. SHARE-BASED PAYMENTS

The Trust compensates its three non-employee Trustees for their services through grants of restricted Shares. The aggregate grant date fair value of these Shares was $32,400. These restricted 18,000 shares, (6,000 each to the three Independent Trustees), vest in equal monthly amounts during fiscal year 2021.

During fiscal year 1999, the shareholders of the Trust adopted the 1997 Stock Incentive and Option Plan (the “Plan”). Pursuant to the Plan, the Compensation Committee may grant options to the Trustees, officers, other key employees, consultants, advisors, and similar employees of the Trust and certain of its subsidiaries and affiliates. The number of options that may be granted in a year is limited to 10% of the total Shares of Beneficial Interest and Partnership units in the Partnership (Class A and Class B) outstanding as of the first day of such year.

Generally, granted options expire 10 years from the date of grant, are exercisable during the optionee’s lifetime only by the recipient and are non-transferable. Unexercised options held by employees of the Trust generally terminate on the date the individual ceases to be an employee of the Trust.

There were no options granted during the three months ended July 31, 2020, and no options were outstanding as of that period end. The Plan currently has 1,000,000 options available to grant. See Note 17 for additional information on stock options. The Plan also permits the Trust to award stock appreciation rights, none of which, as of July 31, 2020, have been issued.

See Note 2 – “Summary of Significant Accounting Policies” for information related to grants of restricted shares under “Stock-Based Compensation.”

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Notes Receivable

6 Months Ended

Jul. 31, 2020

Priority return payments

Notes Receivable

16. NOTES RECEIVEABLE

Sale of IBC Hospitality Technologies; IBC Hotels LLC (IBC)

On August 15, 2018, the Trust entered into a final sale agreement for its subsidiary IBC Hotels LLC (IBC) with an effective sale date as of August 1, 2018 to an unrelated third-party buyer (Buyer). The sale price was $3,000,000, to be paid to IHT as follows:

1.

$250,000 at closing, which was received in cash on August 14, 2018;

2.

A secured promissory note receivable in the principal amount of $2,750,000 with interest to be accrued at 3.75% per annum, recorded in the accompanying condensed balance sheet in operations. The note was amended after closing, so that interest shall accrue for the first 26 months (starting August 2018), thereafter for month 27 and 28 principal and interest payments of 50% ($25,632 per month), then the remaining amount to be amortized over 59 months (payments of $52,054 per month) with maturity in November 2025. Future estimated receipts from this note are shown in the table below.

FISCAL YEAR
2021		-
2022		550,000
2023		550,000
2024		550,000
Thereafter		275,500
	$	1,925,500

As of January 31, 2020, the Trust evaluated the carrying value of the note of $2,750,00 for potential impairment.

After review, an impairment of $825,000, or 30%, was taken against the note. Factors for the impairment included, but were not limited to:

● Management’s evaluation of the current financial position of the Buyer, based on unaudited financial statements provided.

● A lack of substantial quantitative data, showing the impact of the recently executed digital advertising agreement between the Buyer and Google.

● Management’s best, conservative valuation of IBC’s assets, and their marketability, in the case of a default by the Buyer.

● The current and future impact of the COVID-19 pandemic, on the travel and hospitality industry, in which IBC’s reservation and booking technology operates.

As of July 31, 2020, management evaluated the carrying value of the note and the impairment taken to date and determined no further impairment is needed at this time.

The start date of the monthly payments was originally to commence in 2020 but was extended to November 2021 due to the Virus slowing down the economy in general, and the travel industry specifically. The Trust has evaluated the ongoing pandemic conditions and no impairment is deemed necessary as the travel industry is expected to fully recover by Q3 2021.

The note is secured by (1) pledge of the Buyer’s interest in IBC, and (2) a security interest in all assets of IBC provided IHT shall agree to subordinate such equity interest to commercially reasonable debt financing upon request.

If after effective date IBC closes an equity transaction with net proceeds to IBC in excess of $2,500,000, IBC/Buyer shall pay to IHT an amount equal to (a) 50% of the net proceeds received by IBC and (b) 50% of the sum of the unpaid balance of the note and accrued interest accrued but unpaid interest thereon, as the date of receipt of the net proceeds by IBC.

IHT agreed to provide continuing working capital support for a period of nine months in the amount of approximately $225,000 over a six-month period to IBC for transitional purposes. IHT has no managerial control nor does IHT have the ability to direct the operations or capital requirements of IBC as of August 1, 2018. IHT has no rights to any benefits or losses from IBC as of August 1, 2018. During the fiscal year ended January 31, 2019 IHT had provided $100,000 to IBC. During the fiscal year ended January 31, 2020, IHT provided $125,000. Furthermore, no support was provided in the second quarter ended July 31, 2020.

Default

If Buyer has not paid two or more payments on the note as scheduled, or if Buyer has not satisfied any other provisions in the note, IHT may give Buyer notice of default. If Buyer fails to cure the default within 30 days after notice (a) on or before February 5, 2021, then 75% of the issued and outstanding IBC interest shall be transferred to IHT, and (b) on or after February 5, 2021, then 51% of the issued and outstanding interest of the Company shall be transferred to IHT. Currently there has been no default due to the extension granted.

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Stock Options

6 Months Ended

Jul. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Options

17. STOCK OPTIONS

Effective February 5, 2015, the Board of Trustees of the Trust adopted the 2015 Equity Incentive Plan (“2015 Plan”), subject to shareholder approval, under which up to 1,600,000 Shares of Beneficial Interest of the Trust are authorized to be issued pursuant to grant of stock options, stock appreciation rights, restricted shares, restricted share units or other awards.

The Board of Trustees of the Trust has decided to terminate the 2015 Plan. Effective October 31, 2016, it has been determined that the Shareholders will not approve the 2015 Plan and the proposed grants have been rescinded. During the 2017 Annual Meeting of Shareholders, the IHT Shareholders approved the InnSuites Hospitality Trust 2017 Equity Incentive Plan (“2017 Plan”). Management has not granted any options under the 2017 Plan.

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Income and Occupancy Taxes

6 Months Ended

Jul. 31, 2020

Income Tax Disclosure [Abstract]

Income and Occupancy Taxes

18. INCOME AND OCCUPANCY TAXES

The Trust is taxed as a C-Corporation. The Trust’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Trust has received various IRS and state tax jurisdiction notices which the Trust in the process of responding to in which management believes the notices are without merit and expect full remediation of all tax notices. The Trust and subsidiaries have deferred tax assets of $4.0 million which includes cumulative net operating loss carryforwards of $1.1 million and syndications of $2.9 million, and deferred tax liability associated with book/tax differences of $1.5 million as of July 31, 2020. We have evaluated the net deferred tax asset and determined that it is not more likely than not we will receive full benefit from the net operating loss carryforwards. Therefore, we have determined a valuation allowance of approximately $2.5 million.

Sales and occupancy tax expense was approximately $766,000 for the six months ended July 31, 2020. This represents a liability arising from an occupancy tax discrepancy generated from our Tucson hotel which arose when we were notified in July 2020, of potentially underreporting and/or under collecting occupancy tax. We received a notice from the Arizona Department of Revenue indicating we were responsible for an additional 6% Pima County occupancy tax, in addition to the 6% State of Arizona occupancy tax we were already collecting and submitting to the State. To further complicate the situation, our filing position was such that we did not believe or know we were liable for any other tax, other than the State mandated 6%, because our hotel was located in an unincorporated area within Pima County. We were not aware of an additional County tax, and thus we filed our monthly returns as such. These additional amounts due for Hotel sales and occupancy expenses are not expected to be recurring, since the Trust collects and remits all necessary occupancy taxes to the state monthly.

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COVID-19 Disclosure

6 Months Ended

Jul. 31, 2020

Unusual or Infrequent Items, or Both [Abstract]

COVID-19 Disclosure

19. COVID-19 DISCLOSURE

COVID-19 has had a material detrimental impact on our business, financial results and liquidity, and such impact could worsen and last for an unknown period of time.

The global spread of COVID-19 has been and continues to be a complex and rapidly evolving situation, with governments, public institutions and other organizations imposing or recommending, and business and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation, limitations on the size of gatherings, closures of or occupancy or other operating limitations on work facilities, schools, public buildings and business, cancellation of events, including sporting events, conferences and meetings, and quarantines and lock-downs. COVID-19 and its consequences have dramatically reduced travel and demand for hotel rooms, which has and will continue to impact our business, operations, and financial results. We believe that it will be some time before lodging demand and revenue level recover and such recovery could vary across markets or regions around the world. The extent to which COVID-19 impacts our business, operations, and financial results, including the duration and magnitude of such effects, will depend on numerous evolving factors that we may not be able to accurately predict or assess, including the duration and scope of COVID-19 (including the location and extent of resurgences of the virus and the availability of effective treatments or vaccines); the negative impact COVID-19 has on global and regional economies and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence.

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Subsequent Events

6 Months Ended

Jul. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

20. SUBSEQUENT EVENTS

The Trust received an Income Tax Refund from the State of California, for an Amended 2018 Tax Return in the amount of approximately $175,000 on August 26, 2020. Furthermore, the Trust is anticipating an Income Tax Refund from the Internal Revenue Service, for an Amended 2018 Tax Return in the amount of approximately $119,000.

Management expects but cannot guarantee the Paycheck Protection Plan (PPP) Loans received by IHT, as well as the Tucson and Albuquerque hotels, because of the Covid-19 Virus Pandemic, to be fully forgiven, based upon Small Business Administration (SBA) guidelines. Furthermore, IHT has received preliminary approval of forgiveness from the lender on December 1, 2020, the approval is contingent on SBA approval. The approval process could take up to 90 days, to February 28, 2021.

On November 20, 2020, the Trust extended a $500,000 line of credit to UPI at an annual interest rate of 6%. The maturity date of the line of credit is December 31, 2024. Certain terms of the line of credit agreement are met, so the Trust will be granted 300,000 common stock warrants of UPI with an exercise price of $2.25 per share.

An affiliate of the Trust sold the Tempe Hotel on December 18, 2020. The Trust has received the full repayment of the approximately $1 million intercompany loan to Tempe. In addition, Rare Earth Financial (“REF”), an Affiliated Member of the Tempe Hotel has repaid approximately an $800,000 intercompany loan from the Trust.

As of February 1, 2021, UniGen has not drawn any funds and under the terms may not draw any funds; however IHT may at its sole discretion fund up to $500,000 and convert this into UniGen stock at $1.00 per share.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jul. 31, 2020

Accounting Policies [Abstract]

Use of Estimates

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, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Trust’s operations are affected by numerous factors, including the economy, virus/pandemic, competition in the hotel industry and the effect of the economy on the travel and hospitality industries. The Trust cannot predict if any of the above items will have a significant impact in the future, nor can it predict what impact, if any, the occurrence of these or other events might have on the Trust’s operations and cash flows. Significant estimates and assumptions made by management include, but are not limited to, the estimated useful lives of long-lived assets and recoverability of long-lived assets and the fair values of the long-lived assets.

Property, Equipment, and Hotel Properties

PROPERTY, EQUIPMENT, AND HOTEL PROPERTIES

Furniture, fixtures, building and improvements and hotel properties are stated at cost, except for land, and depreciated using the straight-line method over estimated lives ranging up to 40 years for buildings and improvements, and 3 to 10 years for furniture, fixtures and equipment.

Land is an indefinite-lived asset. The Trust tests its land for impairment annually, or whenever events or changes in circumstances indicates an impairment may have occurred, by comparing its carrying value to its implied fair value.

For tax purposes the Trust may take advantage of accelerated depreciation methods (MACRS) for new capital additions and improvements to its Hotels.

Management applies guidance ASC 360-10-35, to determine when it is required to test an asset for recoverability of its carrying value and whether, or not, an impairment exists. Under ASC 360-10-35, the Trust is required to test a long-lived asset for impairment when there is an indicator of impairment. Impairment indicators may include, but are not limited to, a drop in the performance of a long-lived asset, a decline in the hospitality industry or a decline in the economy. If an indicator of potential impairment is present, then an assessment is performed of whether the carrying amount of an asset exceeds its estimated undiscounted future cash flows over its estimated remaining life.

If the estimated undiscounted future cash flows over the asset’s estimated remaining life are greater than the asset’s carrying value, no impairment is recognized; however, if the carrying value of the asset exceeds the estimated undiscounted future cash flows, then the Trust would recognize an impairment expense to the extent the asset’s carrying value exceeds its fair value, if any. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are analyzed on a property-specific basis independent of the cash flows of other groups of assets. Evaluation of future cash flows is based on historical experience and other factors, including certain economic conditions, and committed future bookings.

Cash and Cash Equivalents

CASH AND CASH EQUIVALENTS

The Trust considers all highly liquid short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. The Trust believes it places its cash and cash equivalents only with high credit quality financial institutions, although these balances may periodically exceed federally insured limits.

Short-Term Investments - Available for Sale Securities

SHORT-TERM INVESTMENTS – AVAILABLE FOR SALE SECURITIES

The Trust currently owns a liquid investment account with Charles Schwab. The Trust believes it places its investments only with high credit quality financial institutions.

Revenue Recognition

REVENUE RECOGNITION

Hotel and Operations

ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers” is effective for reporting periods beginning after December 15, 2017. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations.

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. Revenues are recorded when rooms are occupied and when food and beverage sales are delivered. Management and trademark fees from non-affiliated hotels include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels and the one hotel owned by affiliates of Mr. Wirth.

Each room night consumed by a guest with a cancellable 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 room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Trust has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Trust recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Trust uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.

In evaluating its performance obligation, the Trust bundles the obligation to provide the guest the room itself with other obligations (such as free Wi-Fi, grab and go breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Trust’s obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Trust has no performance obligations once a guest’s stay is complete.

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

Accounts Receivables and Allowance for Doubtful Accounts

ACCOUNTS RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are derived from guest stays and other reservations at the Hotels. Accounts receivable are carried at original amounts billed less an estimate made for doubtful accounts based on a review of outstanding amounts on a quarterly basis. Management generally records an allowance for doubtful accounts for 50% of balances over 90 days due and 100% of balances over 120 days due. Accounts receivable are written off when collection efforts have been exhausted and they are deemed uncollectible. Recoveries, if any, of receivables previously written off are recorded when received. The Trust does not charge interest on accounts receivable balances and these receivables are unsecured. The following is a reconciliation of the allowance for doubtful accounts for the fiscal period ended July 31, 2020 and the fiscal year ended January 31, 2020.

Fiscal Year	Balance at the Beginning of Period			Discontinued Operations Adjustment		Charged to Expense			Deductions		Balance at the End of Period
July 31, 2020	$	(14,789	)	$	-	$	(6,933	)	$	-	$	(21,722	)
January 31, 2020	$	(5,943	)	$	-	$	(13,223	)	$	4,377	$	(14,789	)

Income Tax Receivable

INCOME TAX RECEIVABLE

The Trust amended its corporate tax returns for the previous year ended January 31, 2019. Such amendments resulted in a refund of approximately $294,000, which the Trust expects to receive by July 31, 2021.

Lease Accounting

LEASE ACCOUNTING

The Trust determines, at the inception of a contract, if the arrangement is a lease and whether it meets the classification criteria for a finance or operating lease. ROU assets represent the Trust’s right to use an underlying asset during the lease term and lease liabilities represent the Trust’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also include any advance lease payments and exclude lease incentives. As most of the Trust’s operating leases do not provide an implicit rate, the Trust uses its incremental borrowing rate based on information available at commencement date in determining the present value of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term (see Note 14).

Trustee Stock-based Compensation

TRUSTEE STOCK-BASED COMPENSATION

The Trust has an employee equity incentive plan, which is described more fully in Note 15 - “Share-Based Payments.” The three independent members of the Board of Trustees earn 6,000 IHT Shares per year. The Trust has paid the annual fees due to its Trustees by issuing Shares of Beneficial Interest out of its authorized but unissued Shares. Upon issuance, the Trust recognizes the shares as outstanding. The Trust recognizes expense related to the issuance based on the fair value of the shares upon the date of the restricted share grant and amortizes the expense equally over the period during which the shares vest to the Trustees.

During the six months ended July 31, 2020, the Trust granted restricted stock awards of 18,000 Shares to three independent members of the Board of Trustees, resulting in stock-based compensation of $14,400. The shares vest over one year, through the end of fiscal year ended January 31, 2021 monthly at a rate of approximately 500 shares for each outside Trustee or a total of 1,500 per month for three independent Trustees.

Treasury Stock

TREASURY STOCK

Treasury stock is carried at cost, including any brokerage commissions paid to repurchase the shares. Any shares issued from treasury stock are removed at cost, with the difference between cost and fair value at the time of issuance recorded against Shares of Beneficial Interest.

Net Loss Per Share

NET LOSS PER SHARE

Basic and diluted net loss per Share of Beneficial Interest is computed based on the weighted-average number of Shares of Beneficial Interest and potentially dilutive securities outstanding during the period. Dilutive securities are limited to the Class A and Class B units of the Partnership, which are convertible into 3,185,746 Shares of the Beneficial Interest, as discussed in Note 1.

For the six months ended July 31, 2020 and 2019, there were Class A and Class B Partnership units outstanding, which are convertible into Shares of Beneficial Interest of the Trust. Assuming conversion at the beginning of each period, the aggregate weighted-average of these Shares of Beneficial Interest would have been 3,185,746 and 3,185,746 in addition to the basic shares outstanding for the six months ended July 31, 2020 and 2019, respectively. These Shares of Beneficial Interest issuable upon conversion of the Class A and Class B Partnership units were anti-dilutive during the six months ended July 31, 2020 and 2019 and are excluded in the calculation of diluted earnings per share for those periods.

Advertising Costs

ADVERTISING COSTS

Amounts incurred for advertising costs are expensed as incurred. Advertising expense for operations totaled approximately $56,000 and $42,000 for the three months ended July 31, 2020 and 2019 respectively, and $116,000 and $84,000 for the six months ended July 31, 2020 and 2019, respectively.

Concentration of Credit Risk

CONCENTRATION OF CREDIT RISK

Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Trust to a concentration of credit risk consist primarily of cash and cash equivalents. Management’s assessment of the Trust’s credit risk for cash and cash equivalents is low as cash and cash equivalents are held in financial institutions believed to be credit worthy.

The Trust limits its exposure to credit loss by placing its cash with major financial institutions and invests only in short-term obligations.

While the Trust is exposed to credit losses due to the non-performance of its counterparties, the Trust considers the risk of this remote.

The Trust estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet.

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

For disclosure purposes, fair value is determined by using available market information and appropriate valuation methodologies. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. The fair value framework specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The fair value hierarchy levels are as follows:

● Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

● Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and / or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are level 2 valuation techniques.

● Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect a company’s own judgments about the assumptions that market participants would use in pricing an asset or liability.

The Trust has assets that are carried at fair value on a recurring basis, including warrants in a 3^rd party private company recorded in investments on the unaudited consolidated balance sheet.

Due to their short maturities, the carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value. The fair value of mortgage notes payable, notes payable to banks and notes and advances payable to related parties is estimated by using the current rates which would be available for similar loans having the same remaining maturities and are based on level 3 inputs.

Investment in Unigen Power, Inc.

INVESTMENT IN UNIGEN POWER, INC.

On December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UPI” or “UniGen”).

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%. The Debentures are convertible into Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share. The Loan is structured into two (2) payments of $600,000 and $400,000. The first payment of $600,000 was made by the Trust at closing on December 16, 2020 and the second payment of $400,000 was made on February 3, 2020.

UniGen issued the Trust common stock purchase warrants (the “Debenture Warrants”) to purchase up to 1,000,000 shares of Class A Common Stock (600,000 issued on January 31, 2020, and 400,000 issued on February 3, 2020). 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 200,000 shares of Class A Common Stock (120,000 issued at January 31, 2020, and 80,000 issued on February 3, 2020). The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.

On the Trust’s balance sheet, the investment of the $1,000,000 made in the current fiscal year consists of approximately $424,000 in note receivables and approximately $576,000 as the fair value of the warrant issued with the Trust’s investment in UniGen. The value of the premium related to the fair value of the warrants will accrete over the life of the debentures.

The value of the warrants was based on Black-Scholes pricing model based on the following inputs:

Debenture Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	1.00
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

Additional Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	2.25
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

Unigen Subsequent Event

UNIGEN SUBSEQUENT EVENT

UniGen has also agreed to allow IHT to fund a $500,000 line of credit at the option of IHT convertible into 500,000 shares of UniGen stock at $1 per share. And upon full subscription of the UniGen $2 million subscription grant IHT an additional 300,000 warrants at $2.25 per share. If all notes are converted and all warrants exercised, IHT would hold 3 million UniGen shares out of a total of approximately 12 million UniGen shares resulting in IHT owning approximately 25% of UniGen. Subsequent to July 31, 2020, no activity has occurred with this line of credit and thus no draws have been taken. 

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Nature of Operations and Basis of Presentation (Tables)

6 Months Ended

Jul. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Entity Ownership Percentage

The Trust exercises unilateral control over the Partnership and the entities listed below. Therefore, the unaudited condensed financial statements of the Partnership and the entities listed below are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.

	IHT OWNERSHIP %
ENTITY	DIRECT			INDIRECT (i)
Albuquerque Suite Hospitality, LLC		20.17	%		-
Tucson Hospitality Properties, LLLP		-			51.01	%
RRF Limited Partnership		75.89	%		-
InnSuites Hotels Inc.		100.00	%		-

(i) Indirect ownership is through the Partnership

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jul. 31, 2020

Accounting Policies [Abstract]

Schedule of Accounts Receivable and Allowance for Doubtful Accounts

The following is a reconciliation of the allowance for doubtful accounts for the fiscal period ended July 31, 2020 and the fiscal year ended January 31, 2020.

Fiscal Year	Balance at the Beginning of Period			Discontinued Operations Adjustment		Charged to Expense			Deductions		Balance at the End of Period
July 31, 2020	$	(14,789	)	$	-	$	(6,933	)	$	-	$	(21,722	)
January 31, 2020	$	(5,943	)	$	-	$	(13,223	)	$	4,377	$	(14,789	)

Schedule of Warrants Based on Black-Scholes Pricing Model

The value of the warrants was based on Black-Scholes pricing model based on the following inputs:

Debenture Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	1.00
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

Additional Warrants

Type of option	Call option
Stock price	$	2.25
Exercise (Strike) price	$	2.25
Time to maturity (years)		2.0
Annualized risk-free rate		1.630	%
Annualized volatility		27.43	%

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Property, Equipment, and Hotel Properties (Tables)

6 Months Ended

Jul. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property, Equipment, and Hotel Properties

As of July 31, 2020 and January 31, 2020, hotel properties consisted of the following:

	July 31, 2020			January 31, 2020
Land	$	2,500,000		$	2,500,000
Building and improvements		10,515,156			10,495,465
Furniture, fixtures and equipment		4,047,444			4,021,890
Total hotel properties		17,062,600			17,017,355
Less accumulated depreciation		(8,569,683	)		(8,155,224	)
Hotel Properties in Service, net		8,492,918			8,862,131
Construction in progress		0			40,965
Hotel properties, net	$	8,492,918		$	8,903,096

As of July 31, 2020 and January 31, 2020, corporate property and equipment consisted of the following:

	July 31, 2020			January 31, 2020
Land	$	7,005		$	7,005
Building and improvements		75,662			75,662
Furniture, fixtures and equipment		166,121			160,987
Total property, plant and equipment		248,788			243,654
Less accumulated depreciation		(175,679	)		(163,427	)
Property, Plant and Equipment, net	$	73,109		$	80,227

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Minimum Debt Payments (Tables)

6 Months Ended

Jul. 31, 2020

Debt Disclosure [Abstract]

Scheduled of Minimum Payments of Debt

Scheduled minimum payments of debt, net of debt discounts, as of July 31, 2020 are approximately as follows in the respective fiscal years indicated:

FISCAL YEAR	MORTGAGES		OTHER NOTES PAYABLE		TOTAL
2021	$	81,204	$	686,028	$	767,232
2022		170,856		560,001		730,857
2023		176,852		15,265		192,117
2024		219,151				219,151
2025		192,828				192,828
2026		203,490				203,490
Thereafter		4,979,833				4,979,833
	$	6,024,214	$	1,261,294	$	7,285,508

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Leases (Tables)

6 Months Ended

Jul. 31, 2020

Operating Leases [Member]

Schedule of Lease Costs

The following table presents the Company’s lease costs for the six months ended July 31, 2020:

	Six Months
	Ended
	31-Jul-20
Operating Lease Costs:
Operating lease cost*	$	120,000

* Short term lease costs were immaterial.

Schedule of Cash Flow Information

Supplemental cash flow information is as follows:

	Six Months
	Ended
	31-Jul-20
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(11,276	)
Lease Obligations obtained:
Operating leases, net	$	2,396,517
Long-term obligations	$	2,341,097

Schedule of Weighted Average Remaining Lease Terms and Discount Rates

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2020
Operating leases		38
Weighted average discount rate
Operating leases		4.85	%

Schedule of Future Minimum Rental Payments for Operating Lease and Finance Lease

The aggregate future lease payments for Operating Lease Liability as of July 31, 2020 are as follows:

For the Years Ending January 31,
Remaining in 2021	$	85,080
2022		172,177
2023		148,348
2024		112,116
2025		112,116
Thereafter		5,151,311
Total minimum lease payments	$	5,781,148
Less: amount representing interest		3,384,631
Total present value of minimum payments		2,396,517
Less: current portion of operating lease liability	$	55,420
Long term portion of operating lease liability		2,341,097

Finance Leases [Member]

Schedule of Lease Costs

The following table presents the Company’s lease costs for the six months ended July 31, 2020:

	Six Months
	Ended
	31-Jul-20
Finance Lease Costs:
Amortization of lease obligations	$	13,874
Interest on lease obligations		2,451

Schedule of Cash Flow Information

Supplemental cash flow information is as follows:

	Six Months
	Ended
	31-Jul-20
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	28,512
Lease Obligations obtained:
Finance leases, net	$	93,408
Long-term obligations	$	66,216

Schedule of Weighted Average Remaining Lease Terms and Discount Rates

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2020
Finance leases		38
Weighted average discount rate
Finance leases		4.85	%

Schedule of Future Minimum Rental Payments for Operating Lease and Finance Lease

The aggregate future lease payments for Finance Lease Liability as of July 31, 2020 are as follows:

For the Years Ending January 31,
Remaining in 2021	$	15,562
2022		31,123
2023		31,123
2024		23,343
Total minimum lease payments	$	101,151
Less: amount representing interest		7,743
Total present value of minimum payments		93,408
Less: current portion	$	27,192
Long term portion of finance lease liability		66,216

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Notes Receivable (Tables)

6 Months Ended

Jul. 31, 2020

Priority return payments

Schedule of Future Payments of Debt

FISCAL YEAR
2021		-
2022		550,000
2023		550,000
2024		550,000
Thereafter		275,500
	$	1,925,500

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Nature of Operations and Basis of Presentation (Details Narrative)	1 Months Ended	6 Months Ended		7 Months Ended	12 Months Ended
	Jul. 31, 2020 USD ($) Integer shares	Jul. 31, 2020 USD ($) Integer shares	Jul. 31, 2019	Feb. 26, 2021 USD ($)	Jan. 31, 2020 USD ($) shares	Feb. 02, 2019 USD ($)
Number of hotels | Integer	2	2
Number of suites | Integer	270	270
Short term investments	$ 60	$ 60
Operating right of use assets	2,183,413	2,183,413			$ 2,197,364
Operating lease liabilities	2,396,517	2,396,517
Accounting Standards Update 2016-02 [Member]
Operating right of use assets						$ 2,821,410
Operating lease liabilities						$ 2,913,568
December 31, 2021 [Member] | Advances to Affiliate [Member]
Line of credit limit	$ 1,000,000	$ 1,000,000
Class A Partnership Units [Member]
Partnership unit issued | shares	211,708	211,708			211,708
Partnership unit outstanding | shares	211,708	211,708			211,708
General Partner Units [Member]
Number of partnership units | shares	10,025,771	10,025,771			10,025,771
Innsuites Hotel Located in Albuquerque New Mexico [Member]
Partnership ownership interest percentage		20.17%
Class A Partnership Units [Member]
Percentage of total partnership units		1.60%			1.60%
General Partner Units [Member]
Partnership ownership interest percentage		75.89%			75.89%
RRF Limited Partnership [Member] | Innsuites Hotel Located in Tucson, Arizona [Member]
Partnership ownership interest percentage		51.01%
James Wirth [Member] | Class B Partnership Units [Member]
Partnership unit outstanding | shares	2,974,038	2,974,038			2,974,038
Trust [Member]
Line of credit amount	$ 0	$ 0
Debt instrument interest rate	7.00%	7.00%
Cash and cash equivalents	$ 130,000	$ 130,000
Short term investments	130,000	130,000
Line of credit availability combined	1,000,000	1,000,000
Advances to affiliates	1,000,000	1,000,000
Trust [Member] | Advances to Affiliate [Member]
Line of credit amount	1,000,000	1,000,000
Republic Bank of Arizona [Member]
Line of credit amount	$ 150,000	$ 150,000
Limited Partner [Member]
Number of partnership units | shares	3,185,746	3,185,746			3,185,746
UniGen Power Inc. [Member]
Convertible debenture	$ 1,000,000	$ 1,000,000
Percentage of ownership interest held by the trust	6.00%
RRF Limited Partnership [Member] | Weighted Average [Member]
Percentage of ownership interest held by the trust		75.89%	75.89%
RRF Limited Partnership [Member] | General Partner [Member]
Percentage of ownership interest held by the trust		75.89%			75.89%
Tucson Hotel Loan [Member]
Line of credit limit	$ 3,600,000	$ 3,600,000
Tucson Hotel Loan [Member] | Third Quarter of Fiscal Two Thousand Twenty Two [Member]
Repayment of loan		$ 3,500,000
Tempe Hotel [Member] | Subsequent Event [Member]
Repayment of loan				$ 1,000,000
Tempe Hotel [Member] | Trust [Member] | Subsequent Event [Member]
Repayment of loan				$ 800,000

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Nature of Operations and Basis of Presentation - Schedule of Entity Ownership Percentage (Details)	Jul. 31, 2020
Albuquerque Suite Hospitality, LLC [Member] | Direct Ownership [Member]
IHT OWNERSHIP %	20.17%
Albuquerque Suite Hospitality, LLC [Member] | Indirect Ownership [Member]
IHT OWNERSHIP %	0.00%	[1]
Tucson Hospitality Properties, LLLP [Member] | Direct Ownership [Member]
IHT OWNERSHIP %	0.00%
Tucson Hospitality Properties, LLLP [Member] | Indirect Ownership [Member]
IHT OWNERSHIP %	51.01%	[1]
RRF Limited Partnership [Member] | Direct Ownership [Member]
IHT OWNERSHIP %	75.89%
RRF Limited Partnership [Member] | Indirect Ownership [Member]
IHT OWNERSHIP %	0.00%	[1]
InnSuites Hotels Inc. [Member] | Direct Ownership [Member]
IHT OWNERSHIP %	100.00%
InnSuites Hotels Inc. [Member] | Indirect Ownership [Member]
IHT OWNERSHIP %	0.00%	[1]

[1] Indirect ownership is through the Partnership

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)				6 Months Ended
	Feb. 02, 2021	Jan. 31, 2021	Dec. 16, 2019	Jul. 31, 2020	Jul. 31, 2019	Feb. 03, 2020	Jan. 31, 2020
Corporate tax returns				$ 294,000
Stock-based compensation				$ 14,400	$ 16,200
Aggregate weighted average shares of beneficial for units of partnership				3,185,746	3,185,746
Weighted average incremental shares resulting from unit conversion				3,185,746	3,185,746
Advertising expense				$ 56,000	$ 42,000
Investments				1,000,000			$ 600,000
Fair value of warrants				$ 576,000
Debenture Warrants [Member]
Warrants exercise price				$ 1.00
Additional Warrants [Member]
Warrants exercise price				$ 2.25
UniGen Power Inc. [Member]
Investments				$ 1,000,000
Notes receivable				$ 424,000
UniGen Power Inc. [Member] | Debenture Warrants [Member] | Class A Common Stock [Member]
Number of warrants to purchase common stock			1,000,000			400,000	600,000
Warrants exercise price			$ 1.00
UniGen Power Inc. [Member] | Additional Warrants [Member] | Class A Common Stock [Member]
Number of warrants to purchase common stock			200,000			80,000	120,000
Warrants exercise price			$ 2.25
Convertible Debenture Purchase Agreement [Member] | UniGen Power Inc. [Member]
Payments on secured convertible debentures			$ 1,000,000
Debt instrument, conversion price per share			$ 1.00
Convertible Debenture Purchase Agreement [Member] | UniGen Power Inc. [Member] | December 16, 2020 [Member]
Payments on secured convertible debentures			$ 600,000
Convertible Debenture Purchase Agreement [Member] | UniGen Power Inc. [Member] | February 3, 2020 [Member]
Payments on secured convertible debentures			$ 400,000
Subsequent Event [Member] | UniGen Power Inc. [Member]
Debt instrument, conversion price per share	$ 1.00
Line of credit, funded value	$ 500,000
Number of options convertible into shares	500,000
Subscription of shares and warrants, description	Upon full subscription of the UniGen $2 million subscription grant IHT an additional 300,000 warrants at $2.25 per share. If all notes are converted and all warrants exercised, IHT would hold 3 million UniGen shares out of a total of approximately 12 million UniGen shares resulting in IHT owning approximately 25% of UniGen.
Three Independent Members [Member]
Stock issued during period share-based compensation, shares				6,000
Three Independent Trustees [Member] | Subsequent Event [Member]
Vested shares		500
Vested shares, value		$ 1,500
90 days [Member]
Percentage of allowance for doubtful accounts				50.00%
120 days [Member]
Percentage of allowance for doubtful accounts				100.00%
Restricted Stock [Member] | Three Independent Members [Member]
Stock issued during period share-based compensation, shares				18,000
Building and Improvements [Member] | Maximum [Member]
Property, plant and equipment, useful life				40 years
Furniture, Fixtures and Equipment [Member] | Maximum [Member]
Property, plant and equipment, useful life				10 years
Furniture, Fixtures and Equipment [Member] | Minimum [Member]
Property, plant and equipment, useful life				3 years

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Summary of Significant Accounting Policies - Schedule of Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jul. 31, 2020	Jan. 31, 2020
Accounting Policies [Abstract]
Beginning Balance	$ (14,789)	$ (5,943)
Discontinued Operations Adjustment
Charged to Expense	(6,933)	(13,223)
Deductions		4,377
Ending Balance	$ (21,722)	$ (14,789)

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Summary of Significant Accounting Policies - Schedule of Warrants Based on Black-Scholes Pricing Model (Details)	Jul. 31, 2020 $ / shares
Debenture Warrants [Member]
Stock price	$ 2.25
Exercise (Strike) price	$ 1.00
Fair value of warrants measurement input, term	2 years
Debenture Warrants [Member] | Annualized Risk-free Rate [Member]
Fair value of warrants measurement input, percentage	1.630
Debenture Warrants [Member] | Annualized Volatility [Member]
Fair value of warrants measurement input, percentage	27.43
Additional Warrants [Member]
Stock price	$ 2.25
Exercise (Strike) price	$ 2.25
Fair value of warrants measurement input, term	2 years
Additional Warrants [Member] | Annualized Risk-free Rate [Member]
Fair value of warrants measurement input, percentage	1.630
Additional Warrants [Member] | Annualized Volatility [Member]
Fair value of warrants measurement input, percentage	27.43

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Sale of Ownership Interests in Subsidiaries (Details Narrative) - $ / shares										6 Months Ended
	Jun. 19, 2017	Feb. 15, 2017	Jan. 31, 2010	Sep. 15, 2009	Jan. 05, 2009	Sep. 10, 2007	Aug. 18, 2005	Sep. 10, 2002	Jan. 02, 2001	Jul. 31, 2020
Maximum [Member]
Number of units were available for sale	750,000		350,000	250,000	300,000	350,000	350,000	350,000	250,000
Class A [Member]
Number of units sold during period		250
Class B [Member]
Number of units sold during period		200
Albuquerque [Member] | Class A, Class B and Class C [Member] | Minimum [Member]
Limited liability limited partnership interests		550
Albuquerque [Member] | Class A, Class B and Class C [Member] | Maximum [Member]
Limited liability limited partnership interests		600
Albuquerque Suite Hospitality, LLC [Member]
Percentage of membership interest in a subsidiary committed to purchase by an affiliate										50.10%
Albuquerque Suite Hospitality, LLC [Member]
Sale price per unit										$ 10,000
Number of units were available for sale		10,000
Number of units sold during period		112
Tucson Hospitality Properties LP [Member] | Rare Earth Financial, LLC [Member]
Cumulative priority distributions per unit per year										$ 700

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Property, Equipment, and Hotel Properties - Schedule of Property, Equipment, and Hotel Properties (Details) - USD ($)	Jul. 31, 2020	Jan. 31, 2020
Property, Plant and Equipment, net	$ 8,566,027	$ 8,983,323
Hotel Properties [Member]
Total property, plant and equipment	17,062,600	17,017,355
Less accumulated depreciation	(8,569,683)	(8,155,224)
Property, Plant and Equipment, net	8,492,918	8,903,096
Hotel Properties [Member] | Land [Member]
Total property, plant and equipment	2,500,000	2,500,000
Hotel Properties [Member] | Building and Improvements [Member]
Total property, plant and equipment	10,515,156	10,495,465
Hotel Properties [Member] | Furniture, Fixtures and Equipment [Member]
Total property, plant and equipment	4,047,444	4,021,890
Hotel Properties [Member] | Hotel Properties in Service [Member]
Total property, plant and equipment	8,492,918	8,862,131
Hotel Properties [Member] | Construction in Progress [Member]
Total property, plant and equipment	0	40,965
Property, Plant and Equipment [Member]
Total property, plant and equipment	248,788	243,654
Less accumulated depreciation	(175,679)	(163,427)
Property, Plant and Equipment, net	73,109	80,227
Property, Plant and Equipment [Member] | Land [Member]
Total property, plant and equipment	7,005	7,005
Property, Plant and Equipment [Member] | Building and Improvements [Member]
Total property, plant and equipment	75,662	75,662
Property, Plant and Equipment [Member] | Furniture, Fixtures and Equipment [Member]
Total property, plant and equipment	$ 166,121	$ 160,987

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Mortgage Notes Payable (Details Narrative) - USD ($)		6 Months Ended	12 Months Ended
	Jun. 29, 2017	Jul. 31, 2020	Jan. 31, 2020
Debt instrument maturity description		The mortgage note payable has a scheduled maturity date in June 2042.
Mortgage notes payable interest rate		4.69%	4.69%
Mortgage loan face amount		$ 4,648,000	$ 4,709,000
Debt instrument discount		5,000	$ 5,000
Mortgage note payable monthly installments		$ 28,493
Albuquerque Hotel [Member]
Debt instrument interest rate		4.90%
Mortgage loan face amount		$ 1,400,000
Business Loan Agreement [Member]
Mortgage facility amount	$ 5,000,000
Refinancing mortgage facility amount	$ 3,045,000
Debt instrument maturity date	Jun. 19, 2042
Business Loan Agreement [Member] | Interest Floor Rate [Member]
Debt instrument interest rate	4.69%
Business Loan Agreement [Member] | Prime Rate [Member]
Debt instrument interest rate	2.00%

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Notes Payable and Notes Receivable - Related Party (Details Narrative) - Rare Earth Financial, LLC [Member] - USD ($)		6 Months Ended
	Dec. 02, 2014	Jul. 31, 2020	Jul. 31, 2019	Jan. 31, 2020
Line of credit interest rate	7.00%
Line of credit maturity date	Aug. 24, 2021
Line of credit increased maximum borrowing capacity		$ 1,000,000
Note receivable - related party including accrued interest		0		$ 0
Interest income, related party		$ 0	$ 3,632

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Other Notes Payable (Details Narrative) - USD ($)		6 Months Ended
	Jul. 01, 2019	Jul. 31, 2020	Jan. 31, 2020	Mar. 20, 2017	Jun. 20, 2016
Debt instrument, principal amount		$ 4,648,000	$ 4,709,000
Hayden Loan [Member]
Debt instrument interest rate	4.50%
Debt instrument, maturity date	Jun. 30, 2021
Unsecured loan					$ 270,000
Hayes Loan [Member]
Debt instrument, principal amount		270,000
Sweitzer Loans [Member]
Debt instrument interest rate	4.00%
Debt instrument, maturity date	Jun. 30, 2021
Unsecured loan				$ 100,000
Debt instrument, principal amount		100,000
Individual Lender [Member]
Notes payable outstanding to unrelated third parties		$ 200,000
Debt instrument interest rate		4.00%
Unsecured loan		$ 200,000
Other Notes Payable [Member]
Debt instrument interest rate			7.00%
Debt instrument, maturity date		Jan. 31, 2023
Other Notes Payable [Member] | Class A Partnership Units [Member]
Notes payable outstanding to unrelated third parties		$ 188,000
Stock repurchased during period, shares		57,732
Other Notes Payable [Member] | Shares of Beneficial Interest [Member]
Stock repurchased during period, shares		273,898
Other Notes Payable [Member] | Class A [Member] | Shares of Beneficial Interest [Member] | Albuquerque Suite Hospitality, LLC [Member]
Stock repurchased during period, shares		1
Paycheck Protection Program, CARES Act [Member] | Tucson Hospitality Properties LP [Member]
Debt instrument, principal amount		$ 228,602
Paycheck Protection Program, CARES Act [Member] | Albuquerque Suite Hospitality, LLC [Member]
Debt instrument, principal amount		187,685
Paycheck Protection Program, CARES Act [Member] | InnSuites Hospitality [Member]
Debt instrument, principal amount		$ 86,700

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Minimum Debt Payments - Scheduled of Minimum Payments of Debt (Details)	Jul. 31, 2020 USD ($)
2021	$ 767,232
2022	730,857
2023	192,117
2024	219,151
2025	192,828
2026	203,490
Thereafter	4,979,833
Long term debt	7,285,508
Mortgages [Member]
2021	81,204
2022	170,856
2023	176,852
2024	219,151
2025	192,828
2026	203,490
Thereafter	4,979,833
Long term debt	6,024,214
Other Notes Payable [Member]
2021	686,028
2022	560,001
2023	15,265
Long term debt	$ 1,261,294

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Description of Beneficial Interests (Details Narrative) - shares									6 Months Ended
	Jun. 19, 2017	Jan. 31, 2010	Sep. 15, 2009	Jan. 05, 2009	Sep. 10, 2007	Aug. 18, 2005	Sep. 10, 2002	Jan. 02, 2001	Jul. 31, 2020	Jul. 31, 2019	Apr. 30, 2019
Stock repurchase program, remaining number of shares authorized to be repurchased									1.04		1.68
Stock repurchase program, number of shares authorized to be repurchased									746,060
Shares of Beneficial Interest [Member]
Stock repurchased during period, shares									198,889	65,142
Maximum [Member]
Number of units were available for sale	750,000	350,000	250,000	300,000	350,000	350,000	350,000	250,000

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Related Party Transactions (Details Narrative) - USD ($)						6 Months Ended		12 Months Ended
	Feb. 07, 2020	Jul. 14, 2017	Jun. 17, 2017	Dec. 22, 2015	Dec. 02, 2014	Jul. 31, 2020	Jul. 31, 2019	Jan. 31, 2020
Outstanding note payable								$ 161,440
Trust [Member]
Revenue						75,000
Advances to affiliate						1,000,000
Trust [Member] | IHT [Member] | Marc Berg [Member]
Line of credit maturity date		Jul. 31, 2021
Line of credit interest rate		7.00%
Stock purchased during period, shares		40,000
Stock purchased during period value		$ 80,000
Trust [Member] | IHT [Member] | Eric Wirth [Member]
Line of credit maturity date		Jul. 31, 2021
Line of credit interest rate		7.00%
Stock purchased during period, shares		40,000
Stock purchased during period value		$ 91,950
Tempe/Phoenix Airport Resort LLC [Member]
Advances to affiliate				$ 500,000
Percentage of advances affiliate owns				42.00%
Line of credit limit			$ 1,000,000
Line of credit maturity date			Dec. 31, 2021
Line of credit interest rate			7.00%
Interest income						1,970	$ 0
Advances from affiliate - related party						$ 1,000,000
General Partner [Member]
Partnership ownership interest percentage						75.89%		75.89%
Innsuites Hotel Located in Tucson [Member]
Partnership ownership interest percentage						51.01%
Innsuites Hotel Located in Albuquerque New Mexico [Member]
Partnership ownership interest percentage						20.17%
Mr. Wirth and Affiliates [Member]
Number of shares held for beneficial interest of trust						5,876,683		5,881,683
Percentage of shares issued and outstanding of beneficial interest						64.63%		62.93%
Mr. Wirth and Affiliates [Member] | Class B Partnership Units [Member]
Number of partnership unit held for affiliates						2,974,038		2,974,038
Percentage of outstanding partnership units						22.51%		22.51%
IBC Hotels [Member] | Mr. Wirth and Affiliates [Member]
Percentage of room revenue received from hotels owned by affiliates						5.00%
Related party, monthly accounting fee						$ 2,000
Agreement term description						These agreements have no expiration date and may be cancelled by either party with 90-days written notice or 30-days written notice in the event the property changes ownership.
Mr. Wirth, Brain James and Affiliates [Member]
Yearly salary						$ 36,000
RRF Limited Partnership [Member] | Trust [Member] | Brian Wirth [Member]
Line of credit maturity date		Jul. 31, 2021
Line of credit interest rate		7.00%
Stock purchased during period, shares		45,975
Stock purchased during period value		$ 91,950
RRF Limited Partnership [Member] | Trust [Member] | Christopher Wirth [Member]
Line of credit maturity date		Jul. 31, 2021
Line of credit interest rate		7.00%
Stock purchased during period, shares		45,975
Stock purchased during period value		$ 91,950
RRF Limited Partnership [Member] | Trust [Member] | Pamela J. Barnhill [Member]
Line of credit maturity date		Jul. 31, 2021
Line of credit interest rate		7.00%
Stock purchased during period, shares		45,975
Stock purchased during period value		$ 91,950
RRF Limited Partnership [Member] | Trust [Member] | James Wirth [Member]
Line of credit maturity date		Jul. 31, 2021
Line of credit interest rate		7.00%
Stock purchased during period, shares		250,000
Stock purchased during period value		$ 500,000
Rare Earth Financial [Member] | Trust [Member]
Revenue						0
Line of credit limit					$ 1,000,000
Line of credit maturity date					Jun. 30, 2021
Line of credit interest rate					7.00%
Interest income						0
Line of credit						0
Rare Earth Financial [Member] | Trust [Member] | James Wirth [Member]
Advances to affiliate	$ 25,000
Line of credit interest rate	7.00%
Outstanding note payable						$ 0

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Statements of Cash Flows, Supplemental Disclosures (Details Narrative) - USD ($)	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
Notes Payables - IHT Shares of Beneficial Interest and Partnership Units repurchases	$ 0	$ 11,000
Cash paid for taxes	0	0
Trust [Member]
Cash paid for interest	$ 183,083	$ 122,902

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Commitments and Contingencies (Details Narrative) - USD ($)	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jan. 31, 2020
Restricted cash	$ 0		$ 0
Membership fees and reservation amount	$ 40,822	$ 84,550
Tucson Oracle Property [Member]
Percentage of deposit used for capital expenditures	4.00%

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Leases (Details Narrative) - USD ($)		6 Months Ended
	Sep. 01, 2017	Jul. 31, 2020
Northpoint Properties [Member]
Operating lease, description		On August 4, 2017, the Trust entered into a five-year office lease agreement with Northpoint Properties for a commercial office lease at 1730 E Northern Ave, Suite 122, Phoenix, Arizona 85020 commencing on September 1, 2017.
Base monthly rent	$ 4,100
Iincreases in rent rate yearly	6.00%
Operating lease, option to terminate	The office lease agreement provides early termination with a 90-day notification with an early termination fee of $12,000, $8,000, $6,000, $4,000, and $2,000 for years 1 - 5 of the lease term.
Operating lease, existence of option to terminate	true
Operating lease, early termination fee, year one		$ 12,000
Operating lease, early termination fee, year two		8,000
Operating lease, early termination fee, year three		6,000
Operating lease, early termination fee, year four		4,000
Operating lease, early termination fee, year five		$ 2,000
Northpoint Properties [Member] | Minimum [Member]
Operating lease term of contract	1 year
Northpoint Properties [Member] | Maximum [Member]
Operating lease term of contract	5 years
Albuquerque Hotel [Member]
Operating lease, option to extend		The Albuquerque Hotel non-cancelable ground lease was extended on January 14, 2014 and expires in 2058.
Operating lease, existence of option to extend		true

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Leases - Schedule of Lease Costs (Details)	6 Months Ended
	Jul. 31, 2020 USD ($)
Leases [Abstract]
Operating lease cost	$ 120,000	[1]
Finance Lease Cost: Amortization of right-of-use assets	13,874
Finance Lease Cost: Interest on lease obligations	$ 2,451

[1] Short term lease costs were immaterial.

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Leases - Schedule of Cash Flow Information (Details) - USD ($)	6 Months Ended
	Jul. 31, 2020	Jan. 31, 2020
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases	$ (11,276)
Right-of-use assets obtained in exchange for lease obligations Operating leases, net	2,396,517
Operating leases, Long-term obligations	2,341,097	$ 2,252,964
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases	28,512
Right of use assets obtained in exchange for lease liabilities: Finance leases	93,408
Finance leases, Long-term obligations	$ 66,216	$ 75,396

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Leases - Schedule of Weighted Average Remaining Lease Terms and Discount Rates (Details)	Jul. 31, 2020
Leases [Abstract]
Weighted-average remaining lease term (years) - Operating leases	38 years
Weighted-average discount rate - operating leases	4.85%
Weighted-average remaining lease term - Finance leases	38 years
Weighted-average discount rate - Finance leases	4.85%

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Leases - Schedule of Future Minimum Rental Payments for Operating Lease and Finance Lease (Details) - USD ($)	Jul. 31, 2020	Jan. 31, 2020
Leases [Abstract]
Remaining in 2021	$ 85,080
2022	172,177
2023	148,348
2024	112,116
2025	112,116
Thereafter	5,151,311
Total minimum lease payments	5,781,148
Less: amount representing interest	3,384,631
Total present value of minimum payments	2,396,517
Less: current portion of operating lease liability	55,420	$ 168,780
Long term portion of operating lease liability	2,341,097	2,252,964
Remaining in 2021	15,562
2022	31,123
2023	31,123
2024	23,343
Total minimum lease payments	101,151
Less: amount representing interest	7,743
Total present value of minimum payments	93,408
Less: current portion	27,192	31,123
Long term portion of finance lease liability	$ 66,216	$ 75,396

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Share-Based Payments (Details Narrative)	6 Months Ended
	Jul. 31, 2020 USD ($) shares
Number of restricted shares issued, value | $	$ 32,400
Number of restricted shares	18,000
1997 Stock Incentive and Option Plan [Member]
Stock options expiration period	10 years
Options granted
Options outstanding
Options available to grant	1,000,000
Class A and B Limited Partnership Units [Member]
Percentage of shares of beneficial interest and partnership unit	10.00%
Independent Trustees One [Member]
Number of restricted shares	6,000
Independent Trustees Two [Member]
Number of restricted shares	6,000
Independent Trustees Three [Member]
Number of restricted shares	6,000

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Notes Receivable (Details Narrative) - USD ($)					6 Months Ended
	Jan. 31, 2020	Aug. 15, 2018	Aug. 15, 2018	Aug. 14, 2018	Jul. 31, 2020	Jan. 31, 2019
Proceeds from sale of business and receivable				$ 250,000
Debt instrument, principal amount	$ 4,709,000				$ 4,648,000
Working capital support period			9 months
Working capital per month	125,000					$ 100,000
Debt default payment, description					If Buyer has not paid two or more payments on the note as scheduled, or if Buyer has not satisfied any other provisions in the note, IHT may give Buyer notice of default. If Buyer fails to cure the default within 30 days after notice (a) on or before February 5, 2021, then 75% of the issued and outstanding IBC interest shall be transferred to IHT, and (b) on or after February 5, 2021, then 51% of the issued and outstanding interest of the Company shall be transferred to IHT. Currently there has been no default due to the extension granted.
Promissory Notes [Member]
Debt instrument, principal amount	$ 275,000
Debt instrument interest rate	30.00%
Impairment charges	$ 825,000
IBC Hotels, LLC [Member]
Debt instrument, principal amount		$ 225,000	$ 225,000
Proceeds from notes receivable		$ 2,500,000
Proceeds from notes receivable, percentage		50.00%
Unpaid balance percentage		50.00%
Working capital support period			6 months
IBC Hotels, LLC [Member] | Promissory Notes [Member]
Debt instrument, principal amount		$ 2,750,000	$ 2,750,000
Debt instrument interest rate		3.75%	3.75%
Debt description		The note was amended after closing, so that interest shall accrue for the first 26 months (starting August 2018), thereafter for month 27 and 28 principal and interest payments of 50% ($25,632 per month), then the remaining amount to be amortized over 59 months (payments of $52,054 per month) with maturity in November 2025
IBC Hotels, LLC [Member] | Promissory Notes [Member] | Payments of 50% [Member]
Principal payments		$ 25,632
IBC Hotels, LLC [Member] | Promissory Notes [Member] | Amortized Over 59 Months [Member]
Principal payments		52,054
IBC Hotels, LLC [Member] | Unrelated Third Party Buyer [Member]
Final sales amount		$ 3,000,000	$ 3,000,000

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Notes Receivable - Schedule of Future Payments of Debt (Details) - USD ($)	Jul. 31, 2020	Jan. 31, 2020
Priority return payments
2021
2022	550,000
2023	550,000
2024	550,000
Thereafter	275,500
Notes receivable	$ 1,925,500	$ 1,833,333

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Stock Options (Details Narrative)	Feb. 05, 2015 shares
Board of Trustees [Member] | 2015 Equity Incentive Plan [Member]
Shares of beneficial interest of trust are authorized to issued	1,600,000

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Income and Occupancy Taxes (Details Narrative) - Trust [Member]	6 Months Ended
	Jul. 31, 2020 USD ($)
Deferred tax assets	$ 4,000,000
Net operating loss carryforwards	1,100,000
Syndications	2,900,000
Deferred tax liability	1,500,000
Valuation allowance	2,500,000
Sales and occupancy tax expense	$ 766,000
Occupancy tax, discrepancy	Sales and occupancy tax expense was approximately $766,000 for the six months ended July 31, 2020. This represents a liability arising from an occupancy tax discrepancy generated from our Tucson hotel which arose when we were notified in July 2020, of potentially underreporting and/or under collecting occupancy tax. We received a notice from the Arizona Department of Revenue indicating we were responsible for an additional 6% Pima County occupancy tax, in addition to the 6% State of Arizona occupancy tax we were already collecting and submitting to the State. To further complicate the situation, our filing position was such that we did not believe or know we were liable for any other tax, other than the State mandated 6%, because our hotel was located in an unincorporated area within Pima County. We were not aware of an additional County tax, and thus we filed our monthly returns as such. These additional amounts due for Hotel sales and occupancy expenses are not expected to be recurring, since the Trust collects and remits all necessary occupancy taxes to the state monthly.

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Subsequent Events (Details Narrative) - USD ($)			7 Months Ended
	Nov. 20, 2020	Aug. 26, 2020	Feb. 26, 2021	Feb. 02, 2021	Jul. 31, 2020	Jan. 31, 2020
Debt instrument face amount					$ 4,648,000	$ 4,709,000
Trust [Member]
Debt interest rate					7.00%
Subsequent Event [Member] | UniGen Power Inc. [Member]
Line of credit, funded value				$ 500,000
Stock conversion per share				$ 1.00
Subsequent Event [Member] | Tempe Hotel [Member]
Repayment of loan			$ 1,000,000
Subsequent Event [Member] | Tempe Hotel [Member] | Trust [Member]
Repayment of loan			$ 800,000
Subsequent Event [Member] | Line of Credit [Member] | UniGen Power Inc. [Member]
Debt instrument face amount	$ 500,000
Debt interest rate	6.00%
Debt instrument maturity date	Dec. 31, 2024
Common stock warrants	300,000
Warrants exercise price per shares	$ 2.25
Subsequent Event [Member] | Internal Revenue Service (IRS) [Member]
Income Tax Refund		$ 119,000
Subsequent Event [Member] | California [Member]
Income Tax Refund		$ 175,000