NATURE OF OPERATIONS AND BASIS OF PRESENTATION

6 Months Ended

Jul. 31, 2025

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, 2025, InnSuites Hospitality Trust (the “Trust”, “IHT”, “we”, “us” or “our”) is a publicly traded unincorporated Ohio real estate investment trust (REIT). 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 are operated under the federally trademarked name “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., (“UniGen”), approximately $668,750 in UniGen’s privately-held common stock (575,000 shares), and hold warrants to make further UniGen Investments in the future.

IHT is currently taxed as a C corporation, founded and first listed on NYSE 55 years ago with uninterrupted annual dividends each year since inception in 1971. IHT is pursuing opportunities in ownership and management of hotels, reservations and branding services of independent hotels, and diversified development of innovative new efficient clean energy generation. Ownership of hotels takes place through Tucson Hospitality Properties and Albuquerque Suite Hotels subsidiaries. Management of hotels, and management of InnDependent Boutique Collection Hotels (IBC), is handled through RRF Limited Liability Limited Partnership (RRF), its management subsidiary. Diversified clean energy investment takes place through investment in UniGen Power Inc.

Hotel Operations:

Our Tucson, Arizona Hotel and our Hotel located in Albuquerque, New Mexico are moderate service hotels. Both hotels offer swimming pools, fitness centers, business centers, and complimentary breakfast. In addition, the Hotels offer modest conference facilities. The Tucson hotel has “PJ’s” Pub and Café, as well.

The Trust is the sole general partner of RRF Limited Liability Limited Partnership, a Delaware limited partnership (the “Partnership”), and owned a 75.89% interest in the Partnership as of July 31, 2025 and January 31, 2025, respectively. The Trust’s weighted average ownership for the three months ended July 31, 2025 and 2024 was 75.89%, respectively. As of July 31, 2025, the Partnership owned a 51.75% interest in an InnSuites® hotel located in Tucson, Arizona. The Trust owns a direct 21.90% interest in an InnSuites® hotel located in Albuquerque, New Mexico.

RRF LLLP, an IHT subsidiary, manages the Hotels’ daily operations under 2 hotel management agreements. In addition, RRF manages the IBC Hotels, LLC entity, as well. RRF also provides the use of the “InnSuites” trademark to the Hotels. All expenses and reimbursements between the Trust and RRF 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, either of these will be sold. Neither the Tucson Hotel nor the Albuquerque Hotel is currently listed for sale, but the Trust is willing to consider offers for each Hotel. Each of the Hotels is being made available at a price that management believes is reasonable in relation to its current fair market value, earnings, profits, and replacement cost.

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 subsidiaries, as listed in the table below. 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 intercompany transactions and balances have been eliminated.

	IHT OWNERSHIP %
ENTITY	DIRECT			INDIRECT (i)
Albuquerque Suite Hospitality, LLC		21.90	%		-
Tucson Hospitality Properties, LLLP		-			51.75	%
RRF Limited Partnership		75.89	%		-

(i) Tucson 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. On July 31, 2025 and January 31, 2025, 211,755 Class A Partnership units were issued and outstanding, representing 1.60% of the total Partnership units, respectively. Additionally, as of July 31, 2025 and January 31, 2025, 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, representing 22.51% ownership in the Partnership. If all the Class A and B Partnership units were converted on July 31, 2025 and January 31, 2025, the limited partners in the Partnership would receive 3,174,041 Shares of Beneficial Interest of the Trust. As of July 31, 2025, and January 31, 2025, the Trust owns 10,025,724 general partner units in the Partnership, representing 75.89% of the total Partnership units.

LIQUIDITY

The Trust’s two principal sources of cash to meet its cash requirements is revenues from hotel room/suite sales, and from RRF Management fees. The Trust’s liquidity, including our ability to make distributions to its shareholders, to service debt, and to invest in hotels, independent hotels reservation services, and energy diversification, will depend upon the ability of the Trust and the Partnership’s ability to generate sufficient cash flow from hotel operations and RRF management fees, as well as to generate funds from repayment of intercompany advances, sale of assets, and return on diversification investments.

At a future date, the Trust may receive cash from independent hotel reservation services, and energy operations and/or full or partial refinance or sale of one or both hotels, and/or full or partial sale of its interest in IBC or UniGen diversification investment.

As of July 31, 2025, the Trust had a related party Demand/Revolving Line of Credit/Promissory Note with an amount payable of approximately $1.7 million. The Demand/Revolving Line of Credit/Promissory Note interest at 7.0% per annum, requiring interest only payments, which have been paused. The Demand/Revolving Line of Credit/Promissory Note has a maximum borrowing capacity to $2,000,000, which automatically renews annually. This is a two-way Line of Credit, with both the Trust and an Affiliate lender having access to draw on the credit amount of up to $2,000,000 for either party.

As of July 31, 2025, the Trust had three Revolving lines of Credit totaling $250,000 with the Pima Federal Credit Union. The lines had an approximately $80,000 balance as of July 31, 2025.

With approximately $207,000 of cash, as of July 31, 2025, the availability of approximately $300,000 from the combined $2,000,000 Advance to Affiliate credit facilities, and the $250,000 Revolving Lines of Credit with Pima Federal Credit Union, 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 or more from the date of filing this 10-Q. In addition, management is analyzing strategic options available to the Trust, including the sale or refinance of one or both Hotel properties, sale or refinance of other investments, expansion of financing through the related party note, Demand/Revolving Line of Credit, and potential improved profitability and cash flow from hotels, independent hotels management, reservation services, and energy. 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 in selling properties, merging, improving operations profitability and/or cash flow, 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 raise additional funds from affiliates, to sell or refinance certain of our assets to meet liquidity needs, which may not be on terms that are favorable, or raise additional equity capital.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the Trust in accordance with 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 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, 2025, are not necessarily indicative of the results that may be expected for the Fiscal Year ending January 31, 2026. 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, 2025.

The Trust has evaluated subsequent events through the date of the filing of its Q1 and Q2 Form 10-Q with the Securities and Exchange Commission. The Trust changed Auditors and Transfer Agents in the 2025 Second Fiscal Quarter (May 1, 2024 to July 31, 2024). Other than those events disclosed including a new push into independent hotel reservations and services, and fluctuation in tariffs, economics, or business activity, the Company 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 the general partner of the Partnership, the Trust exercises unilateral control over the Partnership. Therefore, the financial statements of the Partnership 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 including management activities, and management directly of 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 historically experiences the highest occupancy in the first Fiscal Quarter (the winter high season) and, to a lesser extent, the fourth Fiscal Quarter. The second Fiscal Quarter (summer low season) historically tends to be the lowest occupancy period at this Arizona Hotel. The Hotel located in Albuquerque, New Mexico historically experiences its most profitable periods during the second and third Fiscal Quarters (the summer high season), providing 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 tariff related economic fluctuations, an actual or threatened virus pandemic, terrorist attack, international conflict or trade war, 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.