Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 31, 2015 | Sep. 08, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | INNSUITES HOSPITALITY TRUST | |
Entity Central Index Key | 82,473 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,264,346 | |
Trading Symbol | IHT | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jul. 31, 2015 | Jan. 31, 2015 |
Current Assets: | ||
Cash and Cash Equivalents | $ 300,950 | $ 507,686 |
Accounts Receivable, including $57,868 and $79,366 from related parties and net of Allowance for Doubtful Accounts of $25,944 and $39,045, as of July 31, 2015 and January 31, 2015, respectively | $ 312,024 | 472,350 |
Advances to Affiliates - Related Party | 1,236 | |
Prepaid Expenses and Other Current Assets | $ 160,294 | 151,999 |
Total Current Assets | 773,268 | 1,133,271 |
Hotel Properties, net | 25,680,396 | 25,818,446 |
Property, Plant and Equipment, net | 142,303 | 76,092 |
TOTAL ASSETS | 26,595,967 | 27,027,809 |
Current Liabilities: | ||
Accounts Payable and Accrued Expenses | 2,338,480 | 2,646,840 |
Current Portion of Mortgage Notes Payable, net of Discount of $8,012 as of July 31, 2015 and January 31, 2015, respectively | 5,190,898 | 5,325,583 |
Current Portion of Notes Payable to Banks, net of Discount of $4,500 and $63,474 as of July 31, 2015 and January 31, 2015, respectively | 692,530 | 1,226,626 |
Line of Credit - Related Party | 108,270 | 541,710 |
Current Portion of Other Notes Payable | 217,209 | 469,842 |
Total Current Liabilities | 8,547,387 | 10,210,601 |
Mortgage Notes Payable, net of discount of $62,909 and $66,915 as of July 31, 2015 and January 31, 2015, respectively | 13,578,243 | 13,796,153 |
Other Notes Payable | 21,448 | 55,828 |
TOTAL LIABILITIES | $ 22,147,078 | $ 24,062,582 |
COMMITMENTS AND CONTINGENCIES (SEE NOTE 8) | ||
SHAREHOLDERS' EQUITY | ||
Shares of Beneficial Interest, without par value, unlimited authorization; 16,866,846 and 16,845,846 shares issued and 8,264,346 and 8,265,102 shares outstanding at July 31, 2015 and January 31, 2015, respectively | $ 14,827,601 | $ 13,812,470 |
Treasury Stock, 8,602,500 and 8,580,744 shares held at cost at July 31, 2015 and January 31, 2015, respectively | (12,252,277) | (12,193,491) |
TOTAL TRUST SHAREHOLDERS' EQUITY | 2,575,324 | 1,618,979 |
NON-CONTROLLING INTEREST | 1,873,565 | 1,346,248 |
TOTAL EQUITY | 4,448,889 | 2,965,227 |
TOTAL LIABILITIES AND EQUITY | $ 26,595,967 | $ 27,027,809 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parenthetical) - USD ($) None in scaling factor is -9223372036854775296 | 6 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jan. 31, 2015 | |
Accounts Receivable from Related Parties | $ 57,868 | $ 79,366 | |
Allowance for Doubtful Accounts | $ 25,944 | $ 39,045 | |
Shares of Beneficial Interest, without par value | |||
Shares of Beneficial Interest, Authorized Shares | Unlimited | Unlimited | |
Shares of Beneficial Interest, shares issued | 16,866,846 | 16,845,846 | |
Shares of Beneficial Interest, shares outstanding | 8,264,346 | 8,265,102 | |
Treasury Stock, shares held | 8,602,500 | 8,580,744 | |
Current Portion of Mortgage Notes Payable [Member] | |||
Note Payable, Discount | $ 8,012 | $ 8,012 | |
Current Portion of Notes Payable to Banks [Member] | |||
Note Payable, Discount | 4,500 | 63,474 | |
Mortgage Notes Payable [Member] | |||
Note Payable, Discount | $ 62,909 | $ 66,915 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
REVENUE | ||||
Room | $ 3,185,620 | $ 3,039,230 | $ 7,561,396 | $ 7,229,733 |
Food and Beverage | 213,473 | 177,698 | 626,600 | 571,371 |
Management and Trademark Fees | 42,151 | 62,340 | 128,144 | 144,439 |
Other | 64,564 | 51,063 | 225,879 | 110,858 |
TOTAL REVENUE | 3,505,808 | 3,330,331 | 8,542,019 | 8,056,401 |
OPERATING EXPENSES | ||||
Room | 1,101,535 | 951,717 | 2,269,162 | 2,009,349 |
Food and Beverage | 255,418 | 190,203 | 557,413 | 456,616 |
Telecommunications | 5,738 | 8,117 | 13,199 | 15,904 |
General and Administrative | 919,206 | 980,806 | 1,847,716 | 1,939,369 |
Sales and Marketing | 315,013 | 312,644 | 660,419 | 613,880 |
Repairs and Maintenance | 361,445 | 296,863 | 706,696 | 659,201 |
Hospitality | 249,110 | 195,144 | 508,900 | 472,487 |
Utilities | 327,776 | 352,811 | 645,877 | 656,463 |
Hotel Property Depreciation | 457,482 | 447,911 | 913,751 | 891,952 |
Real Estate and Personal Property Taxes, Insurance and Ground Rent | 199,447 | 204,969 | 381,721 | 450,577 |
Other | 4,354 | 11,043 | 13,830 | 14,891 |
TOTAL OPERATING EXPENSES | 4,196,524 | 3,952,228 | 8,518,684 | 8,180,689 |
OPERATING LOSS | (690,716) | (621,897) | 23,335 | (124,288) |
Interest Income | $ 3 | 3 | $ 7 | 669 |
Interest Income on Advances to Affiliates - Related Party | 2,728 | 2,728 | ||
Interest Income on Note Receivable - Related Party | 1,850 | 1,850 | ||
TOTAL OTHER INCOME | $ 3 | 4,581 | $ 7 | 5,247 |
Interest on Mortgage Notes Payable | 222,203 | 181,574 | 422,376 | 355,204 |
Interest on Notes Payable to Banks | 26,786 | 8,392 | 88,361 | 16,844 |
Interest on Other Notes Payable | 1,764 | 13,089 | 3,852 | 14,505 |
Interest on Line of Credit - Related Party | 6,596 | 5,602 | 8,090 | 5,602 |
TOTAL INTEREST EXPENSE | 257,349 | 208,657 | 522,679 | 392,155 |
CONSOLIDATED NET LOSS BEFORE INCOME TAX PROVISION | (948,062) | (825,973) | (499,337) | (511,196) |
Income Tax Provision | (30,000) | (49,260) | (71,571) | (80,000) |
CONSOLIDATED NET LOSS | (978,062) | (875,233) | (570,908) | (591,196) |
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (217,163) | (28,783) | (16,540) | 193,385 |
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS | $ (760,899) | $ (846,450) | $ (554,368) | $ (784,581) |
NET LOSS PER SHARE - BASIC AND DILUTED | $ (0.09) | $ (0.10) | $ (0.07) | $ (0.09) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 8,265,225 | 8,403,072 | 8,274,317 | 8,391,421 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - 6 months ended Jul. 31, 2015 - USD ($) | Shares of Beneficial Interest [Member] | Treasury Stock [Member] | Trust Shareholder Equity [Member] | Non-Controlling Interest [Member] | Total |
Balance at Jan. 31, 2015 | $ 13,812,470 | $ (12,193,491) | $ 1,618,979 | $ 1,346,248 | $ 2,965,227 |
Balance, shares at Jan. 31, 2015 | 8,265,102 | 8,580,744 | |||
Purchase of Treasury Stock | $ (58,786) | (58,786) | (58,786) | ||
Purchase of Treasury Stock,shares | (21,756) | 21,756 | |||
Shares of Beneficial Interest Issued for Services Rendered | $ 32,640 | 32,640 | 32,640 | ||
Shares of Beneficial Interest Issued for Services Rendered, shares | 21,000 | ||||
Sales of Ownership Interests in Subsidiary, net | 2,570,690 | 2,570,690 | |||
Distribution to Non-Controlling Interests | (487,660) | (487,660) | |||
Reallocation of Non-Controlling Interests and Other | $ 1,536,859 | 1,536,859 | (1,539,173) | (2,314) | |
Net Loss | (554,368) | (554,368) | (16,540) | (570,908) | |
Balance at Jul. 31, 2015 | $ 14,827,601 | $ (12,252,277) | $ 2,575,324 | $ 1,873,565 | $ 4,448,889 |
Balance, shares at Jul. 31, 2015 | 8,264,346 | 8,602,500 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Consolidated Net Loss | $ (570,908) | $ (591,196) |
Adjustments to Reconcile Consolidated Net Loss to Net Cash Provided by Operating Activities: | ||
Stock-Based Compensation | 32,640 | 18,333 |
(Recovery of) Provision For Uncollectible Receivables | (13,101) | 12,007 |
Hotel Property Depreciation | 913,751 | 891,952 |
Amortization of Debt Discounts and Deferred Financing Fees | 61,621 | 42,102 |
Changes in Assets and Liabilities: | ||
Accounts Receivable | 173,427 | 313,399 |
Prepaid Expenses and Other Assets | (8,295) | 135,776 |
Accounts Payable and Accrued Expenses | (308,360) | (379,532) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 280,775 | 442,841 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Improvements and Additions to Hotel Properties | $ (841,912) | (791,969) |
Change in Restricted Cash | $ 88,188 | |
Collections on Advances to Affiliates - Related Party | $ 1,236 | |
NET CASH USED IN INVESTING ACTIVITIES | (840,676) | $ (703,781) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal Payments on Mortgage Notes Payable | $ (358,917) | $ (1,812,030) |
Borrowings on Mortgage Notes Payable | ||
Payments on Notes Payable to Banks | $ (2,659,224) | $ (1,353,070) |
Borrowings on Notes Payable to Banks | 2,067,515 | 1,516,414 |
Payments on Line of Credit - Related Party | (1,519,051) | (654,640) |
Borrowings on Line of Credit - Related Party | $ 1,085,611 | 1,718,504 |
Lendings on Note Receivable - Related Party | (994,311) | |
Lendings on Advances to Affiliates - Related Party | (163,959) | |
Collections on Note Receivable - Related Party | 915,000 | |
Payments on Other Notes Payable | $ (287,013) | (50,824) |
Borrowings on Other Notes Payable | 23,000 | |
Proceeds from Sale of Non-Controlling Ownership Interest in Subsidiary | $ 2,570,690 | $ 1,530,783 |
Fees Paid For Financing Activities | ||
Distributions to Non-Controlling Interest Holders | $ (487,660) | $ (328,266) |
Repurchase of Treasury Stock | (58,786) | (87,638) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 353,165 | 258,963 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (206,736) | (1,977) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 507,686 | 395,903 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 300,950 | $ 393,926 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jul. 31, 2015 | |
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, 2015, InnSuites Hospitality Trust (the Trust, we or our) owns interests directly in and through a partnership interest, five hotels with an aggregate of 843 suites in Arizona, southern California and New Mexico (the Hotels). The Hotels operate under the trade name InnSuites Hotels. Full service hotels often contain upscale full-service facilities with a large volume of full service accommodations, on-site full service restaurant(s), and a variety of on-site amenities such as swimming pools, a health club, childrens activities, ballrooms and on-site conference facilities. Moderate or limited service hotels are small to medium-sized hotel establishments that offer a limited amount of on-site amenities. Most moderate or limited service establishments may still offer full service accommodations but lack leisure amenities such as an on-site restaurant or a swimming pool. We consider one of our Tucson, Arizona hotels and our hotel located in Albuquerque, New Mexico, to be moderate or limited service establishments. All of our other properties are full service hotels. The Trust is the sole general partner of RRF Limited Partnership, a Delaware limited partnership (the Partnership), and owned a 72.11% interest in the Partnership as of July 31, 2015 and January 31, 2015. The Trusts weighted average ownership for the six month period ended July 31, 2015 and 2014 was 72.11% and 72.06%, respectively. As of July 31, 2015, the Partnership owned a 68.09% interest in an InnSuites® hotel located in Tucson, Arizona (Tucson St. Marys), owned a 51.01% interest in another InnSuites® hotel located in Tucson, Arizona, and a 51.65% interest in an InnSuites® hotel located in Ontario, California. As of July 31, 2015, the Trust owned a direct 61.88% interest in a Yuma, Arizona hotel property, and a direct 50.91% interest in an InnSuites® hotel located in Albuquerque, New Mexico. Under certain management agreements, InnSuites Hotels, our subsidiary, manages the Hotels daily operations. The Trust also provides the use of the InnSuites trademark to the Hotels through wholly-owned InnSuites Hotels. All such expenses and reimbursements between the Trust, InnSuites Hotels and the Partnership have been eliminated in consolidation. InnDependent Boutique Collection (IBC, IBC Hotels or IBC Developments), a wholly-owned subsidiary of InnSuites Hospitality Trust, has a network of approximately 6,500 unrelated hotel properties and provides revenue generating services and cost savings solutions to independent boutique hotels subscribing to the IBC system. During the fiscal year ended January 31, 2014, IBC Hotels formed a marketing alliance with the Independent Lodging Industry Association (ILIA). 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 particular limited partner. 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, 2015 and January 31, 2015, 276,131 Class A Partnership units were issued and outstanding, representing 2.09% of the total Partnership units, respectively. Additionally, as of both July 31, 2015 and January 31, 2015, 3,407,938 Class B Partnership units were outstanding to James Wirth, the Trusts Chairman and Chief Executive Officer, and Mr. Wirths affiliates. If all of the Class A and B Partnership units were converted on July 31, 2015, the limited partners in the Partnership would receive 3,684,069 Shares of Beneficial Interest of the Trust. As of July 31, 2015 and January 31, 2015, the Trust owns 9,527,448 general partner units in the Partnership, representing 72.11% of the total Partnership units. LIQUIDITY Our principal source of cash to meet our cash requirements, including distributions to our shareholders, is our share of the Partnerships cash flow, quarterly distributions from the Albuquerque, New Mexico and Yuma, Arizona properties and more recently, sales of non-controlling interests in certain of our Hotels. The Partnerships principal source of cash flow is quarterly distributions from the two Tucson, Arizona properties and Ontario, California property. Our liquidity, including our ability to make distributions to our shareholders, will depend upon our ability and the Partnerships ability to generate sufficient cash flow from hotel operations and sales of non-controlling interests to service our debt. As of July 31, 2015, the Trust had a related party Demand/Revolving Line of Credit/Promissory Note with an amount payable of $108,270. The Demand/Revolving Line of Credit/Promissory Note bears interest at 7.0% per annum and is interest only quarterly. The Demand/Revolving Line of Credit/Promissory Note has a maximum borrowing capacity to $1,000,000, which is available to December 31, 2017. As of September 2, 2015, the outstanding net balance payable on the Demand/Revolving Line of Credit/Promissory Note was $342,270. With the expected continued availability of the $1,000,000 related party Demand/Revolving Line of Credit/Promissory Note, and the refinance or extension of one of our mortgage note payables that is due on December 31, 2017, management believes that it will have enough cash on hand and financing available to meet all of our obligations as they become due for at least the next year. In addition, our management is analyzing other strategic options available to us, including the refinancing of another property or raising additional funds through additional non-controlling interest sales; however, such transactions may not be available on terms that are favorable to the Trust. There can be no assurance that we will be successful in obtaining extensions, 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. BASIS OF PRESENTATION These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information related to the Trusts organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) has been condensed or omitted. The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Trusts annual consolidated financial statements for the year ended January 31, 2015, as filed on Form 10-K. In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to fairly state our financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Trusts Form 10-K for the year ended January 31, 2015. 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. Therefore, the financial statements of the Partnership and InnSuites Hotels are consolidated with 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 three southern Arizona hotels experience their highest occupancy in the first fiscal quarter and, to a lesser extent, the fourth fiscal quarter. The second fiscal quarter tends to be the lowest occupancy period at those three southern Arizona hotels. This seasonality pattern can be expected to cause fluctuations in the Trusts quarterly revenues. The two hotels located in California and 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 Trusts hotel business. The seasonal nature of the Trusts business increases its vulnerability to risks such as 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 occur during the first or fourth fiscal quarters, the adverse impact to the Trusts revenues could likely be greater as a result of its southern Arizona seasonal business. It is too early to determine what the seasonality of the IBC business segment is. The Trust does not anticipate much seasonality due to the diversification of the location of the IBC Hotels. RECENTLY ISSUED ACCOUNTING GUIDANCE In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entitys liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entitys liquidation becomes imminent, financial statements should be prepared under the Liquidation Basis of Accounting. Even if an entitys liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entitys ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in ASU 2014-15 require additional disclosure of information about the relevant conditions and events. The amendments in ASU 2014-15 are effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Trust is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements, but does not expect there to be a material impact at this time. In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standards Codification Topic No. 718, CompensationStock Compensation (ASC 718), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (i) prospectively to all awards granted or modified after the effective date; or (ii) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Trust is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements, but does not expect there to be a material impact at this time. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, ASU 2014-09 provides for the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification Topic No. 605, Revenue Recognition, most industry-specific guidance throughout the industry topics of the Accounting Standards Codification, and some cost guidance related to construction-type and production-type contracts. ASU 2014-09 is effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 31, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Trust is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. This will improve certain areas of consolidation guidance for reporting organizations that are required to evaluate whether to consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. ASU 2015-02 simplifies and improves GAAP by: eliminating the presumption that a general partner should consolidate a limited partnership, eliminating the indefinite deferral of FASB Statement No. 167, thereby reducing the number of Variable Interest Entity (VIE) consolidation models from four to two (including the limited partnership consolidation model) and clarifying when fees paid to a decision maker should be a factor to include in the consolidation of VIEs. ASU 2015-02 will be effective for periods beginning after December 15, 2015. The Trust is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The ASU changes the presentation of debt issuance costs in financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The ASU specifies that issue costs shall be reported in the balance sheet as a direct deduction from the face amount of the note and that amortization of debt issue costs shall also be reported as interest expense. According to the ASUs Basis for Conclusions, debt issuance costs incurred before the associated funding is received (i.e., the debt liability) should be reported on the balance sheet as deferred charges until that debt liability amount is recorded. For public business entities, the guidance in the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For entities other than public business entities, the guidance is effective for fiscal years beginning after December 15, 2015, and interim periods beginning after December 15, 2016. Early adoption is allowed for all entities for financial statements that have not been previously issued. Entities would apply the new guidance retrospectively to all prior periods (i.e., the balance sheet for each period is adjusted). The Trust is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 31, 2015 | |
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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Trusts operations are affected by numerous factors, including the economy, 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 Trusts 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 estimates of future cash flows used to test a long-lived asset for recoverability and the fair values of the long-lived assets. REVENUE RECOGNITION Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition summarizes the SECs views in applying GAAP to revenue recognition in financial statements. SAB No. 104 establishes the SECs view that it is not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence that an arrangement exists; delivery has occurred or services have been rendered; the sellers price to the buyer is fixed or determinable; and collectability is reasonably assured. Further, SAB No. 104 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. We believe that our revenue recognition policies as described below are in compliance with SAB No. 104. 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. 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 hotels include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels and the three hotels owned by affiliates of Mr. Wirth. IBC Development revenues are recognized after services are rendered by the IBC member hotel. 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. Based on our policy, we believe our revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sellers price to the buyer is fixed or determinable, and the collectability of our revenues are reasonably assured. INCOME PER SHARE Basic and diluted income 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 3,684,069 Shares of the Beneficial Interest, as discussed in Note 1. At the beginning of each period, the aggregate weighted-average of these Shares of Beneficial Interest for units of the Partnership would have been 3,684,069 and 3,693,972, respectively. These Shares of Beneficial Interest issuable upon conversion of the Class A and Class B Partnership units were anti-dilutive during the six month period ended July 31, 2015 and 2014. Therefore no reconciliation of basic and diluted income per share is presented. SEGMENT REPORTING During the fourth quarter of fiscal year 2015, the Trust determined that its operations are comprised of two reportable segments, a Hotel Operations & Corporate Overhead segment that has ownership interest in five hotel properties with an aggregate of 843 suites in Arizona, southern California and New Mexico, and the IBC Developments segment serving 6,500 unrelated hotel properties. The Trust has a concentration of assets in the southwest United States, and the southern Arizona market. Consistent with the change in reportable segments, the Trust revised its prior period financial information for the new segment structure. Historical financial information presented in this Form 10-Q reflects this change. On an overall basis, the Trust has elected to only put the costs directly attributable to the IBC Developments in that segment. Included in these costs are sales, marketing and technology development costs. IBC Hotels was formed during the fiscal year ended January 31, 2014. Operating results became significant during the fiscal year ended January 31, 2015. IBC Hotels charges a 10% booking fee which, we believe, increases the independent hotel profits. Competitors of IBC Hotels can charge anywhere from a 30% to 50% booking fee. InnDependent InnCentives, IBCs loyalty program, allows hoteliers to benefit from guests who frequently stay at IBC independent hotels. We are planning significant expansion of IBC Hotels during the next couple of fiscal years as we concentrate our sales and marketing efforts towards consumers, but can provide no assurance that we will be successful. The Chief Operating Decision Maker (CODM), the Trusts CEO, Mr. Wirth, does not see any value in allocating costs for items not directly attributable to the IBC Developments segment for several reasons. The first is that the Trusts base business is the Hotel Operations & Corporate Overhead segment, and the majority of the expenses of the Trust would continue even if the Trust was not in the reservation business. If the Trust were to allocate general expenses to the reservation business based on some allocation method (e.g. on sales), it would not improve the value of segment reporting, it would only serve to make the results of the Hotel Operations & Corporate Overhead segment look better and give investors a false sense of the profitability of the Hotel Operations & Corporate Overhead segment without the IBC Developments segment. The CODM wants to understand the true investment in the reservation business and that result is delivered by allocating only costs directly associated with the IBC Developments segment. By retaining the remainder of costs not associated with the IBC Developments segment in the Hotel Operations& Corporate Overhead segment, the Trust is able to compare the Hotel Operations & Corporate Overhead segment to historical figures where the bulk of the business was only that segment of operations to gauge relative efficiency of the Hotel Operations& Corporate Overhead segment as compared to historical norms. The Trust has chosen to focus its hotel investments in the southwest region of the United States. The CODM does not review assets by geographical region therefore, no income statement or balance sheet information by geographical region is provided. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jul. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 3. STOCK-BASED COMPENSATION TRUSTEE STOCK COMPENSATION For the six months ended July 31, 2015, the Trust recognized expenses of $32,640 related to stock-based compensation. The Trust issued 21,000 restricted shares with a total market value of $57,120 in the first fiscal quarter of fiscal year 2016 as compensation to its four outside Trustees for fiscal year 2016. On a monthly basis through January 31, 2016, these shares vest at a rate of approximately 500 shares for each outside Trustee. The following table summarizes restricted share activity during the six months ended July 31, 2015: Restricted Shares Shares Weighted-Average Per Share Grant Date Fair Value Balance at January 31, 2015 - - Granted 21,000 $ 2.72 Vested (12,000 ) $ 2.72 Forfeited - - Balance of unvested awards at July 31, 2015 9,000 $ 2.72 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 purpose of the 2015 Plan and the awards described below is to promote the interests of the Trust and its shareholders by providing certain employees and members of the Board of Trustees, who are largely responsible for the management and growth of the subsidiary of the Trust, IBC Hotels, LLC, with incentives and rewards to encourage them to continue in the service of the Trust. The Board of Trustees of the Trust approved a Nonqualified Stock Option Agreement (2015 Plan Agreement) to be used for all stock option awards. The 2015 Plan Agreement provides the grantee a four-year option to purchase a set number of Shares of Beneficial Interest of the Trust at an exercise price of $3.50 per share, exercisable to the extent the stock options vest and GAAP pre-tax profits of IBC Hotels, LLC are greater than or equal to the performance objectives described in the 2015 Plan agreement. For purposes of the 2015 Plan Agreement, a Tranche is the number of Shares for which the Stock Option has vested on a particular vesting date. The 2015 Plan Agreement has the following vesting schedule: Tranche Shares for which the Stock Option is Vested Vesting Date A 1/3 5/17/2016 B 1/3 2nd anniversary of the Date of Grant C 1/3 3rd anniversary of the Date of Grant Stock options will become immediately vested in full if, prior to a vesting date (i) the grantee ceases to be employed by the Trust or its subsidiaries by reason of death or disability or (ii) a change of control occurs while the grantee is employed by the Trust or any of its subsidiaries. Vested tranches become exercisable as set forth below to the extent that the GAAP pre-tax profit of IBC Hotels LLC is greater than or equal to the performance objective for the applicable performance period as described below. Performance Period ( Fiscal Year Ending Performance Objective ( GAAP pre-tax profit of IBC Hotels LLC Exercisable Tranche(s) 1/31/2016 $ 60,000 A 1/31/2017 $ 200,000 A and B 1/31/2018 $ 400,000 A, B, and C On February 5, 2015, the Board of Trustees of the Trust granted to Pamela Barnhill, President, Vice Chairperson of the Board of Trustees and Chief Operating Officer of the Trust and IBC Hotels Founder and President, pursuant to the 2015 Plan and 2015 Plan Agreement, an option to purchase of 1,000,000 Shares of Beneficial Interest of the Trust. On April 24, 2015, the Board of Trustees of the Trust granted to James Wirth, Chairman of the Board of Trustees and Chief Executive Officer of the Trust, Marc Berg, Executive Vice President and Trustee and Adam Remis, Chief Financial Officer of the Trust, pursuant to the Trusts 2015 Plan and 2015 Plan Agreement, each an option for the purchase of 60,000 Shares of Beneficial Interest of the Trust. On April 24, 2015, the Board of Trustees of the Trust also granted to each of our Trustees who are expected to continue to serve on the Board of Trustees through the vesting period, each an option to purchase of 10,000 Shares of Beneficial Interest of the Trust as well as to key operational staff options for the purchase Shares of Beneficial Interest. The number of options granted to each key operational staff was based on InnSuites employment history and their direct IBC Hotels involvement. A total of 1,434,500 stock options were granted during the first quarter of fiscal year 2016. The options are subject to shareholder approval. Consistent with ASC 718-10-55-10, compensation cost associated with issuance of these options has not been recognized as shareholder approval is not perfunctory. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jul. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4. RELATED PARTY TRANSACTIONS On January 1, 2012, Tucson Hospitality Properties LLP, a subsidiary of the Trust, entered into a $1,000,000 Demand/Revolving Line of Credit/Promissory Note or Note Receivable with Rare Earth Financial, LLC (Rare Earth), depending on whether amounts are due to or due from Rare Earth. The Demand/Revolving Line of Credit/Promissory Note or Note Receivable bears interest at 7.0% per annum, is interest only quarterly and was set to mature on January 31, 2015. The Demand/Revolving Line of Credit/Promissory Note or Note Receivable was amended on July 1, 2014 to extend the maturity date to March 31, 2015, and increase the maximum borrowing capacity from $1,000,000 to $1,400,000. The Demand/Revolving Line of Credit/Promissory Note or Note Receivable was further amended on October 27, 2014 to increase the maximum borrowing capacity from $1,400,000 to $2,000,000. As of July 31, 2015 the Demand/Revolving Line of Credit/Promissory Note or Note Receivable has been paid in full and is closed. No prepayment penalty existed on the Demand/Revolving Line of Credit/Promissory Note or Note Receivable. On December 1, 2014, the Trust entered into a $1,000,000 net maximum Demand/Revolving Line of Credit/Promissory Note with Rare Earth. The Demand/Revolving Line of Credit/Promissory Note bears interest at 7.0% per annum, is interest only quarterly and matures on December 31, 2017. 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 capacity of $1,000,000. The above Demand/Revolving Line of Credit/Promissory Notes are presented together as one line item on the balance sheet and totaled a payable of $108,270 and $541,710 at July 31, 2015 and January 31, 2015, respectively. As of July 31, 2015 and January 31, 2015, Mr. Wirth and his affiliates held 3,407,938 Class B Partnership units, which represented 25.80% of the total outstanding Partnership units. As of July 31, 2015 and January 31, 2015, Mr. Wirth and his affiliates held 5,953,276 and 6,053,276, respectively, Shares of Beneficial Interest in the Trust, which represented 65.35% and 73.2%, respectively, of the total issued and outstanding Shares of Beneficial Interest. See Related Party Transactions footnote in our Form 10-K Annual Report filed on April 30, 2015 with the Securities Exchange Commission and our Note 6 Sale of Ownership Interests in Subsidiaries. |
Notes Payable
Notes Payable | 6 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | 5. NOTES PAYABLE On May 21, 2014, Tucson Hospitality Properties LLP, a subsidiary of the Trust, entered into a $447,100 business loan, including $25,307 of loan fees, with American Express Bank, FSB (the Tucson Oracle Merchant Agreement) with a maturity date of May 21, 2015. The Tucson Oracle Merchant Agreement includes a loan fee of 6% of the original principal balance of the loan with acceleration provisions upon default. The business loan is secured and paid back with 15% of the Tucson Oracle American Express, VISA and MasterCard merchant receipts received during the loan period. As of July 31, 2015, the business loan balance has been paid in full. On July 24, 2014, Tucson Saint Marys Suite Hospitality LLC, a subsidiary of the Trust, entered into a $451,560 business loan, including $25,560 of loan fees, with American Express Bank, FSB (the St. Marys Merchant Agreement) with a maturity date of July 24, 2015. The St. Marys Merchant Agreement includes a loan fee of 6% of the original principal balance of the loan with acceleration provisions upon default. The business loan is secured and paid back with 17% of the St. Marys American Express, VISA, MasterCard and Discover merchant receipts received during the loan period. As of July 31, 2015, the business loan balance has been paid in full. On August 19, 2014, Ontario Hospitality Properties, LP (Ontario entity), a subsidiary of the Trust, entered into a $477,000 business loan, including $27,000 of loan fees, with American Express Bank, FSB (the Ontario Merchant Agreement) with a maturity date of September 19, 2015. The Ontario Merchant Agreement includes a loan fee of 6% of the original principal balance of the loan with acceleration provisions upon default. The business loan is secured and paid back with 27% of the Ontario American Express, VISA, MasterCard and Discover merchant receipts received during the loan period. As of July 31, 2015, the business loan has been paid in full. On September 16, 2014, Yuma Hospitality Properties Limited Partnership, a subsidiary of the Trust, entered into a $415,520 business loan, including $23,250 of loan fees, with American Express Bank, FSB (the Yuma Merchant Agreement) with a maturity date of September 16, 2015. The Yuma Merchant Agreement includes a loan fee of 6% of the original principal balance of the loan with acceleration provisions upon default. The business loan is secured and paid back with 22% of the Yuma American Express, VISA, MasterCard and Discover merchant receipts received during the loan period. As of July 31, 2015, the business loan balance has been paid in full. On October 24, 2014, Albuquerque Suite Hospitality, LLC, a subsidiary of the Trust, entered into a $318,000 business loan, including $18,000 of loan fees, with American Express Bank, FSB (the Albuquerque Merchant Agreement) with a maturity date of October 24, 2015. The Albuquerque Merchant Agreement includes a loan fee of 6% of the original principal balance of the loan with acceleration provisions upon default. The business loan is secured and paid back with 14% of the Albuquerque American Express, VISA, MasterCard and Discover merchant receipts received during the loan period. As of July 31, 2015, the business loan balance was approximately $97,000. On July 7, 2015 the Trusts revolving bank line of credit agreement, with a credit limit of $600,000, was changed to a four year non-revolving note payable. The non-revolving note payable has a variable interest rate of Wall Street Journal Prime Rate plus a margin of 1% with a floor rate of 5.5%, maturing on July 3, 2019 and monthly payments of $13,978.08. The line is secured by a junior security interest in the Yuma, Arizona property and the Trusts trade receivables. As of July 31, 2015, the non-revolving note payable balance was approximately $600,000. |
Sale of Ownership Interests in
Sale of Ownership Interests in Subsidiaries | 6 Months Ended |
Jul. 31, 2015 | |
Sale Of Ownership Interests In Subsidiaries | |
Sale of Ownership Interests in Subsidiaries | 6. SALE OF OWNERSHIP INTERESTS IN SUBSIDIARIES The Trust has sold non-controlling interests in certain subsidiaries, including Albuquerque Suite Hospitality, LLC (the Albuquerque entity), Tucson Hospitality Properties, LP (the Tucson entity), Ontario Hospitality Properties, LP (Ontario entity), Yuma Hospitality Properties, Limited Partnership (the Yuma entity) which is described in detail in the Form 10-K Annual Report filed with the Securities Exchange Commission on April 30, 2015. Additionally, the Trust has sold non-controlling interest for their Tucson St. Marys Suite Hospitality LLC (the Tucson St. Marys entity). 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 each entity 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 first 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. During the six months ended July 31, 2015, there were no Class A units of the Albuquerque entity sold, no Class B units sold and no Class C units sold at $10,000 per unit. As of July 31, 2015, the Trust held a 50.91% ownership interest, or 279 Class B units, in the Albuquerque entity, Mr. Wirth and his affiliates held a 0.55% interest, or 3 Class C units, and other third parties held a 48.54% interest, or 266 Class A units. As of July 31, 2015, the Albuquerque entity has discretionary Priority Return payments to unrelated unit holders of approximately $186,000, to the Trust of approximately $195,000, and to Mr. Wirth and his affiliates of approximately $2,000 per year payable quarterly for calendar year 2016. During the six months ended July 31, 2015, there were no Class A, B or C units sold of the Tucson entity. As of July 31, 2015 and January 31, 2015, the Partnership held a 51.01% ownership interest, or 404 Class B units, in the Tucson entity, Mr. Wirth and his affiliates held a 1.39% interest, or 11 Class C units, and other parties held a 47.60% interest, or 377 Class A units. As of July 31, 2015, the Tucson entity has discretionary Priority Return payments to unrelated unit holders of approximately $264,000, to the Partnership of approximately $283,000 and to Rare Earth of approximately $8,000 per year payable quarterly for calendar year 2016. During the six months ended July 31, 2015, there was one Class A units of the Ontario entity sold, no Class B units sold and no Class C units sold at $10,000 per unit. As of July 31, 2015, the Partnership held a 51.65% ownership interest, or 498 Class B units, in the Ontario entity, Mr. Wirth and his affiliates held a 3.63% interest through Rare Earth, or 35 Class C units, and other parties held a 44.72% interest, or 431.25 Class A units. As of January 31, 2015, and after the recognition of upward adjustments to certain of the unit holders, as specified by the March 24, 2014 restructuring agreement, the Partnership held a 51.71% ownership interest, or 498 Class B units, in the Ontario entity, Mr. Wirth and his affiliates held a 3.64% interest through Rare Earth, or 35 Class C units, and other parties held a 44.65% interest, or 430 Class A units. As of July 31, 2015 the Ontario entity has discretionary Priority Return payments to unrelated unit holders of approximately $302,000, to the Partnership of approximately $349,000 and to Rare Earth of approximately $25,000 per year payable quarterly for calendar years 2016 and 2017. During the six months ended July 31, 2015, there were 81.90 Class A units sold and 12 Class C units sold of the Yuma entity sold at $10,000 per unit, all of which were sold from the Trust. As of July 31, 2015, the Trust held a 61.88% ownership interest, or 495 Class B units, in the Yuma entity, Mr. Wirth and his affiliates held a 1.63% interest, or 13 Class C units, and other parties held a 36.50% interest, or 292 Class A units. As of January 31, 2015, the Trust held a 73.61% ownership interest, or 588.90 Class B units, in the Tucson entity, Mr. Wirth and his affiliates held a 0.13% interest, or 1 Class C unit, and other parties held a 26.26% interest, or 210.10 Class A units. As of July 31, 2015, the Yuma entity has discretionary Priority Return payments to unrelated unit holders of approximately $204,000, to the Trust of approximately $347,000 and to Rare Earth of approximately $9,000 per year payable quarterly for calendar years 2016, 2017, 2018, 2019 and 2020. On April 24, 2015, the Trust and Partnership entered into a restructuring agreement with Rare Earth to allow for the sale of non-controlling interest units in Tucson St. Marys entity for $10,000 per unit, which operates one of the Tucson, Arizona hotel properties, then wholly-owned by the Partnership. Under the agreement, the Partnership agreed to either purchase or bring in other investors to purchase up to 350 units, which represents approximately 50.07% of the outstanding partnership units , on a post-transaction basis, and the parties agreed to restructure the limited liability agreement of the Tucson, Arizona entity. The Board of Trustees approved this restructuring on April 24, 2015. Under the restructured limited liability agreement, the Partnership was confirmed as the Administrative Member of the Tucson St. Marys entity but Rare Earth could be elected in the future as Administrative Member without consent of the Partnership. All Membership Interests will be entitled to receive priority distributions annually of $700 per $10,000 Interest from May 15, 2015 through April 20, 2020. Priority distributions will be paid first to Class A interests, second to Class B interests, third to Class C interests and will be cumulative. After April 30, 2020, all membership interests will be entitled to annual distributions of $700 per $10,000 Interest, which will be cumulative. Subject to shareholder approval, the holders of Class A units may convert all of part of their investment at any time up to January 31, 2018 into 2,857 Shares of Beneficial Interest for each $10,000 interest subject to shareholder approval and other required approvals (conversion feature). Thereafter each $10,000 interest is convertible into 2,500 Shares of Beneficial Interest of the Trust. On May 30, 2015, the restructuring agreement was amended to clarify the requirement that the shareholders must approve the conversion feature which is not perfunctory. During the six months ended July 31, 2015, there were 64 Class A sold and 100 Class C units sold of the Tucson St. Marys entity. As of July 31, 2015, the Partnership held a 68.09% ownership interest, or 350 Class B units, in the Tucson St. Marys entity, Mr. Wirth and his affiliates held a 19.46% interest, or 100 Class C units, and other parties held a 12.45% interest, or 64 Class A units. As of July 31, 2015, the Tucson St. Marys entity has discretionary Priority Return payments to unrelated unit holders of approximately $45,000, to the Partnership of approximately $245,000 and to Rare Earth of approximately $70,000 per year payable quarterly for calendar years 2016, 2017, 2018, 2019 and 2020. |
Statements of Cash Flows, Suppl
Statements of Cash Flows, Supplemental Disclosures | 6 Months Ended |
Jul. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Statements of Cash Flows, Supplemental Disclosures | 7. STATEMENTS OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES The Trust paid $522,679 and $392,155 in cash for interest for the six months ended July 31, 2015 and 2014, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES The Albuquerque Hotel is subject to a non-cancelable ground lease. The Albuquerque Hotel non-cancelable ground lease was extended on January 14, 2014 and expires in 2058. Total expense associated with the non-cancelable ground lease for the three months ended July 31, 2015 and 2014 was $64,243 and $65,869, respectively. During 2010, the Trust entered into a five-year office lease for its corporate headquarters. On April 30, 2014, the lease was extended for 36 months and expires in 2017. The Trust recorded $13,195 and $16,700 of general and administrative expense related to the lease during the six months ended July 31, 2015 and 2014, respectively. The lease included a base rent charge of $31,994 for the first lease year beginning in fiscal year 2014, with annual increases to a final year base rent of $34,120 for lease year ending in fiscal year 2017. The Trust has the option to cancel the lease after each lease year for penalties of four months rent after the first year with the penalty decreasing by one months rent each successive lease year. It is the Trusts intention to remain in the office for the duration of the lease period, as extended. Future minimum lease payments under the non-cancelable ground leases and office lease are as follows: Fiscal Year Ending Remainder of FY 2016 $ 71,679 FY 2017 144,335 FY 2018 127,725 FY 2019 113,508 FY 2020 113,508 FY 2021 113,508 Thereafter 5,700,329 Total $ 6,384,592 The Trust is obligated under a loan agreement relating to the Tucson Oracle property to deposit 4% of the individual hotels 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 not reported on the Trusts Consolidated Balance Sheet as Restricted Cash as the balance was $0 as of July 31, 2015 and January 31, 2015. InnSuites Hotels has entered into membership agreements with Best Western International, Inc. (Best Western) with respect to four of the Hotels. In exchange for use of the Best Western name, trademark and reservation system, the participating 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 participating Hotels. The agreements with Best Western have no specific expiration terms and may be cancelled by either party. Best Western requires that the participating 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 $165,000 and $178,000 for the six months ended July 31, 2015 and 2014, respectively. 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 consolidated financial position, results of operations or liquidity of the Trust. 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 Trusts consolidated financial position, results of operations or liquidity. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | 9. SEGMENT REPORTING In the fourth quarter of fiscal year 2015, the Trust determined that its reportable segments are the Hotel Operations & Corporate Overhead and IBC Developments segments. Reportable segments are determined based on discrete financial information reviewed by the Trusts CODM. The Trust organizes and reviews operations based on products and services, and currently there are no operating segments that are aggregated. Consistent with the change in reportable segments, the Trust revised its prior period financial information for the new segment structure. Historical financial information presented in this Form 10-Q reflects this change. Information relative to the Trusts reportable segments, for which there is no intersegment revenues, is as follows: STATEMENT OF OPERATIONS SIX MONTHS ENDED JULY 31, 2015 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 8,408,811 $ 133,208 $ 8,542,019 Income (Loss) From Operations 113,376 (90,041 ) 23,335 STATEMENT OF OPERATIONS SIX MONTHS ENDED JULY 31, 2014 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 8,047,448 $ 8,953 $ 8,056,401 Income (Loss) From Operations (44,271 ) (80,017 ) (124,288 ) STATEMENT OF OPERATIONS THREE MONTHS ENDED JULY 31, 2015 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 3,486,797 $ 19,011 $ 3,505,808 Loss From Operations (586,632 ) (104,084 ) (690,716 ) STATEMENT OF OPERATIONS THREE MONTHS ENDED JULY 31, 2014 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 3,331,054 $ (723 ) $ 3,330,331 Loss From Operations (559,285 ) (62,612 ) (621,897 ) |
Possible Sale of Tucson Saint M
Possible Sale of Tucson Saint Mary's Suite Hospitality Property | 6 Months Ended |
Jul. 31, 2015 | |
Possible Sale Of Tucson Saint Marys Suite Hospitality Property | |
Possible Sale of Tucson Saint Mary's Suite Hospitality Property | 10. Possible sale of Tucson Saint Marys Suite Hospitality Property On July 1, 2015, Tucson Saint Marys Suite Hospitality LLC, a subsidiary of the Trust, entered into a Real Estate Purchase Agreement (Sale Agreement) to sell its Hotel Tucson City Center InnSuites property to Lee & J Hospitality, Inc, (Buyer) an unrelated third party to the Trust for $9.65 million with an estimated close prior to September 30, 2015 subject to the Trusts Board of Trustees approval, financing contingencies and the Buyers property review to be completed which was completed prior to July 21, 2015. As of September 1, 2015, the buyers financing is not guaranteed and escrow funds have not been deemed non-refundable. There can be no assurance that the sale of this property will be completed on the terms currently contemplated in the Sale Agreement, prior to or on the estimated closing date, or at all. Hotel operations continue at that property. Sale of one asset is not deemed a strategic shift in the direction of the Trust. Consistent to FASB ASU No. 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, the assets was not characterized as a discontinued operation. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jul. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. SUBSEQUENT EVENTS On August 11, 2015, the Trust through one of its subsidiaries, Tucson Saint Marys Suite Hospitality, LLC obtained a Loan Extension on its first trustee mortgage to October 28, 2015. All other terms of the agreement remain the same. Guarantors are James F. Wirth, CEO, IHT and RRF Limited Partnership. Management anticipates refinancing this note with Hanmi Bank (Lender) or selling the property prior to October 28, 2015. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 31, 2015 | |
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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Trusts operations are affected by numerous factors, including the economy, 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 Trusts 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 estimates of future cash flows used to test a long-lived asset for recoverability and the fair values of the long-lived assets. |
Revenue Recognition | REVENUE RECOGNITION Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition summarizes the SECs views in applying GAAP to revenue recognition in financial statements. SAB No. 104 establishes the SECs view that it is not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence that an arrangement exists; delivery has occurred or services have been rendered; the sellers price to the buyer is fixed or determinable; and collectability is reasonably assured. Further, SAB No. 104 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. We believe that our revenue recognition policies as described below are in compliance with SAB No. 104. 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. 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 hotels include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels and the three hotels owned by affiliates of Mr. Wirth. IBC Development revenues are recognized after services are rendered by the IBC member hotel. 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. Based on our policy, we believe our revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sellers price to the buyer is fixed or determinable, and the collectability of our revenues are reasonably assured. |
Income Per Share | INCOME PER SHARE Basic and diluted income 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 3,684,069 Shares of the Beneficial Interest, as discussed in Note 1. At the beginning of each period, the aggregate weighted-average of these Shares of Beneficial Interest for units of the Partnership would have been 3,684,069 and 3,693,972, respectively. These Shares of Beneficial Interest issuable upon conversion of the Class A and Class B Partnership units were anti-dilutive during the six month period ended July 31, 2015 and 2014. Therefore no reconciliation of basic and diluted income per share is presented. |
Segment Reporting | SEGMENT REPORTING During the fourth quarter of fiscal year 2015, the Trust determined that its operations are comprised of two reportable segments, a Hotel Operations & Corporate Overhead segment that has ownership interest in five hotel properties with an aggregate of 843 suites in Arizona, southern California and New Mexico, and the IBC Developments segment serving 6,500 unrelated hotel properties. The Trust has a concentration of assets in the southwest United States, and the southern Arizona market. Consistent with the change in reportable segments, the Trust revised its prior period financial information for the new segment structure. Historical financial information presented in this Form 10-Q reflects this change. On an overall basis, the Trust has elected to only put the costs directly attributable to the IBC Developments in that segment. Included in these costs are sales, marketing and technology development costs. IBC Hotels was formed during the fiscal year ended January 31, 2014. Operating results became significant during the fiscal year ended January 31, 2015. IBC Hotels charges a 10% booking fee which, we believe, increases the independent hotel profits. Competitors of IBC Hotels can charge anywhere from a 30% to 50% booking fee. InnDependent InnCentives, IBCs loyalty program, allows hoteliers to benefit from guests who frequently stay at IBC independent hotels. We are planning significant expansion of IBC Hotels during the next couple of fiscal years as we concentrate our sales and marketing efforts towards consumers, but can provide no assurance that we will be successful. The Chief Operating Decision Maker (CODM), the Trusts CEO, Mr. Wirth, does not see any value in allocating costs for items not directly attributable to the IBC Developments segment for several reasons. The first is that the Trusts base business is the Hotel Operations & Corporate Overhead segment, and the majority of the expenses of the Trust would continue even if the Trust was not in the reservation business. If the Trust were to allocate general expenses to the reservation business based on some allocation method (e.g. on sales), it would not improve the value of segment reporting, it would only serve to make the results of the Hotel Operations & Corporate Overhead segment look better and give investors a false sense of the profitability of the Hotel Operations & Corporate Overhead segment without the IBC Developments segment. The CODM wants to understand the true investment in the reservation business and that result is delivered by allocating only costs directly associated with the IBC Developments segment. By retaining the remainder of costs not associated with the IBC Developments segment in the Hotel Operations& Corporate Overhead segment, the Trust is able to compare the Hotel Operations & Corporate Overhead segment to historical figures where the bulk of the business was only that segment of operations to gauge relative efficiency of the Hotel Operations& Corporate Overhead segment as compared to historical norms. The Trust has chosen to focus its hotel investments in the southwest region of the United States. The CODM does not review assets by geographical region therefore, no income statement or balance sheet information by geographical region is provided. |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Shares Activity | The following table summarizes restricted share activity during the six months ended July 31, 2015: Restricted Shares Shares Weighted-Average Per Share Grant Date Fair Value Balance at January 31, 2015 - - Granted 21,000 $ 2.72 Vested (12,000 ) $ 2.72 Forfeited - - Balance of unvested awards at July 31, 2015 9,000 $ 2.72 |
Schedule of Stock Option Vested | The 2015 Plan Agreement has the following vesting schedule: Tranche Shares for which the Stock Option is Vested Vesting Date A 1/3 5/17/2016 B 1/3 2nd anniversary of the Date of Grant C 1/3 3rd anniversary of the Date of Grant |
Schedule of Performance Objective for Applicable Performance Period | Vested tranches become exercisable as set forth below to the extent that the GAAP pre-tax profit of IBC Hotels LLC is greater than or equal to the performance objective for the applicable performance period as described below. Performance Period ( Fiscal Year Ending Performance Objective ( GAAP pre-tax profit of IBC Hotels LLC Exercisable Tranche(s) 1/31/2016 $ 60,000 A 1/31/2017 $ 200,000 A and B 1/31/2018 $ 400,000 A, B, and C |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under the non-cancelable ground leases and office lease are as follows: Fiscal Year Ending Remainder of FY 2016 $ 71,679 FY 2017 144,335 FY 2018 127,725 FY 2019 113,508 FY 2020 113,508 FY 2021 113,508 Thereafter 5,700,329 Total $ 6,384,592 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments | Information relative to the Trusts reportable segments, for which there is no intersegment revenues, is as follows: STATEMENT OF OPERATIONS SIX MONTHS ENDED JULY 31, 2015 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 8,408,811 $ 133,208 $ 8,542,019 Income (Loss) From Operations 113,376 (90,041 ) 23,335 STATEMENT OF OPERATIONS SIX MONTHS ENDED JULY 31, 2014 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 8,047,448 $ 8,953 $ 8,056,401 Income (Loss) From Operations (44,271 ) (80,017 ) (124,288 ) STATEMENT OF OPERATIONS THREE MONTHS ENDED JULY 31, 2015 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 3,486,797 $ 19,011 $ 3,505,808 Loss From Operations (586,632 ) (104,084 ) (690,716 ) STATEMENT OF OPERATIONS THREE MONTHS ENDED JULY 31, 2014 Hotel Operations & Corporate Overhead IBC Developments Total Total Revenue $ 3,331,054 $ (723 ) $ 3,330,331 Loss From Operations (559,285 ) (62,612 ) (621,897 ) |
Nature of Operations and Basi22
Nature of Operations and Basis of Presentation (Details Narrative) | 6 Months Ended | 12 Months Ended | |
Jul. 31, 2015USD ($)Integershares | Jul. 31, 2014 | Jan. 31, 2015USD ($)Integershares | |
Number of hotels | Integer | 5 | ||
Number of suites | Integer | 843 | ||
Percentage of total partnership units | 50.10% | ||
Number of shares of beneficial interest received by limited partners on if converted basis | shares | 3,684,069 | ||
Line of credit drawn | $ 1,000,000 | ||
Due to related parties, current | 108,270 | $ 541,710 | |
Trust [Member] | |||
Line of credit drawn | 1,000,000 | ||
Due to related parties, current | $ 108,270 | ||
Debt interest rate | 7.00% | ||
Trust [Member] | September 2, 2015 [Member] | |||
Due to related parties, current | $ 342,270 | ||
Trust [Member] | December 31, 2017 [Member] | |||
Line of credit drawn | $ 2,000,000 | ||
Line of credit maturity date | Dec. 31, 2017 | ||
Class A Limited Partnership Units [Member] | |||
Partnership unit issued | shares | 276,131 | 276,131 | |
Partnership unit outstanding | shares | 276,131 | 276,131 | |
Percentage of total partnership units | 2.09% | 2.09% | |
Class B Partnership Units [Member] | James Wirth [Member] | |||
Partnership unit outstanding | shares | 3,407,938 | 3,407,938 | |
InnSuites Hotel Located in Yuma, Arizona [Member] | |||
Percentage of Ownership Interest Held by the Trust | 61.88% | ||
InnSuites Hotel Located in Albuquerque New Mexico [Member] | |||
Percentage of Ownership Interest Held by the Trust | 50.91% | ||
RRF Limited Partnership [Member] | Inn Suites Hotel Located in Tucson Arizona One [Member] | |||
Partnership ownership interest percentage | 68.09% | ||
RRF Limited Partnership [Member] | Inn Suites Hotel Located in Tucson Arizona Two [Member] | |||
Partnership ownership interest percentage | 51.01% | ||
RRF Limited Partnership [Member] | InnSuites Hotel Located in Ontario California [Member] | |||
Partnership ownership interest percentage | 51.65% | ||
RRF Limited Partnership [Member] | Weighted Average [Member] | |||
Percentage of Ownership Interest Held by the Trust | 72.11% | 72.06% | |
IBC Hotels [Member] | |||
Number of real estate properties | Integer | 6,500 | 6,500 | |
General Partner [Member] | |||
Partnership ownership interest percentage | 72.11% | 72.11% | |
Number of partnership units | shares | 9,527,448 | 9,527,448 | |
General Partner [Member] | RRF Limited Partnership [Member] | |||
Percentage of Ownership Interest Held by the Trust | 72.11% | 72.11% |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Narrative) | 6 Months Ended | 12 Months Ended | |
Jul. 31, 2015USD ($)Integershares | Jul. 31, 2014USD ($) | Jan. 31, 2015Integer | |
Number of shares of beneficial interest received by limited partners on if converted basis | shares | 3,684,069 | ||
Aggregate weighted average shares of beneficial for units of partnership | $ | $ 3,684,069 | $ 3,693,972 | |
Number of reportable segments | 2 | ||
Number of hotels | 5 | ||
Number of suites | 843 | ||
IBC Hotels [Member] | |||
Number of real estate properties | 6,500 | 6,500 | |
Percentage of booking fee | 10.00% | ||
Competitors Of IBC Hotels [Member] | Minimum [Member] | |||
Percentage of booking fee | 30.00% | ||
Competitors Of IBC Hotels [Member] | Maximum [Member] | |||
Percentage of booking fee | 50.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | Apr. 24, 2015 | Feb. 05, 2015 | Jul. 31, 2015 | Jul. 31, 2014 |
Stock-based compensation expenses | $ 32,640 | $ 18,333 | ||
Stock based compensation vested shares | 500 | |||
Stock option granted shares | 1,434,500 | |||
Trustee Stock Compensation [Member] | ||||
Issuance of restricted stock, shares | 21,000 | |||
Issuance of restricted stock, market value | $ 57,120 | |||
Board of Trustees [Member] | 2015 Plan Agreement [Member] | ||||
Stock option grantee period | 4 years | |||
Shares of beneficial interest of trust exercise price per share | $ 3.50 | |||
Shares of beneficial interest of trust option | 10,000 | |||
Board of Trustees [Member] | 2015 Plan Agreement [Member] | Pamela Barnhill [Member] | ||||
Shares of beneficial interest of trust option | 1,000,000 | |||
Board of Trustees [Member] | 2015 Plan Agreement [Member] | Adam Remis [Member] | ||||
Shares of beneficial interest of trust option | 60,000 | |||
Board of Trustees [Member] | 2015 Equity Incentive Plan [Member] | ||||
Shares of beneficial interest of trust are authorized to issued | 1,600,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Shares Activity (Details) - 6 months ended Jul. 31, 2015 - Restricted Stock [Member] - $ / shares | Total |
Number of Options Beginning Balance | |
Nember of Option Granted | 21,000 |
Number of Options Vested | (12,000) |
Number of Options Forfeited | |
Number of Options Ending Balance | 9,000 |
Weighted-Average Exercise Price Per Share Beginning Balance | |
Weighted-Average Exercise Price Per Share Granted | $ 2.72 |
Weighted-Average Exercise Price Per Share Vested | $ 2.72 |
Weighted-Average Exercise Price Per Share Forfeited | |
Weighted-Average Exercise Price Per Share Ending Balance | $ 2.72 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Vested (Details) | 6 Months Ended |
Jul. 31, 2015 | |
Tranche A [Member] | |
Shares for which the Stock Option is Vested | 1/3 |
Vesting date | May 17, 2016 |
Tranche B [Member] | |
Shares for which the Stock Option is Vested | 1/3 |
Vesting Date Description | 2nd anniversary of the Date of Grant |
Tranche C [Member] | |
Shares for which the Stock Option is Vested | 1/3 |
Vesting Date Description | 3rd anniversary of the Date of Grant |
Stock-Based Compensation - Sc27
Stock-Based Compensation - Schedule of Performance Objective for Applicable Performance Period (Details) - 6 months ended Jul. 31, 2015 - IBC Hotels LLC [Member] - USD ($) | Total |
Exercisable Tranche A [Member] | |
Performance Period | Jan. 31, 2016 |
Performance objective | $ 60,000 |
Exercisable Tranche A and B[Member] | |
Performance Period | Jan. 31, 2017 |
Performance objective | $ 200,000 |
Exercisable Tranche A, B and C [Member] | |
Performance Period | Jan. 31, 2018 |
Performance objective | $ 400,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 01, 2014 | Jan. 01, 2012 | Jul. 31, 2015 | Jan. 31, 2015 | Oct. 27, 2014 | Jul. 01, 2014 |
Line of credit maximum borrowing capacity | $ 1,000,000 | |||||
Line of credit related party balance | $ 108,270 | $ 541,710 | ||||
Mr. Wirth and Affiliates [Member] | ||||||
Number of shares held for beneficial interest of trust | 5,953,276 | 6,053,276 | ||||
Percentage of shares issued and outstanding of beneficial interest | 65.35% | 73.20% | ||||
Mr. Wirth and Affiliates [Member] | Class B Limited Partnership Units [Member] | ||||||
Number of partnership unit held for affiliates | 3,407,938 | 3,407,938 | ||||
Percentage of outstanding Partnership units | 25.80% | 25.80% | ||||
Rare Earth Financial, LLC [Member] | ||||||
Debt face value | $ 1,000,000 | $ 1,000,000 | ||||
Line of credit related party bears interest rate | 7.00% | 7.00% | ||||
Line of credit related party maturity date | Dec. 31, 2017 | Jan. 31, 2015 | ||||
Line of credit maximum borrowing capacity | $ 1,000,000 | |||||
Rare Earth Financial, LLC [Member] | Minimum [Member] | ||||||
Line of credit maximum borrowing capacity | $ 1,400,000 | $ 1,000,000 | ||||
Rare Earth Financial, LLC [Member] | Maximum [Member] | ||||||
Line of credit maximum borrowing capacity | $ 2,000,000 | $ 1,400,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jul. 07, 2015 | Oct. 24, 2014 | Sep. 16, 2014 | Aug. 19, 2014 | Jul. 24, 2014 | May. 21, 2014 | Jul. 31, 2015 |
Line of credit limit | $ 1,000,000 | ||||||
Non-revolving note payable | 600,000 | ||||||
Revolving Bank Line of Credit Agreement [Member] | |||||||
Line of credit limit | $ 600,000 | ||||||
Line of credit maturity date | Jul. 3, 2019 | ||||||
Monthly payment of debt | $ 13,978 | ||||||
Revolving Bank Line of Credit Agreement [Member] | Prime Rate [Member] | |||||||
Line of credit bear interest rate | 1.00% | ||||||
Revolving Bank Line of Credit Agreement [Member] | Interest Floor Rate [Member] | |||||||
Line of credit bear interest rate | 5.50% | ||||||
Tucson Hospitality Properties LLP [Member] | Tucson Oracle Merchant Agreement [Member] | |||||||
Proceeds from business loans | $ 447,100 | ||||||
Loan fees | $ 25,307 | ||||||
Debt maturity date | May 21, 2015 | ||||||
Percentage of loan fee on original principal balance of loan | 6.00% | ||||||
Loan paid back percentage | 15.00% | ||||||
Tucson Saint Mary's Suite Hospitality LLC [Member] | St. Mary's Merchant Agreement [Member] | |||||||
Proceeds from business loans | $ 451,560 | ||||||
Loan fees | $ 25,560 | ||||||
Debt maturity date | Jul. 24, 2015 | ||||||
Percentage of loan fee on original principal balance of loan | 6.00% | ||||||
Loan paid back percentage | 17.00% | ||||||
Ontario Hospitality Properties LP [Member] | Ontario Merchant Agreement [Member] | |||||||
Proceeds from business loans | $ 477,000 | ||||||
Loan fees | $ 27,000 | ||||||
Debt maturity date | Sep. 19, 2015 | ||||||
Percentage of loan fee on original principal balance of loan | 6.00% | ||||||
Loan paid back percentage | 27.00% | ||||||
Yuma Hospitality Properties Limited Partnership [Member] | Yuma Merchant Agreement [Member] | |||||||
Proceeds from business loans | $ 415,520 | ||||||
Loan fees | $ 23,250 | ||||||
Debt maturity date | Sep. 16, 2015 | ||||||
Percentage of loan fee on original principal balance of loan | 6.00% | ||||||
Loan paid back percentage | 22.00% | ||||||
Albuquerque Suite Hospitality, LLC [Member] | Albuquerque Merchant Agreement [Member] | |||||||
Proceeds from business loans | $ 318,000 | ||||||
Loan fees | $ 18,000 | ||||||
Debt maturity date | Oct. 24, 2015 | ||||||
Percentage of loan fee on original principal balance of loan | 6.00% | ||||||
Loan paid back percentage | 14.00% | ||||||
Business loan balance | $ 97,000 |
Sale of Ownership Interests i30
Sale of Ownership Interests in Subsidiaries (Details Narrative) - USD ($) | Jan. 31, 2015 | Jul. 31, 2015 | Jan. 31, 2015 | Apr. 24, 2015 |
Sale price per unit | $ 10,000 | |||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 50.10% | |||
Restructuring Agreement [Member] | ||||
Sale price per unit | $ 10,000 | |||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 50.07% | |||
Cumulative priority distributions per unit per year | $ 700 | |||
Number of units were available for sale | 350 | |||
Interest income | $ 10,000 | |||
Conversion of unit, description | shareholder approval, the holders of Class A units may convert all of part of their investment at any time up to January 31, 2018 into 2,857 Shares of Beneficial Interest for each $10,000 interest subject to shareholder approval and other required approvals (conversion feature). | |||
Conversion feature, number of shares converted | 2,500 | |||
Ontario Hospitality Properties LP [Member] | ||||
Sale price per unit | $ 10,000 | |||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 51.71% | |||
Yuma Hospitality Properties LP [Member] | ||||
Sale price per unit | $ 10,000 | |||
Calendar Years 2016 [Member] | Ontario Hospitality Properties LP [Member] | ||||
Estimated annual minimum preference payments | $ 25,000 | |||
Calendar Years 2017 [Member] | Ontario Hospitality Properties LP [Member] | ||||
Estimated annual minimum preference payments | $ 25,000 | |||
Mr. Wirth and Affiliates [Member] | Ontario Hospitality Properties LP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 3.63% | |||
Unrelated Unit Holders [Member] | Ontario Hospitality Properties LP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 44.65% | |||
Estimated annual minimum preference payments | $ 302,000 | |||
Partnership [Member] | Ontario Hospitality Properties LP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 51.65% | |||
Estimated annual minimum preference payments | $ 349,000 | |||
Rare Earth [Member] | Ontario Hospitality Properties LP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 3.64% | |||
Estimated annual minimum preference payments | $ 25,000 | |||
Other Parties Holders [Member] | Ontario Hospitality Properties LP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 44.72% | |||
Albuquerque Suite Hospitality, LLC [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 50.91% | |||
Albuquerque Suite Hospitality Properties LLC [Member] | Mr. Wirth and Affiliates [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 0.55% | |||
Estimated annual minimum preference payments | $ 2,000 | |||
Albuquerque Suite Hospitality Properties LLC [Member] | Unrelated Unit Holders [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 48.54% | |||
Estimated annual minimum preference payments | $ 186,000 | |||
Albuquerque Suite Hospitality Properties LLC [Member] | The Trust [Member] | ||||
Estimated annual minimum preference payments | $ 195,000 | |||
Tucson Hospitality Properties LLP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 51.01% | |||
Tucson Hospitality Properties LLP [Member] | Calendar Years 2016 [Member] | ||||
Estimated annual minimum preference payments | $ 8,000 | |||
Tucson Hospitality Properties LLP [Member] | Mr. Wirth and Affiliates [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 1.39% | |||
Tucson Hospitality Properties LLP [Member] | Unrelated Unit Holders [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 47.60% | |||
Estimated annual minimum preference payments | $ 264,000 | |||
Tucson Hospitality Properties LLP [Member] | Partnership [Member] | ||||
Estimated annual minimum preference payments | 283,000 | |||
Tucson Hospitality Properties LLP [Member] | Rare Earth [Member] | ||||
Estimated annual minimum preference payments | 8,000 | |||
Yuma Hospitality Properties LP [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 61.88% | |||
Yuma Hospitality Properties LP [Member] | Calendar Years 2016 [Member] | ||||
Estimated annual minimum preference payments | 9,000 | |||
Yuma Hospitality Properties LP [Member] | Calendar Years 2017 [Member] | ||||
Estimated annual minimum preference payments | 9,000 | |||
Yuma Hospitality Properties LP [Member] | Calendar Years 2018 [Member] | ||||
Estimated annual minimum preference payments | 9,000 | |||
Yuma Hospitality Properties LP [Member] | Calendar Years 2019 [Member] | ||||
Estimated annual minimum preference payments | 9,000 | |||
Yuma Hospitality Properties LP [Member] | Calendar Years 2020 [Member] | ||||
Estimated annual minimum preference payments | $ 9,000 | |||
Yuma Hospitality Properties LP [Member] | Mr. Wirth and Affiliates [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 0.13% | 1.63% | ||
Yuma Hospitality Properties LP [Member] | Unrelated Unit Holders [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 26.26% | 36.50% | ||
Estimated annual minimum preference payments | $ 204,000 | |||
Yuma Hospitality Properties LP [Member] | The Trust [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 73.61% | |||
Estimated annual minimum preference payments | 347,000 | |||
Yuma Hospitality Properties LP [Member] | Rare Earth [Member] | ||||
Estimated annual minimum preference payments | 9,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | General Partner [Member] | ||||
Estimated annual minimum preference payments | 245,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Calendar Years 2016 [Member] | ||||
Estimated annual minimum preference payments | 70,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Calendar Years 2017 [Member] | ||||
Estimated annual minimum preference payments | 70,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Calendar Years 2018 [Member] | ||||
Estimated annual minimum preference payments | 70,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Calendar Years 2019 [Member] | ||||
Estimated annual minimum preference payments | 70,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Calendar Years 2020 [Member] | ||||
Estimated annual minimum preference payments | 70,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Rare Earth [Member] | ||||
Estimated annual minimum preference payments | 70,000 | |||
Tucson Saint Mary's Suite Hospitality LLC [Member] | Unrelated Unitsholders [Member] | ||||
Estimated annual minimum preference payments | $ 45,000 | |||
Class C Limited Partnership Units [Member] | ||||
Cumulative priority distributions per unit per year | $ 700 | |||
Class C Limited Partnership Units [Member] | Ontario Hospitality Properties LP [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 35 | 35 | 35 | |
Class C Limited Partnership Units [Member] | Albuquerque Suite Hospitality, LLC [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 3 | |||
Class C Limited Partnership Units [Member] | Tucson Hospitality Properties LLP [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 11 | |||
Class C Limited Partnership Units [Member] | Yuma Hospitality Properties LP [Member] | ||||
Number of units sold during period | 12 | |||
Number of partnership units | 1 | 13 | 1 | |
Class C Limited Partnership Units [Member] | Tucson Saint Mary's Suite Hospitality LLC [Member] | ||||
Number of units sold during period | 100 | |||
Class C Limited Partnership Units [Member] | Tucson Saint Mary's Suite Hospitality LLC [Member] | Mr. Wirth and Affiliates [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 19.46% | |||
Number of partnership units | 100 | |||
Class A Limited Partnership Units [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 2.09% | 2.09% | ||
Class A Limited Partnership Units [Member] | Ontario Hospitality Properties LP [Member] | ||||
Number of units sold during period | 1 | |||
Number of partnership units | 430 | 431.25 | 430 | |
Class A Limited Partnership Units [Member] | Albuquerque Suite Hospitality, LLC [Member] | ||||
Sale price per unit | $ 10,000 | |||
Number of units sold during period | 0 | |||
Number of partnership units | 266 | |||
Class A Limited Partnership Units [Member] | Tucson Hospitality Properties LLP [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 377 | |||
Class A Limited Partnership Units [Member] | Yuma Hospitality Properties LP [Member] | ||||
Number of units sold during period | 81.90 | |||
Number of partnership units | 210.10 | 292 | 210.10 | |
Class A Limited Partnership Units [Member] | Tucson Saint Mary's Suite Hospitality LLC [Member] | ||||
Number of units sold during period | 64 | |||
Class A Limited Partnership Units [Member] | Tucson Saint Mary's Suite Hospitality LLC [Member] | Other Parties Hold [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 12.45% | |||
Number of partnership units | 64 | |||
Class B Limited Partnership Units [Member] | Ontario Hospitality Properties LP [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 498 | 498 | 498 | |
Class B Limited Partnership Units [Member] | Albuquerque Suite Hospitality, LLC [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 279 | |||
Class B Limited Partnership Units [Member] | Tucson Hospitality Properties LLP [Member] | ||||
Number of units sold during period | 0 | |||
Number of partnership units | 404 | |||
Class B Limited Partnership Units [Member] | Yuma Hospitality Properties LP [Member] | ||||
Number of partnership units | 495 | |||
Class B Limited Partnership Units [Member] | Yuma Hospitality Properties LP [Member] | Tucson Hospitality Properties LLP [Member] | ||||
Number of partnership units | 588.90 | 588.90 | ||
Class B Limited Partnership Units [Member] | Tucson Saint Mary's Suite Hospitality LLC [Member] | ||||
Percentage of membership interest in a subsidiary committed to purchase by an affiliate | 68.09% | |||
Number of partnership units | 350 |
Statements of Cash Flows, Sup31
Statements of Cash Flows, Supplemental Disclosures (Details Narrative) - USD ($) | 6 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 522,679 | $ 392,155 |
Commitments and Contingencies32
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Jan. 31, 2015 | |
General and administrative expense related to the lease | $ 919,206 | $ 980,806 | $ 1,847,716 | $ 1,939,369 | |
Restricted cash balance | $ 0 | ||||
Membership fees and reservation amount | $ 165,000 | 178,000 | |||
Albuquerque Hotel [Member] | |||||
Lease expiration date extended | Jan. 14, 2014 | ||||
Ground lease expiration year | 2,058 | ||||
Lease expense | $ 64,243 | $ 65,869 | |||
Loan term | 5 years | ||||
Corporate Headquarters [Member] | |||||
Ground lease expiration year | 2,017 | ||||
Loan term | 36 months | ||||
General and administrative expense related to the lease | $ 13,195 | $ 16,700 | |||
First Lease Year Beginning In Fiscal Year 2014 [Member] | |||||
Lease expense | 31,994 | ||||
Lease Year Ending In Fiscal Year 2017 [Member] | |||||
Lease expense | $ 34,120 | ||||
Tucson Foothills [Member] | |||||
Percentage of partnership interest | 4.00% | 4.00% | |||
Restricted cash balance | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Jul. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of FY 2016 | $ 71,679 |
FY 2,017 | 144,335 |
FY 2,018 | 127,725 |
FY 2,019 | 113,508 |
FY 2,020 | 113,508 |
FY 2,021 | 113,508 |
Thereafter | 5,700,329 |
Total | $ 6,384,592 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Reportable Segments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Total Revenue | $ 3,505,808 | $ 3,330,331 | $ 8,542,019 | $ 8,056,401 |
Income (Loss) From Operations | (690,716) | (621,897) | 23,335 | (124,288) |
Hotel Operations And Corporate Overhead [Member] | ||||
Total Revenue | 3,486,797 | 3,331,054 | 8,408,811 | 8,047,448 |
Income (Loss) From Operations | (586,632) | (559,285) | 113,376 | (44,271) |
IBC Developments [Member] | ||||
Total Revenue | 19,011 | (723) | 133,208 | 8,953 |
Income (Loss) From Operations | $ (104,084) | $ (62,612) | $ (90,041) | $ (80,017) |
Possible Sale of Tucson Saint35
Possible Sale of Tucson Saint Mary's Suite Hospitality Property (Details Narrative) | 6 Months Ended |
Jul. 31, 2015USD ($) | |
Possible Sale Of Tucson Saint Marys Suite Hospitality Property Details Narrative | |
Proceeds from sale of property | $ 9,650,000 |
Uncategorized Items - iht-20150
Label | Element | Value |
Hotel Property Depreciation | us-gaap_DepreciationNonproduction | $ 447,911 |
Hotel Property Depreciation | us-gaap_DepreciationNonproduction | 457,482 |
Net Loss | us-gaap_ProfitLoss | (875,233) |
Net Loss | us-gaap_ProfitLoss | $ (978,062) |