Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 13, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-09240 | |
Entity Registrant Name | INCOME OPPORTUNITY REALTY INVESTORS, INC. | |
Entity Central Index Key | 0000949961 | |
Entity Tax Identification Number | 75-2615944 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1603 Lyndon B. Johnson Freeway | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75234 | |
City Area Code | 469 | |
Local Phone Number | 522-4200 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | IOR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,168,414 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 5 | $ 2 |
Interest receivable from related parties | 330 | 591 |
Receivable from related parties | 97,177 | 96,300 |
Total current assets | 97,512 | 96,893 |
Non-current assets | ||
Notes receivable from related parties | 11,173 | 11,173 |
Total assets | 108,685 | 108,066 |
Liabilities: | ||
Accounts payable | 5 | 12 |
Shareholders' equity | ||
Common stock, $0.01 par value, 10,000,000 shares authorized; 4,173,675 shares issued and 4,168,414 outstanding | 42 | 42 |
Treasury stock at cost, 5,261 shares | (39) | (39) |
Additional paid-in capital | 61,955 | 61,955 |
Retained earnings | 46,722 | 46,096 |
Total shareholders’ equity | 108,680 | 108,054 |
Total liabilities and equity | $ 108,685 | $ 108,066 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 10,000,000 | 10,000,000 |
Common stock, issued | 4,173,675 | 4,173,675 |
Common stock, outstanding | 4,168,414 | 4,168,414 |
Treasury stock | 5,261 | 5,261 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Other income | ||
Expenses: | ||
General and administrative (including $89 and $107 for the three months ended March 31, 2022 and 2021, respectively, from related parties) | 192 | 188 |
Advisory fee to related party | 268 | 336 |
Total operating expenses | 460 | 524 |
Net operating loss | (460) | (524) |
Interest income from related parties | 1,252 | 1,218 |
Other income | 1,017 | |
Income tax provision | (166) | (359) |
Net income | $ 626 | $ 1,352 |
Earnings per share - basic | $ 0.15 | $ 0.32 |
Earnings per share - diluted | $ 0.15 | $ 0.32 |
Weighted average common shares used in computing earnings per share | 4,168,414 | 4,168,414 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
General and administrative, related parties | $ 89 | $ 107 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance at Dec. 31, 2020 | $ 42 | $ (39) | $ 61,955 | $ 42,498 | $ 104,456 |
Net income | 1,352 | 1,352 | |||
Ending balance at Mar. 31, 2021 | 42 | (39) | 61,955 | 43,850 | 105,808 |
Beginning balance at Dec. 31, 2021 | 42 | (39) | 61,955 | 46,096 | 108,054 |
Net income | 626 | 626 | |||
Ending balance at Mar. 31, 2022 | $ 42 | $ (39) | $ 61,955 | $ 46,722 | $ 108,680 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flow From Operating Activities: | ||
Net income | $ 626 | $ 1,352 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Recovery of doubtful accounts | (1,017) | |
Changes in assets and liabilities, net of dispositions: | ||
Accrued interest on related party notes receivable | 261 | 474 |
Related party receivables | (877) | (3,781) |
Accounts payable | (7) | (10) |
Net cash provided by (used in) operating activities | 3 | (2,982) |
Cash Flow From Investing Activities: | ||
Collection of notes receivable | 2,970 | |
Net cash provided by investing activities | 2,970 | |
Net increase (decrease) in cash and cash equivalents | 3 | (12) |
Cash and cash equivalents, beginning of the period | 2 | 12 |
Cash and cash equivalents, end of the period | $ 5 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Income Opportunity Investors, Inc. (the “Company”) is an externally managed company that invests in mortgage notes receivables. As used herein, the terms “IOR”, “the Company”, “We”, “Our”, or “Us” refer to the Company. Transcontinental Realty Investors, Inc. (“TCI”), whose common stock is traded on the NYSE under the symbol “TCI”, owns 81.1 87.6 78.4 Our business is managed by Pillar Income Asset Management, Inc. (“Pillar”) in accordance with an Advisory Agreement that is reviewed annually by our Board of Directors. Pillar is considered to be related parties (See Note 4 – Related Party Transactions). Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities. Pillar also arranges our debt and equity financing with third party lenders and investors. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The consolidated balance sheet at December 31, 2021 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. Certain 2021 consolidated financial statement amounts have been reclassified to conform to the current presentation. We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights. We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations. |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Notes Receivable | 3. Notes Receivable The following table summarizes our notes receivables at March 31, 2022 and 2021: Carrying Value Borrower / Project March 31, December 31, Interest Maturity United Housing Foundation ( Echo Station $ 1,481 $ 1,481 12.00 % 12/31/2032 United Housing Foundation ( Lakeshore Villas 2,000 2,000 12.00 % 12/31/2032 United Housing Foundation ( Lakeshore Villas 6,369 6,369 12.00 % 12/31/2032 United Housing Foundation ( Timbers of Terrell 1,323 1,323 12.00 % 12/31/2032 $ 11,173 $ 11,173 The borrower is determined to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable. Principal and interest payments on the notes from Unified Housing Foundation, Inc. (“UHF”) are funded from surplus cash flow from operations, sale or refinancing of the underlying properties and are cross collateralized to the extent that any surplus cash available from any of the properties underlying the notes. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4. Related Party Transactions We engage in certain business transactions with related parties, including investment in notes receivables. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities. Related party transactions may not always be favorable to our business and may include terms, conditions and agreements that are not necessarily beneficial to or in our best interest. Pillar is a wholly owned by an affiliate of May Realty Holdings, Inc., which owns approximately 90.8 78.4 81.1 Advisory fees paid to Pillar were $ 268 336 Notes receivable are amounts held by UHF (See Note 3 – Notes Receivable). UHF is determined to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable. Interest income on these notes was $ 331 361 Interest income on related party receivables from TCI was $ 921 857 Related party receivables represents amounts outstanding from TCI for loans and advances, net of unreimbursed fees, expenses and costs as provided above. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies We believe that we will generate excess cash from operations in the next twelve months; such excess, however, might not be sufficient to discharge all of obligations as they become due. We intend to sell income-producing assets and obtain additional borrowings to meet our liquidity requirements to meet any cash deficiency. In February 2019, we were charged in a lawsuit brought by Paul Berger (“Berger”) against us and others that alleges that we completed improper sales and/or transfers of property with TCI. Berger requests that TCI pay off various related party loans to us and that we then distribute the funds to our shareholders. We intend to vigorously defend against the allegations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 6. Subsequent Events The date to which events occurring after March 31, 2022, the date of the most recent balance sheet, have been evaluated for possible adjustment to the consolidated financial statements or disclosure is May 13, 2022, which is the date on which the consolidated financial statements were available to be issued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The consolidated balance sheet at December 31, 2021 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. Certain 2021 consolidated financial statement amounts have been reclassified to conform to the current presentation. We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights. We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
The following table summarizes our notes receivables at March 31, 2022 and 2021: | The following table summarizes our notes receivables at March 31, 2022 and 2021: Carrying Value Borrower / Project March 31, December 31, Interest Maturity United Housing Foundation ( Echo Station $ 1,481 $ 1,481 12.00 % 12/31/2032 United Housing Foundation ( Lakeshore Villas 2,000 2,000 12.00 % 12/31/2032 United Housing Foundation ( Lakeshore Villas 6,369 6,369 12.00 % 12/31/2032 United Housing Foundation ( Timbers of Terrell 1,323 1,323 12.00 % 12/31/2032 $ 11,173 $ 11,173 |
Organization (Details Narrative
Organization (Details Narrative) | Mar. 31, 2022 |
Transcontinental Realty Investors Inc [Member] | |
Percentage of ownership | 81.10% |
Transcontinental Realty Investors Inc and Affiliates [Member] | Common Stock [Member] | |
Percentage of ownership | 87.60% |
American Realty Investors, Inc. [Member] | Transcontinental Realty Investors, Inc. [Member] | |
Percentage of ownership | 78.40% |
The following table summarizes
The following table summarizes our notes receivables at March 31, 2022 and 2021: (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Carrying Value | $ 11,173 | $ 11,173 |
Unified Housing Foundation, Inc. (Echo Station) [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Description of property | Echo Station | |
Carrying Value | $ 1,481 | 1,481 |
Interest Rate | 12.00% | |
Maturity Date | Dec. 31, 2032 | |
Unified Housing Foundation, Inc. (Lakeshore Villas) [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Description of property | Lakeshore Villas | |
Carrying Value | $ 2,000 | 2,000 |
Interest Rate | 12.00% | |
Maturity Date | Dec. 31, 2032 | |
Unified Housing Foundation, Inc. (Lakeshore Villas) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Description of property | Lakeshore Villas | |
Carrying Value | $ 6,369 | 6,369 |
Interest Rate | 12.00% | |
Maturity Date | Dec. 31, 2032 | |
Unified Housing Foundation, Inc. (Timbers of Terrell) [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Description of property | Timbers of Terrell | |
Carrying Value | $ 1,323 | $ 1,323 |
Interest Rate | 12.00% | |
Maturity Date | Dec. 31, 2032 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Advisor fees paid | $ 268 | $ 336 |
Interest income from related parties | $ 1,252 | 1,218 |
May Realty Holdings, Inc. [Member] | American Realty Investors, Inc. | ||
Related Party Transaction [Line Items] | ||
Percentage of ownership | 90.80% | |
American Realty Investors, Inc. [Member] | Transcontinental Realty Investors, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Percentage of ownership | 78.40% | |
Transcontinental Realty Investors Inc [Member] | ||
Related Party Transaction [Line Items] | ||
Percentage of ownership | 81.10% | |
Interest income from related parties | $ 921 | 857 |
Pillar [Member] | ||
Related Party Transaction [Line Items] | ||
Advisor fees paid | 268 | 336 |
Unified Housing Foundation, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Interest income from related parties | $ 331 | $ 361 |