UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

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FORM 10-Q

 

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QUARTERLY REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2014

 

Commission File Number 1-7062

 

INNSUITES HOSPITALITY TRUST

(Exact name of registrant as specified in its charter)

 

Ohio		34-6647590
(State or other jurisdiction of		(I.R.S. Employer Identification Number)
incorporation or organization)
InnSuites Hotels Centre
1625 E. Northern Avenue, Suite 105
Phoenix, AZ 85020
(Address of principal executive offices)
Registrant’s telephone number, including area code: (602) 944-1500

 

Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or l5(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ☒ Yes     ☐ No

 

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

 

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☒

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

 

Number of outstanding Shares of Beneficial Interest, without par value, as of December 5, 2014: 8,279,458

 

 

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

See accompanying notes to unaudited

condensed consolidated financial statements

 

 

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

See accompanying notes to unaudited

condensed consolidated financial statements

 

 

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

See accompanying notes to unaudited

condensed consolidated financial statements

 

 

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED OCTOBER 31, 2014

 

 

 

 

 

See accompanying notes to unaudited

condensed consolidated financial statements

 

 

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

See accompanying notes to unaudited

condensed consolidated financial statements

 

 

INNSUITES HOSPITALITY TRUST AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF OCTOBER 31, 2014 AND JANUARY 31, 2014

AND FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2014 AND 2013

 

 

 

 

 

 

 

 

 

 

 

 

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

 

GENERAL

 

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and our Form 10-K for the year ended January 31, 2014.

 

Our principal source of cash to meet our cash requirements, including our distributions, is our share of the Partnership’s cash flow and cash flows from the Albuquerque, New Mexico property and the Yuma, Arizona property, and more recently, sales of non-controlling interests in certain of our Hotels.  The Partnership’s principal source of cash flows is from Hotel operations for the one hotel property it owns and from its partial ownership of the Tucson, Arizona and Ontario, California properties.  Our liquidity, including our ability to make distributions to our shareholders, will depend upon our ability and the Partnership’s ability to generate sufficient cash flow from Hotel operations and to service our debt.

 

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

In our Annual Report on Form 10-K for the year ended January 31, 2014, we identified the critical accounting policies that affect our more significant estimates and assumptions used in preparing our condensed consolidated financial statements. We believe that the policies we follow for the valuation of our Hotel properties, which constitute the majority of our assets, are our most critical policies. Those policies include methods used to recognize and measure any identified impairment of our Hotel property assets. There have been no material changes to our critical accounting policies since January 31, 2014.

 

HOTEL PROPERTIES

 

Our long-term strategic plan is to obtain the full benefit of our real estate equity and to migrate our focus from a hotel owner to a hospitality service company by expanding our trademark license, management, reservation, and advertising services, through IBC Hotels, a wholly owned subsidiary of the Trust. As of October 31, 2014, IBC Hotels has a network of approximately 6,500 hotels. Revenues and expenses of IBC Hotels are not significant and not separately reported.

 

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.  We anticipate the IBC Hotels sales and marketing efforts to increase our revenues and increase our consolidated net income over the next couple of fiscal years. For each reservation, IBC Hotels receives a 10% transactional fee plus reimbursement of our credit card processing fees associated with the reservation.

 

This plan is similar to strategies followed by internationally diversified hotel industry leaders, which over the last several years have reduced real estate holdings and concentrated on hospitality services. We began our long-term corporate strategy when we relinquished our REIT income tax status in January 2004, which had previously prevented us from providing management services to hotels. In June 2004, we acquired our trademark license and management agreements and began providing management, trademark and reservations services to our Hotels.

 

We expect to use proceeds from the sale of the Hotels, if any, as needed to support hospitality service operations as cash flow from current operations, primarily the rental of hotel rooms, declines with the sale of the Hotels.

 

The table below lists the Hotel properties, their respective carrying and mortgage value and the listed asking price for the hotel properties.

 

Hotel Property		Book Value				Mortgage Balance				Listed Asking Price
Albuquerque		$	1,222,775			$	-			$	6,600,000
Ontario			5,602,110				5,667,623				14,200,000
Tucson Oracle			3,982,249				750,663				11,900,000
Tucson City Center			7,400,406				4,894,578				11,900,000
Yuma			5,219,472				5,264,809				12,900,000
		$	23,427,012			$	16,577,673			$	57,500,000

 

The listed asking price is the amount at which we would sell each of the Hotels and is based on the original listed selling price adjusted to reflect recent hotel sales in the areas of operation of the Hotels and current earnings of each of the Hotels. The listed asking price is not based on appraisals of the properties.

 

There is no assurance that the listed sales price for the individual Hotel properties will be realized.  However, our management believes that these values are reasonable based on local market conditions and comparable sales. Changes in market conditions have in part resulted, and may in the future result, in our changing one or all of the listed asking prices.

 

COMPLIANCE WITH CONTINUED LISTING STANDARDS OF NYSE MKT

 

On January 8, 2013, the Trust received a letter from the NYSE MKT LLC (f/k/a AMEX) (the "NYSE MKT") informing the Trust that the staff of the NYSE MKT’s Corporate Compliance Department has determined that the Trust is not in compliance with Section 1003(a)(ii) of the NYSE MKT Company Guide due to the Trust having stockholders' equity of less than $4.0 million and losses from continuing operations in three of its four most recent fiscal years.

 

 

The Trust was afforded the opportunity to submit a plan of compliance to the NYSE MKT and submitted its plan on February 5, 2013. On March 21, 2013, the NYSE MKT notified the Trust that it accepted the Trust’s plan of compliance and granted the Trust an extension until April 30, 2014 to regain compliance with the continued listing standards.

 

On May 2, 2013, the Trust received another letter from the NYSE MKT informing the Trust that the Trust is not in compliance with an additional continued listing standard of the NYSE MKT, Section 1003(a)(iii) of the NYSE MKT Company Guide, due to the Trust having stockholders’ equity of less than $6.0 million and net losses in five consecutive fiscal years as of January 31, 2013. The plan submitted in response to the first letter received increased stockholders’ equity in excess of $6.0 million before the April 30, 2014 deadline; therefore, the Trust was not required to submit an additional plan to regain compliance with the continued listing standards.

 

On December 16, 2013, the Trust requested an extension of the plan period. Based on a review of information provided by the Trust, on January 10, 2014, the NYSE MKT granted the Trust an extension of time to regain compliance with the NYSE MKT continued listing standards until July 8, 2014.

 

On January 31, 2014, both the Audit Committee of the Board of Trustees and the independent members of the Board of Trustees met in separate meetings to discuss the potential purchase of 51% of the partnership interests of Fort Worth/Dallas Suite Hospitality Partnership by the Trust and other potential ideas to increase the Trust’s equity to meet the NYSE MKT’s shareholders’ equity requirements. The Fort Worth/Dallas Suite Hospitality Partnership is controlled by Mr. Wirth and his affiliates. During both meetings, the participants concluded that the combination of our 51% purchase of Fort Worth/Dallas Partnership and additional syndication of our Tucson, Albuquerque and Ontario entities were the most cost effective way to meet the NYSE MKT’s shareholders’ equity requirements.

 

On February 3, 2014, the Audit Committee of the Board of Trustees met to review and discuss the draft Purchase Agreement for the Fort Worth/Dallas Suite Hospitality Partnership and the implications of this purchase to our shareholders. Due to Mr. Wirth’s and his family members’ interests in the Fort Worth/Dallas Suite Hospitality Partnership, the Audit Committee of the Board of Trustees concluded that this transaction was a related party transaction, considered such transaction in accordance with our Related Party Transactions Policy, and determined that it was fair to the Trust and its shareholders. The independent Trustees of our Board also met on February 3, 2014. Both the Audit Committee and the independent Trustees of our Board concluded that purchase price of Fort Worth/Dallas Suite Hospitality Partnership, which is based on the audited book value as of January 31, 2014, is significantly less than the market value of the Hotel Trinity property. The Audit Committee of the Board of Trustees recommended, by unanimous vote, to our Board of Trustees to approve our purchase of 51% of the partnership interests of Fort Worth/Dallas Suite Hospitality Partnership recognizing that the transaction is with a related party. On February 3, 2014, the independent members of our Board of Trustees voted unanimously to approve this acquisition, subject to the consent of a lender of Fort Worth/Dallas Suite Hospitality Partnership to the acquisition and shareholder approval of the issuance of our Shares of Beneficial Interest as consideration for the acquisition, which was approved at our annual meeting in June 2014. The lender has consented to the acquisition.

 

On March 24, 2014, the Trust entered into the Purchase Agreement with Fort Worth/Dallas Suite Hospitality Partnership, an affiliate of Mr. Wirth, our Chairman of the Board of Trustees, Chief Executive Officer and largest shareholder, to purchase 51% of the partnership interests of Fort Worth/Dallas Suite Hospitality Partnership, upon the terms and conditions set forth in the Purchase Agreement. The Purchase Agreement was unanimously approved by our Audit Committee and by our independent Trustees. In addition, the RRF Limited Partnership Agreement was amended to facilitate thais acquisition by eliminating the requirement for the Trust to contribute its 51% of the partnership interests of Fort Worth/Dallas Suite Hospitality Partnership, when and if acquired, to the Partnership in exchange of additional general partner interests in the Partnership.

 

On June 27, 2014, the Trusts’ Shareholders approved the issuance of Shares of Beneficial Interest of the Trust as consideration for the acquisition of 51% of the partnership interests of Fort Worth/Dallas Suite Hospitality Partnership. After completion of the Shareholder Meeting on June 27, 2014, the independent Trustees jointly with Hotel Trinity’s seller, Suite Hotels, LLC, elected not to have the Trust complete the acquisition of Hotel Trinity at this time pending further Board of Trustee review. 

 

On June 27, 2014, the Trust received another letter from the NYSE MKT informing the Trust that the Trust is not in compliance with continued listing standards of the NYSE MKT, Section 1003(a)(ii) and Section 1003(a) (iii) of the NYSE MKT Company Guide, due to the Trust having stockholders’ equity of less than $4.0 million and $6.0 million, respectively, as of April 30, 2014, and net losses in five consecutive fiscal years as of January 31, 2014. The Trust was informed by the NYSE MKT that a significant portion of the Trust’s non-controlling interest may not be used in its compliance calculation. The Trust was afforded the opportunity to submit a plan to the NYSE MKT by July 29, 2014 (the “plan period”) on how it intends to regain compliance with Section 1003(a)(ii) and 1003(a)(iii) by June 27, 2015. On July 24, 2014, the Trust submitted a plan to the NYSE MKT for its review and approval and subsequently provided additional information to the NYSE MKT.

 

 

On September 19, 2014, the NYSE MKT notified the Trust that it is not in compliance with Section 1003(a)(i) of the NYSE MKT Company Guide since it reported Stockholders’ Equity of less than $2.0 million at July 31, 2014 and has incurred losses in two of its three fiscal years ended January 31, 2014. The NYSE has accepted Trusts’ equity expansion compliance plan and has granted the Trust an extension of time until December 29, 2015 to comply with Sections 1003(a)(i), 1003(a)(ii) and 1003(a)(iii) of the NYSE MKT Company Guide.

 

The Trust will continue to be subject to periodic reviews by the NYSE MKT’s staff during this period. Failure to make progress consistent with the Plan or regain compliance with all continued listing standards of the NYSE MKT by the end of the plan period could result in the Trust being delisted from the NYSE MKT.

 

NON-GAAP FINANCIAL MEASURES

 

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

 

Adjusted EBITDA is defined as earnings before non-controlling interest, interest expense, amortization of loan costs, interest income, income taxes, depreciation and amortization. We present Adjusted EBITDA because we believe these measurements (a) more accurately reflect the ongoing performance of our hotel assets and other investments, (b) provide more useful information to investors as indicators of our ability to meet our future debt payment and working capital requirements, and (c) provide an overall evaluation of our financial condition. Adjusted EBITDA as calculated by us may not be comparable to Adjusted EBITDA reported by other companies that do not define Adjusted EBITDA exactly as we define the term. Adjusted EBITDA does not represent cash generated from operating activities determined in accordance with GAAP and should not be considered as an alternative to (a) GAAP net income or loss as an indication of our financial performance or (b) GAAP cash flows from operating activities as a measure of our liquidity.

 

A reconciliation of Adjusted EBITDA to net income attributable to controlling interests for the nine months and three months ended October 31, 2014 and 2013 follows:

 

		Nine Months Ended October 31,
		2014				2013
Net loss attributable to controlling interests		$	(1,380,029	)		$	(846,455	)
Add back:
Depreciation			1,332,530				1,333,765
Interest expense			555,287				605,855
Non-controlling interest			117,782				199,737
Taxes			80,000				-
Less:
Interest income			(8,403	)			(1,816	)
ADJUSTED EBITDA		$	697,167			$	1,291,086
		Three Months Ended October 31,
		2014				2013
Net loss attributable to controlling interests		$	(595,448	)		$	(611,023	)
Add back:
Depreciation			440,578				434,284
Interest expense			163,131				208,858
Non-controlling interest			(75,603	)			(108,339	)
Taxes			-				-
Less:
Interest income			(3,156	)			(5	)
ADJUSTED EBITDA		$	(70,498	)		$	(76,225	)

 

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

 

 

A reconciliation of FFO to net income attributable to controlling interests for the nine months and three months ended October 31, 2014 and 2013 follows:

 

		Nine Months Ended October 31,
		2014				2013
Net loss attributable to controlling interest		$	(1,380,029	)		$	(846,455	)
Add back:
Loss on Disposal of Assets			-				14,486
Depreciation			1,332,530				1,333,765
Non-controlling interest			117,782				199,737
FFO		$	70,283			$	701,533
		Three Months Ended October 31,
		2014				2013
Net loss attributable to controlling interest		$	(595,448	)		$	(611,023	)
Add back:
Loss on Disposal of Assets			-				7,954
Depreciation			440,578				434,284
Non-controlling interest			(75,603	)			(108,339	)
FFO		$	(230,473	)		$	(277,124	)

 

 

RESULTS OF OPERATIONS

 

Our expenses consist primarily of hotel operating expenses, property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees and depreciation of the Hotels. Our operating performance is principally related to the performance of the Hotels. Therefore, management believes that a review of the historical performance of the operations of the Hotels, particularly with respect to occupancy, calculated as rooms sold divided by the number of rooms available, average daily rate (“ADR”), calculated as total room revenue divided by number of rooms sold, and revenue per available room (“REVPAR”), calculated as total room revenue divided by the number of rooms available, is appropriate for understanding revenue from the Hotels. Occupancy was 65.10% for the nine months ended October 31, 2014, a decrease of 1.52% from the prior year period. ADR increased $1.02 to $67.46. The decreased occupancy and stable ADR resulted in a slight decrease of $0.34 in REVPAR to $43.92 from $44.26 in the prior year period. The decrease in occupancy is directly related to our economic pressures in our Yuma, Arizona market.

 

The following table shows occupancy, ADR and REVPAR for the period indicated:

  

		For the Nine Months Ended
		October 31,
		2014				2013
Occupancy			65.10%				66.61%
Average Daily Rate (ADR)		$	67.46			$	66.44
Revenue Per Available Room (REVPAR)		$	43.92			$	44.26

 

The methodology to calculate the Occupancy, Average Daily Rate (ADR) and Revenue Per Available Room (REVPAR) has changed for those figures originally presented at October 31, 2013. The October 31, 2013 figures were originally calculated using a non-weighted average approach, as presented in the October 31, 2013 filing. Management has restated the October 31, 2013 figures using a weighted average approach, which considers the number of rooms in each hotel. As such, the October 31, 2013 and 2014 figures are consistent with one another as presented.

 

 

No assurance can be given that the trends reflected in this data will be maintained or improve or that occupancy, ADR or REVPAR will not decrease as a result of changes in national or local economic or hospitality industry conditions. We expect the economic conditions to positively affect our business levels for the remainder of this current fiscal year.

 

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED OCTOBER 31, 2014 COMPARED TO THE NINE MONTHS ENDED OCTOBER 31, 2013

 

A summary of the operating results for the nine months ended October 31, 2014 and 2013 is:

  

		2014				2013				Change				% Change
Total Revenues		$	11,235,257			$	11,262,314			$	(27,057	)			-0.2	%
Operating Expenses			(11,870,620	)			(11,304,993	)			565,627				5.0	%
Operating Loss			(635,363	)			(42,679	)			(592,684	)			1388.7	%
Interest Income			8,403				1,816				6,587				362.7	%
Interest Expense			(555,287	)			(605,855	)			(50,568	)			-8.3	%
Income Tax Provision			(80,000	)			-				80,000				100.0	%
Consolidated Net Loss		$	(1,262,247	)		$	(646,718	)		$	(615,529	)			-95.2	%

 

For the nine months ended October 31, 2014 compared to the nine months ended October 31, 2013, our revenues were approximately $11,235,000 and $11,262,000, respectively, a decrease of approximately $27,000 or 0.2%. Revenues from hotel operations decreased during the first nine months of fiscal year 2015 as compared to the same period during fiscal year 2014 due to minimal decreases in occupancy levels and relatively flat daily rates. The decrease in occupancy is directly related to our economic pressures in our Yuma, Arizona market.

 

Our operating expenses increased by approximately $566,000 to approximately $11,871,000 during the first nine months of fiscal year 2015, compared to approximately $11,305,000 during the first nine months of fiscal year 2014. While revenues remained relatively consistent with prior-year, management elected to perform additional deep cleanings of rooms which resulted in approximately $84,000 of additional expenditures during the first nine months of fiscal year 2015 as compared to the first nine months of fiscal year 2014. Our food and beverage expenses decreased by approximately $27,000 to approximately $664,000 during the first nine months of fiscal year 2015 compared to the first nine months of fiscal year 2014 as management closely monitored food and beverage expenses. Our general and administrative expenses increased to approximately $2,646,000 from approximately $2,460,000 during the first nine months of fiscal year 2015 as compared to the first nine months of fiscal year 2014 due to additional accounts receivable write-offs, a settlement of an Americans with Disabilities Act claim, increases in credit card processing fees and an increase in Best Western administration expenditures.

 

Operating loss was approximately ($635,000) for the nine months ended October 31, 2014 as compared to approximately ($43,000) for the nine months ended October 31, 2013, a decrease of approximately $593,000. The change was primarily due to slight decrease of revenues and an increase in operating expenses. Management is evaluating opportunities to reduce its general and administration, sales and marketing, utilities and room expenses to control operating expenses.

 

      Our interest expense was approximately $555,000 for the first nine months of fiscal year 2015 as compared to approximately $606,000 for the first six months of fiscal year 2014, a decrease of approximately $51,000 due to the payoff of our Albuquerque property mortgage, and refinancing of our Ontario, California property. Due to the Trust sales of non-controlling interests, the income tax provision was $80,000 during the first nine months of fiscal year 2015 as compared to $0 for the first nine month of fiscal year 2014.

 

Consolidated net loss was approximately ($1,262,000) for the first nine months of fiscal year 2015 and approximately ($647,000) for the first nine months of fiscal year 2014, a net loss increase of approximately $615,000. This net loss increase was primarily caused by steady revenues and an increased amount of operating expenses.

 

Net loss attributable to controlling interest was approximately ($1,380,000) during the first nine months of fiscal year 2015 as compared to approximately ($846,000) for first nine months of fiscal year 2014, an increase of approximately $533,000, or ($0.16) per share during the first nine months of fiscal year 2015 as compared to ($0.10) per share during the prior year period. The change is primarily due to additional ownership in the hotels belonging to non-controlling interest and a greater net loss for the first nine months of fiscal year 2015 as compared to the first nine months of fiscal year 2014.

 

 

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 2014 COMPARED TO THE THREE MONTHS ENDED OCTOBER 31, 2013

 

A summary of the operating results for the three months ended October 31, 2014 and 2013 is:

  

		2014				2013				Change				% Change
Total Revenues		$	3,178,856			$	3,039,104			$	139,752				4.6	%
Operating Expenses			(3,689,932	)			(3,549,613	)			140,319				4.0	%
Operating Loss			(511,076	)			(510,509	)			(567	)			-0.1	%
Interest Income			3,156				5				3,151				63020.0	%
Interest Expense			(163,131	)			(208,858	)			(45,727	)			-21.9	%
Income Tax Provision			-				-				-				0.0	%
Consolidated Net Loss		$	(671,051	)		$	(719,362	)		$	48,311				6.7	%

 

For the third quarter of fiscal year 2015, our total revenue was approximately $3,179,000 which increased by approximately $140,000 from the third quarter of fiscal year 2014. During the third quarter of fiscal year 2015 compared to the third quarter of fiscal year 2014, room revenues increased by approximately $120,000, food and beverage revenues were relatively flat, management and trademark fees revenues increased by approximately $18,000 and other revenues were relatively flat. The increase in room revenues was primarily due to a pickup in the Ontario, California and Tucson St. Mary’s properties. The Trust collects 2.5% of revenues as management fees from hotels owned by affiliates of Mr. Wirth. Management and trademark fees revenues increased as revenues of the hotels owned by affiliates of Mr. Wirth increased.

 

Our overall operating expenses increased by approximately $140,000 to approximately $3,690,000 during the third quarter of fiscal year 2015, compared to approximately $3,550,000 during the third quarter of fiscal year 2014. Room, food and beverage and general and administrative expenses were relatively flat during the third quarter of fiscal year 2015 compared to the third quarter of fiscal year 2014. Sales and marketing expenses were approximately $333,000 during the third quarter of fiscal year 2015 as compared to approximately $270,000 during the third quarter of fiscal year 2014 as management increased sales and marketing expense in our efforts to generate additional revenues for the third quarter of fiscal year 2015. Repairs and maintenance decreased by approximately $64,000 to approximately $253,000 during the third quarter of fiscal year 2015, compared to approximately $317,000 during the third quarter of fiscal year 2014 as additional maintenance projects were completed earlier in fiscal year 2015. Real estate and personal property taxes, insurance and ground rent increased by approximately $82,000 due to deferred land lees fees related to our Albuquerque, NM property, and additional property tax accruals during the third quarter of fiscal year 2015.

 

Operating loss was flat at approximately ($511,000) for both the third quarters of fiscal year 2015 and fiscal year 2014. The Operating loss was steady due to a slight increase in revenues matched by a slight increase in expenses. Management is evaluating opportunities to reduce its sales and marketing and real estate and personal property taxes, insurance and ground rent expenses to control operating expenses.

 

Interest income was stable for the third quarter of fiscal year 2015 as compared to the third quarter of fiscal year 2014. Interest expense decreased by approximately $46,000 to approximately $163,000 during the third quarter of fiscal year 2015, compared to approximately $209,000 during the third quarter of fiscal year 2014, due to the payoff of our Albuquerque property mortgage, and refinancing of our Ontario, California property.

 

Consolidated net loss was approximately ($671,000) for the three month period ended October 31, 2014 as compared to approximately ($719,000) for the three month period ended October 31, 2013, a decrease of approximately $48,000. The decrease in consolidated net loss was primarily due to the decrease in interest expense during the third quarter of fiscal year 2015 as compared to the third quarter of fiscal year 2014. Net loss attributable to controlling interests decreased by approximately $11,000 to approximately ($595,000) for the three month period ended October 31, 2014, or a net loss per share of ($0.07), from approximately ($611,000), or ($0.07) net loss per share, during the prior year period.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our principal source of cash to meet our cash requirements, including our distributions, is our share of the Partnership’s cash flow and cash flows from the Albuquerque, New Mexico property and the Yuma, Arizona property.  The Partnership’s principal source of cash flows is from Hotel operations for the one hotel property it owns and from its partial ownership of the Tucson, Arizona and Ontario, California properties, and more recently, sales of non-controlling interests in certain of our Hotels.  Our liquidity, including our ability to make distributions to our shareholders, will depend upon our ability and the Partnership’s ability to generate sufficient cash flow from Hotel operations and to service our debt.

 

 

Hotel operations are significantly affected by occupancy and room rates at the Hotels. Results are also significantly impacted by the overall economic conditions, specifically, conditions in the travel industry. Unfavorable changes in these factors could negatively impact hotel room demand and pricing, which would reduce the Trust’s profit margins on rented suites. Occupancy decreased by approximately 1.5% from the first nine months of fiscal year 2015 as compared to the first nine months of fiscal year 2014, while average daily rates increased by approximately $1.02. We had a significant decrease in the revenues of our Yuma, Arizona property, as business travel for the government sector decreased in the general area. Management is actively working with the property’s sales department to replace the government sector business. We anticipate revenues to increase at our Yuma, Arizona property during the fourth fiscal quarter due to an increase in international medical contracts.

 

Following our refinancing of our mortgage for our Ontario hotel property, we have minimum debt and mortgage payments of approximately $5,100,000 and approximately $857,000 due during the remaining portion of fiscal year 2015 and during fiscal year 2016, respectively. Management expects to either refinance or obtain extensions of our Tucson, Arizona note prior to maturity in January 2015.

 

As of October 31, 2014, the Trust has a revolving bank line of credit agreement, with a credit limit of $600,000.  The line of credit bears interest at the prime rate plus 1.00% per annum with a 6.0% rate floor, has no financial covenants and matures on June 23, 2015. The line is secured by a junior security interest in the Yuma, Arizona property and the Trust’s trade receivables.  Mr. Wirth is a guarantor on the line of credit.  The Trust had drawn funds of $345,000 on this line of credit as of October 31, 2014. As of December 1, 2014, the outstanding balance on the line of credit was $505,000.

 

As of October 31, 2014, the Trust had a related party Demand/Revolving Line of Credit/Promissory Note with a $1,400,187 account balance. The Demand/Revolving Line of Credit/Promissory Note has interest at 7.0% per annum and is interest only quarterly. The Demand/Revolving Line of Credit/Promissory Note was amended on October 27, 2014 to increase the maximum borrowing capacity to $2,000,000. As of December 1, 2014, the outstanding balance on the Demand/Revolving Line of Credit/Promissory Note was $1,550,187.

 

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 October 31, 2014, the business loan balance was approximately $339,000.

 

On September 16, 2014, Yuma Hospitality Properties Limited Partnership (“Yuma”), a subsidiary of the Trust, entered into a $415,520 business loan, including $23,520 of loan fees, with American Express Bank, FSB (the “Yuma Merchant Agreement”) with a maturity date of 365 days after the disbursement of the initial loan. 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’s American Express, VISA and MasterCard merchant receipts received during the loan period. As of October 31, 2014, the business loan balance was approximately $365,000.

 

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 365 days after the disbursement of the initial loan. 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 Suite Hospitality LLC’s American Express, VISA and MasterCard merchant receipts received during the loan period. As of October 31, 2014, the business loan balance was approximately $315,000.

 

With the expected continued availability of the $600,000 bank line of credit, the availability of the $2,000,000 related party Demand/Revolving Line of Credit/Promissory Note, the refinance of one of its Tucson, Arizona properties mortgage note payable, the refinance or extension of one of our mortgage note payables which management expects to occur, and the $477,000, $415,520 and $318,000 American Express business loans with Ontario Hospitality Properties, LP, Yuma Hospitality Properties Limited Partnership and Albuquerque Suite Hospitality, LLC, respectively, management believes that it will have enough cash on hand to meet all of our financial 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, or a potential sale of one of our properties; however, such transactions may not be available or available on terms that are favorable to the Trust.

 

We anticipate a moderate improvement in the weak overall economic situation that negatively affected results in fiscal years 2013 and 2014, which could result in higher revenues and operating margins.  Similar to challenges during the first three fiscal quarters of 2015, the fourth quarter of fiscal year 2015 is expected to continue to include competition for all types of business in the markets in which we operate and our ability to maintain room rates while maintaining market share.

 

 

Net cash provided by operating activities totaled approximately $454,000 and approximately $1,162,000 for the nine months ended October 31, 2014 and 2013, respectively.  During the first nine months of fiscal year 2015 compared to the first nine months of fiscal year 2014, revenues decreased by approximately $27,000 and operating expenses increased by approximately $566,000, resulting in a decrease of approximately $539,000 in financial operational results. Net cash provided by operating activities reflects the decrease in financial operational results and the increase in amortization of debt discounts and deferred financing fees and prepaid expenses and other assets, offset by the accounts payable and accrued expenses decrease.

 

Net cash used in investing activities totaled approximately $1,039,000 and approximately $431,000 for the nine months ended October 31, 2014 and 2013, respectively.  The increase in net cash used in investing activities during the first nine months of fiscal year 2015 compared to the first nine months of fiscal year 2014 was due to a significant increase in capital expenditures offset by an increase in restricted cash. Improvement of our properties is a key component of our overall plan to continue to outperform our competition. During the fourth quarter of fiscal year 2015, management does not expect to make any further significant property improvements.

 

Net cash provided by financing activities totaled approximately $634,000 during the first nine months of fiscal year 2015 as compared to net cash used in financing activities of approximately ($1,084,000) during the first nine months of fiscal year 2014. The increase in the cash provided by financing activities was primarily due to additional borrowings on the mortgage notes payable, line of credit – related party and proceeds from sale of non-controlling ownership interest in subsidiary, offset by principal payments on mortgage notes payable primarily due to the payoff of the Ontario, California property mortgage.

 

As of October 31, 2014, we had no commitments for capital expenditures beyond a 4% reserve for refurbishment and replacements that is set aside annually.

 

We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of the InnSuites Hotels’ revenues from operation of the Hotels. The Fund is restricted by the mortgage lender for one of our properties.  As of October 31, 2014, approximately $6,000 was held in these accounts and is reported on our Condensed Consolidated Balance Sheet as “Restricted Cash.”  The Fund is intended to be used for capital improvements to the Hotels and refurbishment and replacement of furniture, fixtures and equipment.  During the nine months ended October 31, 2014 and 2013, the Hotels spent approximately $1,077,000 and $407,000, respectively, for capital expenditures.  We consider the majority of these improvements to be revenue producing.  Therefore, these amounts are capitalized and depreciated over their estimated useful lives. The Hotels recognized depreciation expense of approximately $1,333,000 and $1,334,000 during the nine months ended October 31, 2014 and 2013.

 

As of October 31, 2014, we had mortgage notes payable of approximately $16.6 million outstanding with respect to the Hotels, approximately $145,000 in secured promissory notes outstanding to unrelated third parties arising from the Shares of Beneficial Interest and Partnership unit repurchases, approximately $345,000 outstanding under our bank line of credit, and approximately $1.7 million outstanding under our property business loans.

 

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

 

There can be no assurance that we will be successful in raising additional or replacement funds, or that these funds may be obtainable 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.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

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

 

SEASONALITY

 

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 Trust’s 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 Trust’s hotel business.

 

 

The seasonal nature of the Trust’s 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 Trust’s revenues could likely be greater as a result of its southern Arizona seasonal business.

FORWARD-LOOKING STATEMENTS

 

Certain statements in this Form 10-Q, including statements containing the phrases “believes,” “intends,” “expects,” “anticipates,” “predicts,” “projects,” “will be,” “should be,” “looking ahead,” “may” or similar words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  We intend that such forward-looking statements be subject to the safe harbors created by such Acts.  These forward-looking statements include statements regarding our intent, belief or current expectations, those of our Trustees or our officers in respect of (i) the declaration or payment of dividends; (ii) the leasing, management or operation of the Hotels; (iii) the adequacy of reserves for renovation and refurbishment; (iv) our financing plans; (v) our position regarding investments, acquisitions, developments, financings, conflicts of interest and other matters; (vi) our plans and expectations regarding future sales of hotel properties; and (vii) trends affecting our or any Hotel’s financial condition or results of operations.

 

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

 

	●	local, national or international economic and business conditions, including, without limitation, conditions that may, or may continue to, affect public securities markets generally, the hospitality industry or the markets in which we operate or will operate;
	●	fluctuations in hotel occupancy rates;
	●	changes in room rental rates that may be charged by InnSuites Hotels in response to market rental rate changes or otherwise;
	●	seasonality of our business;
	●	our ability to sell any of our Hotels at market value, listed sale price or at all;
	●	interest rate fluctuations;
	●	changes in governmental regulations, including federal income tax laws and regulations;
	●	competition;
	●	availability of credit or other financing;
	●	our ability to meet present and future debt service obligations;
	●	our ability to refinance or extend the maturity of indebtedness at, prior to, or after the time it matures;
	●	any changes in our financial condition or operating results due to acquisitions or dispositions of hotel properties;
	●	insufficient resources to pursue our current strategy;
	●	concentration of our investments in the InnSuites Hotels® brand;
	●	loss of membership contracts;
	●	the financial condition of franchises, brand membership companies and travel related companies;
	●	our ability develop and maintain positive relations with “Best Western Plus” or “Best Western” and potential future franchises or brands;
	●	real estate and hospitality market conditions;
	●	hospitality industry factors;
	●	our ability to carry out our strategy, including our strategy regarding IBC hotels;
	●	the Trust’s ability to remain listed on the NYSE MKT;
	●	effectiveness of the Trust’s software program;
	●	the need to periodically repair and renovate our Hotels at a cost at or in excess of our standard 4% reserve;
	●	our ability to integrate any acquisitions with the Trust in a timely manner;
	●	increases in the cost of labor, energy, healthcare, insurance and other operating expenses;
	●	terrorist attacks or other acts of war;
	●	outbreaks of communicable diseases;
	●	natural disasters including adverse climate changes in the areas where we have or serve hotels;
	●	airline strikes;
	●	transportation and fuel price increases;
	●	data breaches or cybersecurity attacks; and
	●	loss of key personnel.

 

 

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

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required for smaller reporting companies.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

  

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of October 31, 2014.

 

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

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II

 

OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

See Note 11 to the notes to unaudited condensed consolidated financial statements.

 

ITEM 1A. RISK FACTORS

 

Not required for smaller reporting companies.

 

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

 

On January 2, 2001, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 250,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions.  On September 10, 2002, August 18, 2005 and September 10, 2007, the Board of Trustees approved the purchase of up to 350,000 additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Additionally, on January 5, 2009, September 15, 2009 and January 31, 2010, the Board of Trustees approved the purchase of up to 300,000, 250,000 and 350,000, respectively, additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions.  Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the InnSuites Hospitality Trust 1997 Stock Incentive and Option Plan.  During the three months ended October 31, 2014, the Trust acquired 38,541 Shares of Beneficial Interest in open market transactions at an average price of $2.13 per share.  The average price paid includes brokerage commissions. The Trust intends to continue repurchasing Shares of Beneficial Interest in compliance with applicable legal and NYSE MKT requirements.  The Trust remains authorized to repurchase an additional 144,787 Partnership units and/or Shares of Beneficial Interest pursuant to the publicly announced share repurchase program, which has no expiration date.

  

		Issuer Purchases of Equity Securities
Period		Total Number of Shares Purchased				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans				Maximum Number of Shares that May Yet Be Purchased Under the Plans
August 1 - August 31, 2014			13,296			$	2.21				13,296				170,032
September 1 - September 31, 2014			13,140			$	2.11				13,140				156,892
October 1 - October 31, 2014			12,105			$	2.30				12,105				144,787
Total			38,541								38,541

 

On February 1, 2014, the Trust granted 6,000 restricted shares with the aggregate grant date fair value of $9,060 per grant to each of its non-employee Trustees as compensation. These shares vest ratably over the Trust’s 2015 fiscal year, February 1, 2014 through January 31, 2015, at a rate of approximately 500 shares per month. In addition, in connection with Ms. Ketcherside’ appointment as a non-employee trustee, on March 24, 2014, the Trust granted to her as compensation 5,100 restricted shares with the aggregate grant date fair value of $9,486 which vests ratably over the Trust’s 2015 fiscal year. These shares were issued in reliance upon the exemption from the registration requirement of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2). Appropriate restructure legends will be imprinted on the back of each stock certificate.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None.     

 

ITEM 5. OTHER INFORMATION

 

On October 24, 2014, the Trust and Partnership entered into a restructuring agreement with Rare Earth to allow for the sale of non-controlling interest units in Yuma Hospitality Properties, Limited Partnership for $10,000 per unit, which operates the Yuma hotel property, then wholly-owned by the Trust.  Under the agreement, Rare Earth agreed to either purchase or bring in other investors to purchase up to 398 units, which represents approximately 49% of the outstanding partnership units in the Yuma entity, on a post-transaction basis, and the parties agreed to restructure the limited partnership agreement of the Yuma entity. The Board of Trustees approved this restructuring on October 24, 2014. Under the restructured limited partnership agreement, Rare Earth became a general partner of the Yuma entity along with the Trust and Partnership.  

 

 

ITEM 6. EXHIBITS

 

Exhibit No.		Exhibit
10.1		Business Loan and Security Agreement, dated August 19, 2014, executed by Ontario Hospitality Properties LLLP, as borrower, in favor of American Express Bank, FSB, as Lender, filed as Exhibit 10.1 to the Trust’s Form 8-K filed on August 25, 2014 and incorporated herein by reference
10.2		Business Loan Agreement, dated August 22, 2014, by and among Ontario Hospitality Properties LLLP, as Borrower, and Arizona Bank & Trust, as Lender, guaranteed by a first position lien against the Ontario property and all general business assets of Ontario, filed as Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed on August 25, 2014 and incorporated herein by reference
10.3		Business Loan and Security Agreement dated September 16, 2014, executed by Yuma Hospitality Properties Limited Partnership, as borrower, in favor of American Express Bank, FSB, as Lender, filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 22, 2014 and incorporated herein by reference
10.4		Purchase and Sale Agreement dated October 15, 2014, between Tucson Hospitality Properties, LLLP and Joseph R. Cesare and Hugh M. Caldwell, Jr., filed with the Securities and Exchange Commission on October 21, 2014 and incorporated herein by reference
10.5		Business Loan and Security Agreement dated October 24, 2014, executed by Albuquerque Suite Hospitality, L.L.C., as borrower, in favor of American Express Bank, FSB, as Lender, filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2014 and incorporated herein by reference
10.6		Addendum dated October 27, 2014 to the Demand/Revolving Line of Credit/Promissory Note Agreement, by and between Tucson Hospitality Properties, LLLP and Rare Earth Financial, LLC, filed as Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2014 and incorporated herein by reference
10.7		Deed of Trust dated November 18, 2014, among Tucson Hospitality Properties, LLLP, as Trustor, and Kansas State Bank of Manhattan, as Lender, filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 26, 2014 and incorporated herein by reference
10.8		Promissory note dated November 18, 2014 executed by Tucson Hospitality Properties LLLP, as Borrower and Kansas State Bank of Manhattan, as Lender, filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 26, 2014 and incorporated herein by reference
10.9		Yuma Hospitality Properties LLLP Restructuring Agreement dated October 24, 2014 among, Rare Earth Financial, LLC, InnSuites Hospitality Trust and Yuma Hospitality Properties Limited Partnership.
31.1		Section 302 Certification By Chief Executive Officer
31.2		Section 302 Certification By Chief Financial Officer
32.1		Section 906 Certification of Principal Executive Officer and Principal Financial Officer
101		XBRL Exhibits
101.INS		XBRL Instance Document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.LAB		XBRL Labels Linkbase Document
101.PRE		XBRL Presentation Linkbase Document
101.DEF		XBRL Definition Linkbase Document

 

 

SIGNATURES

 

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

 

 

			INNSUITES HOSPITALITY TRUST
Dated:	December 10, 2014		/s/ James F. Wirth
			James F. Wirth
			Chairman and Chief Executive Officer
Dated:	December 10, 2014		/s/ Adam B. Remis
			Adam B. Remis
			Chief Financial Officer

 

 

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