Financial Performance - The company reported a net income of $1,198,000 for the three months ended September 30, 2024, compared to $1,643,000 for the same period in 2023, reflecting a decrease of 27.0%[9] - Earnings per share (EPS) for the three months ended September 30, 2024, was $0.29, down from $0.39 in the same period of 2023, a decline of 25.6%[9] - Net income for the nine months ended September 30, 2024, was $3,538,000, a decrease of 21.9% compared to $4,527,000 for the same period in 2023[13] - The decrease in net income for the three months ended September 30, 2024, is primarily due to a decrease in interest income from related party receivables, partially offset by a decrease in general, administrative, and advisory fees[46] - For the nine months ended September 30, 2024, net income also decreased primarily due to a decrease in interest income from related party receivables, with a similar offset from reduced general, administrative, and advisory fees[47] Assets and Equity - As of September 30, 2024, total assets increased to $120,817,000 from $118,078,000 as of December 31, 2023, representing a growth of 2.0%[6] - Total shareholders' equity increased to $120,814,000 as of September 30, 2024, compared to $118,078,000 at the end of 2023, marking an increase of 2.0%[7] - Retained earnings increased to $60,566,000 as of September 30, 2024, from $57,028,000 at the end of 2023, an increase of 4.4%[7] - Receivables from related parties amounted to $109,493,000 as of September 30, 2024, an increase from $106,541,000 at December 31, 2023[28] Cash Flow and Liquidity - Net cash provided by operating activities was $718,000 for the nine months ended September 30, 2024, compared to $6,000 for the same period in 2023[13] - The company anticipates that cash and cash equivalents as of September 30, 2024, along with cash generated from related party receivables over the next twelve months, will be sufficient to meet all current cash requirements[49] - The company’s principal liquidity needs are to fund normal recurring expenses, primarily sourced from collections of mortgage notes receivables and related party receivables[48] Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $97,000, compared to $437,000 for the same period in 2023, a decrease of 77.8%[9] - Advisory fees paid to Pillar Income Asset Management, Inc. were $76,000 for the nine months ended September 30, 2024, a decrease of 92.7% from $1,045,000 for the same period in 2023[26] - The company’s operating expenses consist mainly of general and administrative costs, including audit, legal, and administrative fees paid to a related party[46] Share Repurchase - The company repurchased 107,497 shares of common stock at a cost of $1,749,000 as of September 30, 2024, compared to 62,961 shares at a cost of $947,000 at the end of 2023[7] - The company repurchased a total of 44,536 shares for $802,000 during the nine months ended September 30, 2024, with 513,003 shares remaining available for repurchase[29] - The company has a share repurchase program allowing for the repurchase of up to 1,650,000 shares, with 44,536 shares purchased during the nine months ended September 30, 2024, and a total of 1,136,997 shares purchased to date[55] Interest Income - Interest income from related parties for the nine months ended September 30, 2024, was $7,160,000, down from $4,785,000 in the same period of 2023, a decrease of 33.0%[9] - Interest income on related party receivables was $1,464,000 for the three months ended September 30, 2024, down 32.8% from $2,178,000 for the same period in 2023[28] - The interest rate on the amended note receivable from Unified Housing Foundation, Inc. was 5.33% as of September 30, 2024, down from 12.0% previously[23] Management and Operations - The company is externally managed and primarily invests in mortgage notes receivables, focusing on income-producing properties in the Southern United States[37] - The company anticipates generating excess cash from property operations in the next twelve months, although it may not be sufficient to meet all obligations[30] Internal Controls and Risk Factors - The company’s disclosure controls and procedures have been evaluated and deemed effective as of the end of the reporting period[51] - There has been no change in internal control over financial reporting that has materially affected or is likely to materially affect the internal control over financial reporting[52] - There have been no material changes in risk factors from those previously disclosed in the 2023 10-K[54] Valuation and Financial Instruments - The valuation hierarchy for financial instruments includes three levels, with Level 1 being unadjusted quoted prices for identical assets in active markets[43]
me Opportunity Realty Investors(IOR) - 2024 Q3 - Quarterly Report