InnSuites Hospitality Trust(IHT) - 2024 Q4 - Annual Report

Financial Performance - For Fiscal Year 2024, occupancy increased by approximately 1.95% to 75.91% from 73.96% in the prior Fiscal Year[57] - Average Daily Rate (ADR) rose by $1.80, or 1.88%, to $97.46 in Fiscal Year 2024 from $95.66 in Fiscal Year 2023[57] - Revenue Per Available Room (REVPAR) increased by $3.23, or 4.57%, to $73.98 in Fiscal Year 2024 from $70.75 in Fiscal Year 2023[57] - Total revenues for the fiscal year ended January 31, 2024, were approximately $7,484,000, an increase of $339,000 or 5% compared to $7,146,000 for the fiscal year ended January 31, 2023[62] - Room revenues increased by 5% to approximately $7,292,000 for the fiscal year ended January 31, 2024, compared to approximately $6,974,000 for the prior year[63] - Consolidated net income decreased to approximately $277,000 for the fiscal year ended January 31, 2024, down from $737,000 in the prior year, representing a decline of 62%[61] - Adjusted EBITDA for the fiscal year ended January 31, 2024, was approximately $1,335,000, down from $1,687,000 in the prior year[86] - FFO for the fiscal year ended January 31, 2024, was approximately $956,000, compared to $1,439,000 for the fiscal year ended January 31, 2023[87] - Total operating expenses rose to approximately $8,205,000 for the fiscal year ended January 31, 2024, reflecting an increase of $762,000 or 10% from $7,443,000 in the previous year[65] - The operating loss for the year ended January 31, 2024, was $720,976, compared to a loss of $297,335 in 2023, indicating a worsening of 142.73%[136] Future Outlook - The Trust expects continued growth in the travel industry and improved profitability for Fiscal Year 2025[51] - For Fiscal Year 2024, the Trust experienced substantial profit improvement and expects record profits and revenues for Fiscal Year 2025[58] - The company anticipates limited new hotel supply in its markets during fiscal year 2025, expecting continued revenue and operating margin growth[81] - During Fiscal Year 2024, the company experienced substantial increases in room rates to offset inflationary pressures, with continued rate increases expected in Fiscal Year 2025[104] Investment Activities - The Trust invested $1 million in UniGen Power, Inc., acquiring debentures convertible into 1 million shares and warrants for an additional 2 million shares[56] - The company has invested $1 million in UniGen Power, Inc., which is developing a new clean energy generation technology, with the investment structured as convertible debentures and stock[105] - The total potential stock ownership from the investment in UniGen could reach up to 3 million shares, representing approximately 20% of fully diluted UniGen equity[109] - The Trust holds a $1 million 6% convertible debenture in UniGen Power Inc. and approximately $633,750 in UniGen's privately-held common stock[142] - The Trust's investment in UniGen Power, Inc. is recorded at a cost of $633,750, with 540,000 shares owned as of January 31, 2024, reflecting the company's focus on long-term growth despite limited operations[174] - The Trust holds warrants to purchase up to 1,500,000 shares of UniGen Common Stock at exercise prices of $1.00 and $2.25 per share[220] - During the year ended January 31, 2023, the Trust exercised 221,250 warrants for a total of $315,000 for shares of UniGen[225] - Management believes the investment in UniGen at cost approximates fair value as operations remain stable[226] Dividends and Shareholder Equity - The Trust has declared uninterrupted annual dividends for 54 years, maintaining a conservative policy of $0.02 per share per Fiscal Year[39] - The Trust has paid uninterrupted dividends annually for 53 consecutive years, with a total annual dividend of $0.02 per share for fiscal years 2024 and 2023, amounting to $180,120 and $182,785 respectively[188] - The Trust's total shareholders' equity decreased to $2,654,912 in 2024 from $3,682,145 in 2023, a decline of 28.00%[134] - The Trust's equity position showed a deficit of $(1,117,071) as of January 31, 2024, compared to $(829,290) in 2023[213] Asset and Liability Management - Total assets decreased to $15,680,367 as of January 31, 2024, down from $17,019,972 in 2023, a decline of 7.86%[134] - Total liabilities decreased slightly to $13,025,455 in 2024 from $13,337,827 in 2023, a reduction of 2.34%[134] - Cash and cash equivalents decreased to $1,325,368 in 2024 from $2,111,383 in 2023, a decline of 37.06%[134] - The Trust's accounts payable and accrued expenses rose to $899,921 as of January 31, 2024, compared to $496,109 in 2023, indicating an increase of 81.5%[213] Operational Insights - The Trust's hotel operations are significantly impacted by overall economic conditions and travel industry dynamics, including inflationary pressures[49] - The Trust's hotel operations are affected by seasonality, with the Tucson Arizona Hotel experiencing the highest occupancy in the first fiscal quarter, while the Albuquerque New Mexico Hotel is most profitable during the second and third fiscal quarters[163] - The Trust's principal source of cash is revenues from hotel room reservations and management fees from its properties in Tucson, Arizona, and Albuquerque, New Mexico[157] - The Trust's liquidity is dependent on generating sufficient cash flow from hotel operations and potential asset sales[157] - The Trust's operations are vulnerable to risks such as travel disruptions and economic downturns, which could significantly impact revenues and profits[164] Strategic Initiatives - The Trust aims to market its two hotels over the next 12-36 months to obtain full market value, believed to be substantially higher than book values[52] - The company plans to sell its remaining two hotel properties, the Albuquerque Hotel and Tucson Oracle Hotel, with estimated market asking prices of $9.5 million and $18.5 million respectively, totaling $28 million[90] - The company aims to complete the sale of the hotels within 12-36 months but cannot guarantee favorable terms or successful sales[91] - The Trust is considering offers for the sale of its hotels, although neither hotel is currently listed for sale[147] - The Trust's strategic options include the potential sale or refinance of hotel properties, although favorable terms are not guaranteed[161][162] Accounting and Reporting - The company has no off-balance sheet financing arrangements or liabilities, ensuring transparency in its financial statements[94] - The Trust's accounting policies require management to make estimates that could affect reported amounts of assets and liabilities, highlighting the importance of accurate financial reporting[165][167] - For the fiscal years ended January 31, 2024 and 2023, the Trust had no allowance for doubtful accounts, indicating effective management of receivables[180] - The Trust's basic and diluted net income per share is calculated based on the weighted-average number of shares outstanding, with potential dilutive securities excluded from the calculation for fiscal years 2024 and 2023[189][190]