INNSUITES HOSPITALITY TRUST

Previous wording

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto for the first three Fiscal Quarters of Fiscal 2026, appearing elsewhere in this Form 10-Q and our audited consolidated Form 10-K for the fiscal year ended January 31, 2025.

Current wording

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 audited consolidated Form 10-K for the fiscal year ended January 31, 2026.

Previous wording

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:

Current wording

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 and our other investments, 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:

Previous wording

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 except as may be required by law. 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 Trust.

Current wording

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 except as may be required by law. 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.

Previous wording

At October 31, 2025, we owned a direct 21.90% interest in the Albuquerque, New Mexico Hotel, and, together with the Partnership, owned an indirect 51.75% interest in the Tucson, Arizona Hotel.

Current wording

At April 30, 2026, we owned a direct 21.90% interest in the Albuquerque, New Mexico Hotel, and, together with the Partnership, owned an indirect 51.69% interest in the Tucson, Arizona Hotel.

Previous wording

In addition, we now manage InnDependent Boutique Collection Hotels, (IBC Hotels, LLC), offering reservations and branding services to independent hotels, with new technology reservations and booking engine technology provided, and with an IHT option to purchase IBC Hotels, LLC, at cost over the next five years. We hold a diversification investment in UniGen Power Inc., which is developing an efficient clean energy portable efficient electricity generator innovation.

Current wording

In addition, we manage InnDependent Boutique Collection Hotels, (IBC Hotels, LLC), offering reservations and branding services to independent hotels, with new technology reservations and booking engine technology provided, and with an option to purchase IBC Hotels, LLC, at cost over the next five years. We hold a diversification investment in UniGen Power Inc., which is developing an efficient clean energy portable efficient electricity generator innovation.

Previous wording

Trust operations consist of one reportable segment – Hotel Ownership & Management Services. Hotel Ownership Operations derives its revenue from the ownership and operation of the Trust’s two hotel properties with an aggregate of 270 hotel suites in Arizona and New Mexico. Hotel management services provides IBC Hotel management services, including those of the Trust’s two Hotels. As part of our management services, we also provide trademark and licensing services.

Current wording

Trust operations consist of one reportable segment – Hotel Ownership & Hotel Management Services. Hotel Ownership Operations derives its revenue from the operation of the Trust’s two hotel properties with an aggregate of 270 hotel suites in Arizona and New Mexico. Hotel management services, provides management services for the Trust’s two Hotels. As part of our management services, we also provide trademark and licensing services, and manage IBC Hotels, LLC.

Previous wording

Our results are significantly affected by the overall economy and travel, occupancy and room rates at the Hotels, our ability to manage costs, changes in room rates, and changes in the number of available suites caused by the Trust’s disposition activities. Results are also significantly impacted by overall economic conditions and conditions in the travel industry. Unfavorable changes in these factors, such as tariff uncertainty, or the virus-related travel slowdown, can and have negatively impacted hotel room demand and pricing, which reduces our profit margins. Additionally, our ability to manage costs could be adversely impacted by significant inflationary increases in operating expenses, resulting in lower operating margins, and higher hourly labor costs. Further increases in area hotel supply, hourly labor cost, declines in demand, or declines or failure to keep up with inflation of room rates, could result in increased competition, which could have an adverse effect on the rates, revenue, costs, and profits of the Hotels in their respective markets.

Current wording

Our results are significantly affected by the overall economy and travel, occupancy and room rates at the Hotels, our ability to manage costs, changes in room rates, and changes in the number of available suites. Unfavorable changes in these factors, can and have negatively impacted hotel room demand and pricing, which reduces our profit margins. Additionally, our ability to manage costs has been and could be adversely impacted by inflationary increases in operating expenses, resulting in lower operating margins, and higher hourly labor costs. Further increases in area hotel supply, hourly labor cost, declines in demand, or declines in room rates, could result in increased competition, which could have an adverse effect on the occupancy rates, revenue, costs, and profits of the Hotels in their respective markets.

Previous wording

Over time, we expect our high risk but also high profit potential UniGen diversification efficient clean energy generation investment, to grow and provide a substantial source of income in the future. We are also optimistic for the high profit potential from IBC management, with the five-year option to purchase IBC at cost.

Current wording

Over time, we expect our high risk but also high profit potential UniGen diversification efficient clean energy generation investment, to grow and provide a substantial source of income in the future. We also expect profit potential from IBC management, and the five-year option to purchase IBC, LLC, at cost.

Previous wording

We expect the current Fiscal Year 2026 to be uncertain for the travel industry, Hotel occupancy, room rates, as well as continuation of current cost control efforts. We believe that we have positioned the Hotels to remain competitive through our now fully completed Tucson and Albuquerque hotel refurbishments, by offering fully refurbished studios and two-room suites at each location, and by maintaining complementary guest items, including complimentary hot breakfast and free high-speed Internet.

Current wording

We expect the current Fiscal Year 2027 to be stable in the domestic travel industry, stable relatively high level Hotel occupancy, modest increases of room rates, as well as continuation of current cost control all leading to stable, or moderately increasing profitability of our hotels. We believe that we have positioned the Hotels to remain competitive through our now fully completed Tucson and Albuquerque hotel refurbishments, by offering fully refurbished studios and two-room suites at each location, and by maintaining popular complementary guest amenities, including complimentary hot, healthy breakfast and free high-speed Internet access.

Previous wording

Our strategic plan is to continue to obtain the full benefit of our real estate equity, by ultimately obtaining full market value for our two Hotels at market value, which is believed by management to be substantially higher than lower book values, over the next 36 months. We look forward to the expansion of IBC, with its five-year option to purchase at cost. We anticipate to benefit from the UniGen efficient clean energy generator investment, as well. In addition, the Trust is seeking a larger private reverse merger partner that may benefit from a merger that would afford that partner access to our public listing on the NYSE AMERICAN.

Current wording

Our strategic plan is to continue to obtain the full benefit of our real estate equity, by ultimately obtaining full current value for our two Hotels at market value, which is believed by management to be substantially higher than lower book values, over the next 36 months. In addition, the Trust is seeking further diversification including a larger private reverse merger partner that may benefit from a merger that would afford that partner access to our listing on the NYSE AMERICAN.

Previous wording

Our expenses consist primarily of property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees, non-cash depreciation of the Hotels and hotel operating expenses. Hotel operating expenses consist primarily of payroll, guest and maintenance supplies, marketing, and utilities expenses. Management believes that a review of the historical performance of the operations of the Hotels, particularly with respect to Occupancy, which is calculated as rooms sold divided by total 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 number of rooms available, is appropriate for understanding revenue from the Hotels.

Current wording

Our expenses consist primarily of property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees, hotel operating expenses, and non-cash depreciation of the Hotels. Hotel operating expenses consist primarily of payroll, guest and maintenance supplies, marketing, and utilities expenses. Management believes that a review of the historical performance of the operations of the Hotels, particularly with respect to Occupancy, which is calculated as rooms sold divided by total 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 number of rooms available, is appropriate for understanding operation of the Hotels.

Previous wording

Trust operations consist of one reportable segment – Hotel Ownership & Management Services. Hotel Ownership Operations derives its revenue from the operation of the Trust’s two hotel properties with an aggregate of 270 hotel suites in Arizona and New Mexico. Management services, provides management services including for the Trust’s two Hotels. As part of our management services, we also provide trademark, licensing, and IBC services.

Current wording

Trust operations consist of one reportable segment – Hotel Ownership & Hotel Management Services. Hotel Ownership Operations derives its revenue from the operation of the Trust’s two hotel properties with an aggregate of 270 hotel suites in Arizona and New Mexico. Hotel management services, provides management services for the Trust’s two Hotels. As part of our management services, we also provide trademark and licensing services.

Previous wording

For the nine months ended October 31, 2025, we had total revenue of approximately $5.81 million compared to approximately $5.96 million for the nine months ended October 31, 2024, a decrease of approximately $0.2 million. In the prior Fiscal Years ended January 31, 2023, 2022 and 2021, we made significant improvements to our Albuquerque, New Mexico and Tucson, Arizona hotels. During the nine months ended October 31, 2025, we had an increase in total revenue, benefitting from prior refurbishments.

Current wording

For the First Fiscal Quarter three months ended April 30, 2026, we had total revenue of approximately $2.19 million compared to approximately $2.21 million for the three months ended April 30, 2025, a decrease of approximately $12,000. In the prior Fiscal Years ended January 31, 2026, 2025 and 2014, we made significant improvements to our Albuquerque, New Mexico and Tucson, Arizona hotels. During the three months ended April 30, 2026, total revenue remained relatively stable, benefiting from prior refurbishments.

Previous wording

Total Trust Equity decreased to approximately ($147,000) at the end of the nine months in the current Fiscal Year 2025, down approximately $1.8 million, from approximately $1,651,000 reported at the end of the nine months in the prior Fiscal Year 2024. Net loss before non-cash depreciation expense was approximately $291,000 for the nine months ended October 31, 2025, compared to net loss before non-cash depreciation of expense of approximately $307,000 for the nine months ended October 31, 2024, which is a decrease of approximately $16,000.

Current wording

Total Trust Equity decreased to ($921,921) at the end of Fiscal First Quarter 2026, up approximately $76,000, from the ($998,842) reported at the end of the Fiscal First Year 2026. Net Income before non-cash depreciation expense was $177,701 for the Fiscal First Quarter ended April 30, 2026, compared to $61,268 for the Fiscal First Quarter ended April 30, 2025, which is an increase of approximately $115,000.

Previous wording

Room revenue remained relatively flat during the three months ended October 31, 2025 as room revenues were approximately $1.81 million for the three months ending October 31, 2025 as compared to approximately $1.82 million for the three months ending October 31, 2024. During Fiscal Year 2026, we expect additional improvements in occupancy, modest improvements in rates and steady food and beverage revenues.

Current wording

Room revenues were essentially flat during the three months ended April 30, 2026, at approximately $2.12 million for the three months ending April 30, 2026, and April 30, 2025, respectively. Due to the increased occupancy, food and beverage revenue increased approximately 12% to approximately $34,000 for the three months ending April 30, 2026 as compared to approximately $30,000 during the three months ending April 30, 2025, an increase of approximately $4,000. During Fiscal Year 2027, we expect additional modest improvements in occupancy, modest improvements in rates and steady food and beverage revenues.

Previous wording

Total expenses net of interest expense were approximately $1.99 million for the three months ended October 31, 2025 compared to total expenses net of interest expense of approximately $1.96 million for the three months ended October 31, 2024.

Current wording

Total expenses net of interest expense were approximately $2.02 million for the three months ended April 30, 2026, reflecting an increase of approximately $37,000, or 2%, compared to total expenses net of interest expense of approximately $1.98 million for the three months ended April 30, 2025.

Previous wording

Room expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation fees and room supplies were approximately $628,000 for the three months ended October 31, 2025 compared to approximately $570,000 in the prior year three month period for an increase of approximately $57,000, or 10%. Room expenses increased due to some additional seasonal staffing, while occupancy remained relatively flat overall.

Current wording

Room expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation fees and room supplies were approximately $645,000 for the three months ended April 30, 2026 down from $661,000 in the prior year three month period for an improvement of approximately $16,000, or 2%. Room expenses decreased despite increased occupancy at the hotels, due to effective cost management.

Previous wording

Food and beverage expenses included food and beverage costs, personnel and miscellaneous costs to provide banquet events. For the three months ended October 31, 2025, food and beverage expenses were approximately $26,000 for the three months ended October 31, 2025, compared to approximately $20,000 for the three months ended October 31, 2024.

Current wording

Food and beverage expenses included food and beverage costs, personnel and miscellaneous costs to provide banquet events. For the three months ended April 30, 2026, food and beverage expenses remained relatively flat at approximately $24,000 for the three months ended April 30, 2026, compared to approximately $26,000 for the three months ended April 30, 2025. There were several cost savings initiatives to offset rising food and beverage purchasing costs.

Previous wording

General and administrative expenses include overhead charges for management, accounting, shareholder and legal services. General and administrative expenses of approximately $525,000 for the three months ended October 31, 2025, decreased approximately $11,000 from approximately $536,000 for the three months ended October 31, 2024 primarily due to savings initiatives at corporate staffing in support of the hotels and property sales efforts.

Current wording

General and administrative expenses include overhead charges for management, accounting, shareholder and legal services. General and administrative expenses of approximately $547,000 for the three months ended April 30, 2026, increased approximately $79,000, or 17%, from approximately $468,000 for the three months ended April 30, 2025 primarily due to increased corporate overhead costs.

Previous wording

Sales and marketing expense decreased approximately $15,000, or 4%, to approximately $335,000 for the nine months ended October 31, 2025, from approximately $349,000 for the nine months ended October 31, 2024.

Current wording

Sales and marketing expense increased approximately $9,000, or 7%, to approximately $136,000 for the three months ended April 30, 2026 from approximately $127,000 for the three months ended April 30, 2025. Increased focus on sales and marketing drove the increase.

Previous wording

Repairs and maintenance expense increased from approximately $98,000 reported for the three months ended October 31, 2024 compared to approximately $112,000 for the three months ended October 31, 2025. Having completed the property improvements at our Tucson, Arizona hotel Management anticipates the improvements which complies with the increasing Best Western standards, will (after the adverse effects of travel restrictions and slowdown), lead to improvement in guest satisfaction and will drive additional revenue growth through increased occupancy and increased rates.

Current wording

Repairs and maintenance expense decreased by approximately $13,000, or 11%, from approximately $109,000 reported for the three months ended April 30, 2025 to approximately $96,000 for the three months ended April 30, 2026. Having completed the property improvements at our Tucson, Arizona hotel Management anticipates the improvements which complies with the increasing Best Western standards, will (after the adverse effects of travel restrictions and slowdown), lead to improvement in guest satisfaction and will drive additional revenue growth through increased occupancy and increased rates.

Previous wording

Hotel property non-cash depreciation expenses increased by approximately $41,000 from approximately $521,000 reported for the nine months ended October 31, 2024, compared to approximately $562,000 for the nine months ended October 31, 2025. Increased depreciation resulted from additional capital expenditures being depreciated.

Current wording

Hotel property non-cash depreciation expenses increased by approximately $13,000 from approximately $182,000 reported for the three months ended April 30, 2025 to approximately $195,000 for the three months ended April 30, 2026.

Previous wording

Real estate and personal property taxes, Insurance and Ground Rent expenses decreased approximately $74,000, or 35%, to approximately $136,000 reported for the three months ended October 31, 2025 compared with approximately $211,000 for the three months ended October 31, 2024 due to adjustments in our operating lease accounts.

Current wording

Real estate and personal property taxes, Insurance and Ground Rent expenses decreased approximately $25,000, or 16%, to approximately $133,000 reported for the three months ended April 30, 2026 compared with approximately $158,000 for the three months ended April 30, 2025.

Previous wording

Two principal sources of cash to meet our cash requirements, include monthly management fees from our two hotels and distributions of our share of the Partnership’s cash flow of the Tucson hotel and quarterly distributions from the Albuquerque, New Mexico properties. Additional sources of cash include intercompany loan repayments, potential future real estate hotel refinance or sales, potential increase of affiliate line of credit financing, and potential returns on diversified investments. The Partnership’s principal source of revenue is hotel operations for the hotel property we own in Tucson, Arizona. 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, from management fees, and from the potential sale and/or refinance of the hotel, and to service our debt.

Current wording

Two principal sources of cash to meet our cash requirements, include monthly management/accounting fees from our two hotels and distributions of our share of the Partnership’s cash flow of the Tucson hotel, as well as quarterly distributions from the Albuquerque, New Mexico properties. Additional sources of cash include potential new intercompany loans and loan repayments, potential future real estate hotel sales/refinances, and potential returns on diversified investments. The Partnership’s principal source of revenue is hotel operations for the hotel property it owns in Tucson, Arizona, as well as management fees from hotels and IBC reservations. Our liquidity, including our ability to make distributions to our Tucson Investors, will depend upon our ability, and the Partnership’s ability, to generate sufficient cash flow from hotel operations, from management fees, and from the potential sale and/or refinance of the hotel, and to service our debt including repayment of an intercompany loan related to Tucson.

Previous wording

Hotel operations were positively affected by improved occupancy and substantially increased room rates at the Hotels in the Fiscal Year 2025, and stable occupancy, rates, and cost controls the First Three Fiscal Quarters of Fiscal 2026, ended October 31, 2025, as inflation and the travel industry momentum stabilizes.

Current wording

Hotel operations were positively affected by stable room rates at the Hotels in the Fiscal Year 2026, and stable occupancy, rates, and/or cost controls the First Fiscal Quarter of Fiscal 2027, ended April 30, 2026, as the travel industry momentum stabilizes.

Previous wording

With approximately $0.1 million of cash as of October 31, 2025, hotel and management fee income, the availability of three bank lines of credit, approximately $300,000 related party Demand/Revolving Line of Credit/Promissory Note, we believe that we will have enough cash on hand to meet all of our financial obligations as they become due for the next twelve months and beyond, from the issuance date of the these consolidated financial statements. Our management is analyzing other strategic options available to us, including raising additional funds, asset sales, and benefitting from clean energy and/or independent travel investments, potential increase of affiliate line of credit financing, and improved cash flow as our diversification investment matures. However, such transactions may not be available on terms that are favorable to us, or at all.

Current wording

With approximately $41,000 of cash as of April 30, 2026 and the availability of three $250,000 bank lines of credit, potential funds available from the $2,500,000 related party Demand/Revolving Line of Credit/Promissory Note, and the availability of Advances to Affiliate credit facilities and available Bank lines of Credit, we believe that we will have enough cash on hand to meet all of our financial obligations as they become due for at least the next twelve months from the issuance date of the these consolidated financial statements. Our management is analyzing strategic options available to us, including raising additional funds, asset sales, benefitting from clean energy investment, and IBC cash flow as our diversification investment matures, and a possible reverse merger. However, such transactions may not be available on terms that are favorable to us, or at all.

Previous wording

IHT and InnDependent Boutique Collections Hotels (IBC), agreed to extend the payment schedule on IBC’s note receivable to June 30, 2030, as RRF, the IHT Management Subsidiary, took over IBC Management, as of March 7, 2025, and obtained a five-year option to purchase IBC Hotels, LLC, at cost.

Current wording

IHT and InnDependent Boutique Collections Hotels (IBC), agreed to extend the payment schedule on IBC’s note to June 30, 2030, as RRF, the IHT Management Subsidiary, took over IBC Management, as of March 7, 2025, and obtained a five-year option to purchase IBC Hotels, LLC, at cost.

Previous wording

There can be no assurance that we will be successful fully collecting receivables, in 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.

Current wording

There can be no assurance that we will be successful fully collecting receivables, in 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 or refinance certain of our assets to meet our liquidity needs, which may not be on terms that are favorable.

Previous wording

We anticipate stable leisure travel demand, and limited additional new-build hotel supply in our markets during the current Fiscal Year 2026, and accordingly we anticipate stable revenues. We expect challenges for the remaining Fiscal Year to be the economy, tariffs affecting travel, inflation, and cost control.

Current wording

We anticipate stable leisure and business travel demand, and limited additional new-build hotel supply in our markets during the current Fiscal Year 2027, and accordingly we anticipate stable revenues or moderately improving, and operating margins. We expect challenges, but also optimism, for the remaining Fiscal Year, based on fluctuating oil prices, a strong economy, inflation, both up and down, and internal cost control.

Previous wording

Cash used in operating activities totaled approximately $18,000 during the nine months ended October 31, 2025 as compared to net cash used of approximately $651,000 during the nine months ended October 31, 2024. Consolidated net loss was approximately $714,000 for the nine months ended October 31, 2025 as compared to consolidated net loss for the nine months ended October 31, 2024 of approximately $557,000. Explanation of the differences between these Fiscal Years are explained above in the results of operations of the Trust.

Current wording

Cash used in operating activities from continuing operations totaled approximately $41,000 during the three months ended April 30, 2026 improved compared to net cash provided of approximately $280,000 during the three months ended April 30, 2025. Consolidated net income was approximately $75,000 for the three months ended April 30, 2026 as compared to consolidated net income for the three months ended April 30, 2025 of approximately $39,000. Explanation of the differences between these fiscal years are explained above in the results of operations of the Trust.

Previous wording

Changes in the adjustments to reconcile net income for the nine months ended October 31, 2025 and 2024, respectively, consist primarily of operating lease costs, stock-based compensation, hotel property depreciation, and changes in assets and liabilities. Hotel property non-cash depreciation was approximately $562,000 during the nine months ended October 31, 2025 compared to approximately $521,000 during the nine months ended October 31, 2024, an increase of $41,000 as the Trust recognized more depreciation for the increase of additional capitalized fixed assets.

Current wording

Changes in the adjustments to reconcile net income for the three months ended April 30, 2026 and 2025, respectively, consist primarily of operating lease costs, stock-based compensation, hotel property depreciation, and changes in assets and liabilities. Hotel property depreciation was approximately $195,000 during the three months ended April 30, 2026 compared to approximately $182,000 during the three months ended April 30, 2025, an increase of approximately $13,000 as the Trust recognized more depreciation due to increased hotel property investment.

Previous wording

Changes in assets and liabilities for accounts receivable, prepaid expenses and other assets and accounts payable and accrued expenses totaled approximately $114,000 and ($615,000) for the nine months ended October 31, 2025 and 2024, respectively. This significant decrease in changes in assets and liabilities for the nine months ended October 31, 2025 compared to the nine months ended October 31, 2024 was due to the decrease in operating liabilities related to ongoing operations.

Current wording

Changes in assets and liabilities for accounts receivable, prepaid expenses and other assets and accounts payable and accrued expenses totaled approximately $(316,000) and $58,000 for the three months ended April 30, 2026 and 2025, respectively. This significant decrease in changes in assets and liabilities for the three months ended April 30, 2026 compared to the three months ended April 30, 2025 was due to the decrease in operating liabilities related to ongoing operations.

Previous wording

Net cash used in investing activities totaled approximately $379,000 for the nine months ended October 31, 2025 compared to net cash used in investing activities of approximately $368,000 for the nine months ended October 31, 2024. The increase in net cash used in activities during the nine months ended October 31, 2025 was due primarily due to more capital improvements to our Hotel Properties as the Trust watched costs and cash flows.

Current wording

Net cash used in investing activities totaled approximately $75,000 for the three months ended April 30, 2026 compared to net cash used in investing activities of approximately $196,000 for the three months ended April 30, 2025. The decrease in net cash used in investing activities during the three months ended April 30, 2026 was due primarily to lower spending on capital improvements in the hotels.

Previous wording

Net cash provided by financing activities totaled approximately $518,000 and $145,000, respectively, for the nine months ended October 31, 2025 and 2024. The increase of approximately $373,000 was primarily due to freezing non-controlling interest distributions.

Current wording

Net cash used in financing activities totaled approximately $(193,000) and $(164,000), respectively, for the three months ended April 30, 2026 and 2025. The increase of approximately $29,000 was primarily due to higher payments on notes payable to related parties.

Previous wording

Principal payments on mortgage notes payable for continuing operations was approximately $202,000 and $157,000 during the nine months ended October 31, 2025 and 2024, respectively.

Current wording

Principal payments on mortgage notes payable for continuing operations were approximately $77,000 and $87,000 during the three months ended April 30, 2026 and 2025, respectively.

Previous wording

Borrowing and payments on notes payables–related party, netted against borrowings on note payable–related party, was approximately $818,000 and $750,000 of cash provided by financing activities during the nine months ended October 31, 2025 and 2024, respectively.

Current wording

Payments on notes payable–related party were approximately $113,000 and $67,000 of cash used in financing activities during the three months ended April 30, 2026 and 2025, respectively.

Previous wording

During the nine months ended October 31, 2025, our distributions to non-controlling interest holders was approximately $0 compared with approximately $312,000 for the nine months ended October 31, 2024.

Current wording

During the three months ended April 30, 2026, our distributions to non-controlling interest holders was approximately $0 compared with approximately $0 for the three months ended April 30, 2025.

Previous wording

We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of our Tucson InnSuites Hotel revenues from operation of the Hotel. The Fund is restricted by the mortgage lender for our Tucson property. As of October 31, 2025, and 2024, there were no monies held in these accounts reported on our unaudited 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, 2025 and 2024, the Hotel spent approximately $540,000 and $333,000 respectively, for capital expenditures. The capital expenditures were primarily associated with the property improvements at the Hotel, as required to meet continuing Best Western standards. We consider most of these improvements to be revenue producing. Therefore, these amounts are capitalized and depreciated over their estimated useful lives. For the remaining Fiscal Year 2025 capital expenditures, we plan on spending less on capital improvements as we have completed our property improvements at our Tucson, Arizona hotel and our Albuquerque hotel, both of which required significant amounts of capital improvements in prior periods. Repairs and maintenance were charged to expense as incurred and approximated $329,000 and $313,000 for the nine months ended October 31, 2025 and 2024, respectively.

Current wording

We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of our Tucson InnSuites Hotel revenues from operation of the Hotel. The Fund is restricted by the mortgage lender for our Tucson property. As of April 30, 2026, and 2024, there were no monies held in these accounts reported on our unaudited 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 three months ended April 30, 2026 and 2024, the Hotel spent approximately $64,000 and $196,000 respectively, for capital expenditures. The capital expenditures were primarily associated with the property improvements at the Hotel, as required to meet continuing Best Western standards. We consider most of these improvements to be revenue producing. Therefore, these amounts are capitalized and depreciated over their estimated useful lives. For the remaining Fiscal Year 2025 capital expenditures, we plan on spending less on capital improvements as we have completed our property improvements at our Tucson, Arizona hotel and our Albuquerque hotel, both of which required significant amounts of capital improvements in prior periods. Repairs and maintenance were charged to expense as incurred and approximated $96,000 and $109,000 for the three months ended April 30, 2026 and 2025, respectively.

Previous wording

We have minimum debt payments, net of debt discounts, of approximately $532,000 and approximately $2,230,000 due during Fiscal Years 2026 and 2027, respectively. Minimum debt payments due during Fiscal Year 2026 and 2027 include approximately $62,000 and $261,000 of mortgage notes payable, approximately $470,000 of other notes payable which are secured promissory notes outstanding to unrelated third parties, and approximately $1,969,000 of notes payable to a related party.

Current wording

We have minimum debt payments, net of debt discounts, of approximately $665,000 and approximately $2,796,000 due during Fiscal Years 2027 and 2028, respectively. Minimum debt payments due during Fiscal Year 2025 and 2026 include approximately $195,000 and $263,000 of mortgage notes payable, approximately $470,000 of other notes payable, which are unsecured promissory notes outstanding to unrelated third parties, and approximately $2,532,000 of notes payable-related party.

Previous wording

We may seek to negotiate additional credit facilities refinancing one or both hotels, 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.

Current wording

We may seek to negotiate additional credit facilities refinancing one or both hotels, 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 competitive terms as we consider prudent.