INNSUITES HOSPITALITY TRUST

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 Partnership.

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-K relating to the operations of the Partnership.

Previous wording

At October 31, 2024, we owned a direct 21.90% interest in the Albuquerque, New Mexico Hotel, and, together with the Partnership, owned an indirect 51.62% interest in the Tucson, Arizona Hotel.

Current wording

At April 30, 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.

Previous 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.

Current wording

Trust operations consist of one reportable segment – Hotel Ownership & Hotel 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 management services for the Trust’s two Hotels. As part of our management services, we also provide trademark and licensing services.

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 the virus-related travel slowdown in the Fiscal Year starting February 1, 2020, 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 in 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 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 in the Fiscal Year starting February 1, 2020, 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 in 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.

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.

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 are also extremely optimistic for the high profit potential from IBC management, and the five-year option to purchase at cost.

Previous wording

We expect the current Fiscal Year 2025 to be continued growth of the travel industry, stable high level Hotel occupancy, continued recovery and increases of room rates, as well as continuation of current cost control all leading to improved profitability of our hotels. We believe that we have positioned the Hotels to remain competitive through our 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 access.

Current wording

We expect the current Fiscal Year 2026 to be uncertain for the travel industry, stable high level Hotel occupancy, continued recovery and increases of room rates, as well as continuation of current cost control all leading to improved 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 complementary guest items, including complimentary hot breakfast and free 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. 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 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 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. 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 listing on the NYSE AMERICAN.

Previous wording

In the process of reviewing merger opportunities, the Trust identified in December 2019, and invested $1 million in UniGen Power, Inc. (“UniGen”), an innovative efficient clean energy power generation company. The Trust has invested $1 million in debentures convertible into 1 million shares of UniGen Power Inc., the Trust has invested in 575,000 UniGen shares, and in addition has acquired warrants to purchase approximately an additional up to 2 million UniGen shares over the next approximately two years, which could result in up to 15-20% or more ownership in UniGen. For more information on our strategic plan, including information on our progress in disposing of our hotel properties and expanding energy diversification, see “Future Positioning” in this Management Discussion and Analysis of Financial Condition and Results of Operations.

Current wording

In the process of reviewing merger opportunities, the Trust identified in December 2019, and invested $1 million in UniGen Power, Inc. (“UniGen”), an innovative efficient clean energy power generation company. The Trust has invested $1 million in debentures convertible into 1 million shares of UniGen Power Inc., the Trust has invested in 575,000 UniGen shares, and in addition has acquired warrants to purchase approximately an additional up to 2 million UniGen shares, which could result in up to 15-20% or more ownership in UniGen. For more information on our strategic plan, including information on our progress in disposing of our hotel properties, benefits from the IBC Hotels services, and expanding energy diversification, see “Future Positioning” in this Management Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

Our expenses consist primarily of labor, property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees, depreciation of the Hotels and hotel operating expenses. Hotel operating expenses consist primarily of payroll, guest and maintenance supplies, marketing, and utilities expenses. Under the terms of its Partnership Agreement, the Partnership is required to reimburse us for all such expenses. Accordingly, 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, 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.

Previous wording

No assurance can be given that occupancy, ADR and/or REVPAR will not increase or decrease as a result of changes in national or local economic or hospitality industry conditions.

Current wording

No assurance can be given that occupancy, ADR and/or REVPAR will or will not increase or decrease as a result of changes in national or local economic or hospitality industry conditions.

Previous wording

For the three months ended October 31, 2024, we had total revenue of approximately $1.82 million, which is relatively flat compared to approximately $1.82 million for the three months ended October 31, 2023. 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 three months ended October 31, 2024, we had an increase in total revenue resulting from the recovery of demand after the virus related travel restrictions imposed due to COVID-19, and benefitting from prior refurbishments.

Current wording

For the First Fiscal Quarter three months ended April 30, 2025, we had total revenue of approximately $2.21 million compared to approximately $2.29 million for the three months ended April 30, 2024, a decrease of approximately $0.08 million. In the prior fiscal years ended January 31, 2024, 2020 and 2019, we made significant improvements to our Albuquerque, New Mexico and Tucson, Arizona hotels. During the three months ended April 30, 2025, we had an increase in total revenue resulting from the recovery of demand, and benefitting from prior refurbishments.

Previous wording

Total Consolidated Net Loss for the three months ended October 31, 2024 was approximately ($217,000), compared to Consolidated Net Income of approximately $90,000 for the three months ended October 31, 2023, a decrease of approximately $307,000. Earnings Per Share based on this Consolidated Net Loss were down ($0.02) compared to the prior year similar three month period of $0.01. Earnings Per Share based on net loss attributable to Controlling Interest was ($0.03), down ($0.04) compared to the prior year similar three month period of $0.01.

Current wording

Total Consolidated Net Income for the three months ended April 30, 2025 was approximately $39,000 which is a decrease of approximately $48,000 compared to the same prior Fiscal Quarter for the same period of approximately $87,000. Earnings Per Share based on this Consolidated Net Income amount were $0.00, down $0.01 from the prior year of $0.01. Loss Per Share based on net loss attributable to Controlling Interest was $0.01, up from the prior year similar three month period of $0.02.

Previous wording

Total Trust Equity decreased to approximately $1,651,000 at the end of the nine months in the current Fiscal Year 2024, down approximately $1.6 million, from approximately $3,259,000 reported at the end of the nine months in the prior Fiscal Year 2024. Net loss before non-cash depreciation expense was approximately $43,000 for the nine months ended October 31, 2024, compared to net income before non-cash depreciation of expense of approximately $257,000 for the nine months ended October 31, 2023, which is a decrease of approximately $300,000.

Current wording

Total Trust Equity decreased to $674,508 at the end of Fiscal First Quarter 2025, down approximately $1.9 million, from the $2,563,397 reported at the end of the prior Fiscal First Quarter 2024. Net Income before non-cash depreciation expense was $61,268 for the Fiscal First Quarter ended April 30, 2025, compared to $24,492 for the Fiscal First Quarter ended April 30, 2024, which is a decrease of approximately $37,000.

Previous wording

We realized a 2% increase in room revenues during the nine months ended October 31, 2024, as room revenues were approximately $5.76 million for the nine months ending October 31, 2024 as compared to approximately $5.64 million for the nine months ending October 31, 2023. During Fiscal Year 2024, we expect modest additional improvements in occupancy, rates, and food and beverage revenues.

Current wording

We realized a 5% decrease in room revenues during the three months ended April 30, 2025 as room revenues were approximately $2.12 million for the three months ending April 30, 2025 as compared to approximately $2.24 million for the three months ending April 30, 2024. Despite decreased occupancy, food and beverage revenue increased 35% to approximately $30,000 for the three months ending April 30, 2025 as compared to approximately $23,000 during the three months ending April 30, 2024, an increase of approximately $7,000. During Fiscal Year 2025, 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 was approximately $1.95 million for the three months ended October 31, 2024 remaining relatively flat compared to total expenses net of interest expense of approximately $1.97 million for the three months ended October 31, 2023.

Current wording

Total expenses net of interest expense was approximately $2.0 million for the three months ended April 30, 2025 reflecting a decrease of approximately $0.1 million, or 6%, compared to total expenses net of interest expense of approximately $2.1 million for the three months ended April 30, 2024.

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 $570,000 for the three months ended October 31, 2024 compared to approximately $605,000 in the prior year three month period for an decrease of approximately $35,000, or 6%. Room expenses decreased as occupancy at the hotels slight decreased, and decreased expenses were incurred with the slight decreased occupancy.

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 $661,000 for the three months ended April 30, 2025 compared to approximately $665,000 in the prior year three month period for a decrease of approximately $4,000, or 1%. Room expenses decreased as occupancy at the hotels decreased, and decreased expenses were incurred with the decreased occupancy.

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, 2024, food and beverage expenses were approximately $20,000 for the three months ended October 31, 2024, compared to approximately $45,000 for the three months ended October 31, 2023.

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, 2025, food and beverage expenses remained relatively flat at $26,000 for the three months ended April 30, 2025, compared to approximately $28,000 for the three months ended April 30, 2024. 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 $536,000 for the three months ended October 31, 2024, decreased approximately $15,000 from approximately $551,000 for the three months ended October 31, 2023 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 $468,000 for the three months ended April 30, 2025, decreased approximately $138,000 from approximately $606,000 for the three months ended April 30, 2024 primarily due to cost savings efforts in corporate overhead costs.

Previous wording

Sales and marketing expense increased approximately $55,000, or 19%, to approximately $349,000 for the nine months ended October 31, 2024, from approximately $294,000 for the nine months ended October 31, 2023. Increased focus on sales and marketing due to the rebound in hotel occupancy drove the increase.

Current wording

Sales and marketing expense increased approximately $11,000, or 10%, to approximately $127,000 for the three months ended April 30, 2025 from approximately $116,000 for the three months ended April 30, 2024. Increased focus on sales and marketing drove the increase.

Previous wording

Repairs and maintenance expense decreased from approximately $127,000 reported for the three months ended October 31, 2023 compared to approximately $98,000 for the three months ended October 31, 2024. 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 increased by approximately $3,000, or 3%, from approximately $106,000 reported for the three months ended April 30, 2024 compared to approximately $109,000 for the three months ended April 30, 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.

Previous wording

Hotel property non-cash depreciation expenses increased by approximately $19,000 from approximately $502,000 reported for the nine months ended October 31, 2023, compared to approximately $521,000 for the nine months ended October 31, 2024. Increased depreciation resulted from additional capital expenditures being depreciated.

Current wording

Hotel property non-cash depreciation expenses increased by approximately $9,000 from approximately $173,000 reported for the three months ended April 30, 2024 compared to approximately $182,000 for the three months ended April 30, 2025.

Previous wording

Real estate and personal property taxes, Insurance and Ground Rent expenses increased approximately $48,000, or 29%, to approximately $175,000 reported for the three months ended October 31, 2024 compared with approximately $167,000 for the three months ended October 31, 2023 due to adjustments in our operating lease accounts.

Current wording

Real estate and personal property taxes, Insurance and Ground Rent expenses decreased approximately $5,000, or 2%, to approximately $158,000 reported for the three months ended April 30, 2025 compared with approximately $163,000 for the three months ended April 30, 2024.

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 potential intercompany loan repayments, potential future real estate hotel sales, 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. 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 including repayment of intercompany loan from Tucson.

Current 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 sales, 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. 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 including repayment of intercompany loan from Tucson.

Previous wording

Hotel operations were positively affected by improved occupancy and substantially increased room rates at the Hotels in the Fiscal Year 2024, and to a lesser extent, the First Three Fiscal Quarters of Fiscal 2025, ended October 31, 2024, as the travel industry continued to thrive.

Current 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 Fiscal Quarter of Fiscal 2026, ended April 30, 2025, as the travel industry momentum stabilizes.

Previous wording

With approximately $0.5 million of cash as of October 31, 2024 and the availability of three $250,000 bank lines of credit, and $1,200,000 available from the $2,000,000 related party Demand/Revolving Line of Credit/Promissory Note, and the availability of Advances to Affiliate credit facilities and available Bank line 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 other strategic options available to us, including raising additional funds, asset sales, and benefiting from clean energy investment cash flow as our diversification investment progresses. However, such transactions may not be available on terms that are favorable to us, or at all.

Current wording

With approximately $13,000 of cash as of April 30, 2025 and the availability of three $250,000 bank lines of credit, and approximately $700,000 available from the $2,000,000 related party Demand/Revolving Line of Credit/Promissory Note, and the availability of Advances to Affiliate credit facilities and available Bank line 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 other strategic options available to us, including raising additional funds, asset sales, and benefitting from clean energy investment cash flow as our diversification investment matures. However, such transactions may not be available on terms that are favorable to us, or at all.

Previous wording

We anticipate steady leisure travel demand, modestly increased hotel rates, and limited additional new-build hotel supply in our markets during the current Fiscal Year 2025, and accordingly we anticipate a continued increase of revenues. We expect challenges for the remaining Fiscal Year to be the economy, inflation, and cost control. Travel, leisure, corporate, group, and government business continued to grow and may further increase room rates while maintaining and/or building market share in Fiscal Year 2025.

Current wording

We anticipate stable leisure travel demand, and limited additional new-build hotel supply in our markets during the current Fiscal Year 2025, and accordingly we anticipate stable revenues and operating margins. We expect challenges for the remaining Fiscal Year to be the economy, tariffs affecting travel, inflation, and cost control.

Previous wording

Cash used in operating activities totaled approximately $651,000 during the nine months ended October 31, 2024 as compared to net cash provided of approximately $1,511,000 during the nine months ended October 31, 2023. Consolidated net loss was approximately $557,000 for the nine months ended October 31, 2024 as compared to consolidated net income for the nine months ended October 31, 2023 of approximately $612,000. Explanation of the differences between these Fiscal Years are explained above in the results of operations of the Trust.

Current wording

Cash provided by operating activities from continuing operations totaled approximately $280,000 during the three months ended April 30, 2025 as compared to net cash used of approximately $459,000 during the three months ended April 30, 2024. Consolidated net income was approximately $39,000 for the three months ended April 30, 2025 as compared to consolidated net income for the three months ended April 30, 2024 of approximately $87,000. 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, 2024 and 2022, 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 $521,000 during the nine months ended October 31, 2024 compared to approximately $502,000 during the nine months ended October 31, 2023, a increase of $19,000 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, 2025 and 2024, respectively, consist primarily of operating lease costs, stock-based compensation, hotel property depreciation, and changes in assets and liabilities. Hotel property depreciation was approximately $182,000 during the three months ended April 30, 2025 compared to approximately $173,000 during the three months ended April 30, 2024, an increase of $9,000 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 ($615,000) and ($497,000) for the nine months ended October 31, 2024 and 2022, respectively. This significant decrease in changes in assets and liabilities for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023 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 $58,000 and $719,000 for the three months ended April 30, 2025 and 2024, respectively. This significant decrease in changes in assets and liabilities for the three months ended April 30, 2025 compared to the three months ended April 30, 2024 was due to the decrease in operating liabilities related to ongoing operations.

Previous wording

Net cash used in investing activities totaled approximately $368,000 for the nine months ended October 31, 2024 compared to net cash used in investing activities of approximately $390,000 for the nine months ended October 31, 2023. The decrease in net cash used in activities during the nine months ended October 31, 2024 was due primarily due to less capital improvements to our Hotel Properties as the Trust watched costs and cash flows.

Current wording

Net cash used in investing activities totaled approximately $196,000 for the three months ended April 30, 2025 compared to net cash used in investing activities of approximately $186,000 for the three months ended April 30, 2024. The increase in net cash used in activities during the three months ended April 30, 2025 was due primarily due to capital improvements in the hotels.

Previous wording

Net cash provided by (used in) financing activities totaled approximately $145,000 and ($1,328,000), respectively, for the nine months ended October 31, 2024 and 2023. The increase of approximately $1,473,000 was primarily due to borrowing on the Notes Payable Related Party.

Current wording

Net cash used in financing activities totaled approximately ($164,000) and ($243,000), respectively, for the three months ended April 30, 2025 and 2024. The decrease of approximately $79,000 was primarily due to deferring the payment of distributions to non-controlling interest holders.

Previous wording

Principal payments on mortgage notes payable for continuing operations was approximately $157,000 and $169,000 during the nine months ended October 31, 2024 and 2023, respectively.

Current wording

Principal payments on mortgage notes payable for continuing operations was approximately $87,000 and $65,000 during the three months ended April 30, 2025 and 2024, respectively.

Previous wording

Borrowing and payments on notes payables–related party, netted against borrowings on note payable–related party, was approximately $750,000 and ($100,000) of cash used in financing activities during the nine months ended October 31, 2024 and 2023, respectively.

Current wording

Payments on notes payable–related party, was approximately $67,000 and $0 of cash used in financing activities during the three months ended April 30, 2025 and 2024, respectively.

Previous wording

During the nine months ended October 31, 2024, our distributions to non-controlling interest holders was approximately $312,000 compared with approximately $569,000 for the nine months ended October 31, 2023.

Current wording

During the three months ended April 30, 2025, our distributions to non-controlling interest holders was approximately $0 compared with approximately $153,000 for the three months ended April 30, 2024. We anticipate a reduction in distributions to non-controlling interest holders for the balance of the current Fiscal Year 2026.

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, 2024, and 2023, 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, 2024 and 2023, the Hotel spent approximately $333,000 and $360,000 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 $313,000 and $338,000 for the nine months ended October 31, 2024 and 2023, 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, 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 three months ended April 30, 2025 and 2024, the Hotel spent approximately $196,000 and $151,000 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 $109,000 and $106,000 for the three months ended April 30, 2025 and 2024, respectively.

Previous wording

We have minimum debt payments, net of debt discounts, of approximately $59,000 and approximately $1,468,000 due during Fiscal Years 2025 and 2026, respectively. Minimum debt payments due during Fiscal Year 2025 and 2026 include approximately $59,000 and $248,000 of mortgage notes payable, and approximately $470,000 of other notes payable, which are secured promissory notes outstanding to unrelated third parties arising from the Shares of Beneficial Interest and Partnership unit repurchases, and $750,000 of Notes Payables due to Related Parties

Current wording

We have minimum debt payments, net of debt discounts, of approximately $656,000 and approximately $1,345,000 due during Fiscal Years 2026 and 2027, respectively. Minimum debt payments due during Fiscal Year 2025 and 2026 include approximately $186,000 and $261,000 of mortgage notes payable, approximately $470,000 of other notes payable, which are unsecured promissory notes outstanding to unrelated third parties, and approximately $1,084,000 of notes payable-related party.

Previous wording

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.

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 terms as we consider prudent.

Previous wording

The hotel industry is highly competitive. Both the Tucson and Albuquerque hotels experienced record high Gross Operating Profit (GOP Profits), in Fiscal Year 2024 (February 1, 2023 to January 31, 2024), substantially higher than both Covid and Pre-Covid GOP Profits. This gross operating profit is growing even more due to cost control measures. The drastic impact of COVID-19 to the world economy and hospitality industry resulted in severely reduced occupancy and significant reduction in room rates, both of which have now fully recovered. Continued competition in corporate, leisure, group, and government business in the markets in which we operate, may affect our ability to maintain room rates and maintain market share. Each of the Hotels faces competition primarily from other mid-market hotels located in its immediate vicinity, but also competes with hotel properties located in other geographic markets, and increasingly from alternative lodging facilities, such as Airbnb. While none of the Hotels’ competitors dominate any of their geographic markets, some of those competitors may have greater marketing and/or financial resources than the Trust.

Current wording

The hotel industry is highly competitive. Both the Tucson and Albuquerque hotels experienced record high Gross Operating Profit (GOP Profits), in Fiscal Year 2025 (February 1, 2024 to January 31, 2025), substantially higher than both Covid and Pre-Covid GOP Profits. Fiscal 2026 is uncertain, but appears stable thus far. Continued competition in corporate, leisure, group, and government business in the markets in which we operate, may affect our ability to maintain room rates and maintain market share. Each of the Hotels faces competition primarily from other mid-market hotels located in its immediate vicinity, but also competes with hotel properties located in other geographic markets, and increasingly from alternative lodging facilities, such as Airbnb. While none of the Hotels’ competitors dominate any of their geographic markets, some of those competitors may have greater marketing and/or financial resources than the Trust.

Previous wording

Certain hotel property refurbishments have been completed by competitors in both Hotels’ markets, and additional hotel property developments may be built in the future. Such hotel developments could have an adverse effect on the revenue of our Hotels in their respective markets.

Current wording

Hotel property refurbishments have been completed by competitors in both Hotels’ markets, and additional hotel property developments may be built in the future. Such hotel developments could have an adverse effect on the revenue of our Hotels in their respective markets.

Previous wording

The Trust’s hotel investments are located in Arizona and New Mexico. With the completed renovations meeting Best Western standards at our Tucson, Arizona and Albuquerque, New Mexico hotel properties, those hotels are expected to see incremental demand during the next 18 months. Supply has been relatively steady in those respective markets. Either a significant increase in supply or a significant decline in demand could result in increased competition, which could have an adverse effect on occupancy, room rates and revenues of our Hotels in their respective markets. The continued recovery has and is benefiting our hotels in the First Three Fiscal Quarters of Fiscal 2025, February 1, 2024 to October 31, 2024. This improvement and continued upward trend is expected to continue for the balance of Fiscal Year 2025, through January 31, 2025.

Current wording

The Trust’s hotel investments are located in Arizona and New Mexico. With the completed renovations meeting Best Western standards at our Tucson, Arizona and Albuquerque, New Mexico hotel properties, those hotels are expected to see incremental demand during the next 18 months. Supply has been relatively steady in those respective markets. Either an increase in supply or a decline in demand could result in increased competition, which could have an adverse effect on occupancy, room rates and revenues of our Hotels in their respective markets. Occupancy, rates, and cost control are stable at our hotels in the First Fiscal Quarter of 2026, (February 1, 2025 to April 30, 2025). This is expected to continue for the balance of Fiscal Year 2026, through January 31, 2026.