Ohio
|
34-6647590
|
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification Number)
|
|
incorporation or organization)
|
||
InnSuites Hotels Centre
|
||
1625 E. Northern Avenue, Suite 105
|
||
Phoenix, AZ 85020
|
||
(Address of principal executive offices)
|
||
Registrant’s telephone number, including area code:
(602) 944-1500
|
JULY 31, 2012
|
JANUARY 31, 2012
|
||||||
(UNAUDITED)
|
(AUDITED)
|
||||||
ASSETS
|
|||||||
Current Assets:
|
|||||||
Cash and Cash Equivalents (($15,212) and $133,637 of variable interest entity (VIE), Note 9)
|
$
|
196,333
|
$
|
983,424
|
|||
Restricted Cash ($11,937 and $31,300 of VIE)
|
92,567
|
136,808
|
|||||
Accounts Receivable, including $587,511 and $102,358 from related parties and net of Allowance for Doubtful Accounts of $17,805 and $38,159, as of July 31, and January 31, 2012, respectively ($76,380 and $12,653 of VIE)
|
1,065,208
|
619,916
|
|||||
Prepaid Expenses and Other Current Assets ($54,589 and $23,366 of VIE)
|
366,029
|
242,366
|
|||||
Total Current Assets
|
1,720,137
|
1,982,514
|
|||||
Hotel Properties, net ($1,378,922 and $1,415,155 of VIE)
|
24,947,760
|
25,141,748
|
|||||
Property, Plant and Equipment, net
|
134,073
|
149,377
|
|||||
Deferred Finance Costs and Other Assets ($15,045 and $15,858 of VIE)
|
194,878
|
108,619
|
|||||
TOTAL ASSETS
|
$
|
26,996,848
|
$
|
27,382,258
|
|||
LIABILITIES AND EQUITY
|
|||||||
LIABILITIES
|
|||||||
Current Liabilities:
|
|||||||
Accounts Payable and Accrued Expenses ($253,895 and $112,643 of VIE)
|
$
|
2,015,435
|
$
|
2,414,763
|
|||
Notes Payable to Banks
|
355,945
|
—
|
|||||
Current Portion of Mortgage Notes Payable
|
1,051,199
|
2,291,247
|
|||||
Current Portion of Other Notes Payable
|
209,954
|
212,692
|
|||||
Total Current Liabilities
|
3,632,533
|
4,918,702
|
|||||
Mortgage Notes Payable
|
18,952,972
|
18,980,009
|
|||||
Other Notes Payable
|
244,255
|
337,960
|
|||||
TOTAL LIABILITIES
|
22,829,760
|
24,236,671
|
|||||
Commitments and Contingencies (See Note 11)
|
|||||||
SHAREHOLDERS’ EQUITY
|
|||||||
Shares of Beneficial Interest, without par value; unlimited authorization; 8,406,365 and 8,442,328 shares issued and outstanding at July 31, and January 31, 2012, respectively
|
15,718,419
|
14,646,261
|
|||||
Treasury Stock, 8,398,381 and 8,344,408 shares held at July 31, and January 31, 2012, respectively
|
(11,811,337
|
)
|
(11,682,575
|
)
|
|||
TOTAL TRUST SHAREHOLDERS’ EQUITY
|
3,907,082
|
2,963,686
|
|||||
NON-CONTROLLING INTEREST
|
260,006
|
181,901
|
|||||
TOTAL EQUITY
|
4,167,088
|
3,145,587
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
26,996,848
|
$
|
27,382,258
|
FOR THE SIX MONTHS ENDED
July 31,
|
|||||||
2012
|
2011
|
||||||
REVENUE
|
|||||||
Room
|
$
|
7,314,135
|
$
|
7,214,384
|
|||
Food and Beverage
|
603,035
|
470,554
|
|||||
Telecommunications
|
—
|
1,828
|
|||||
Other
|
107,333
|
115,544
|
|||||
Management and Trademark Fees, including $159,631 and $115,832 from related parties for the six months ended July 31, 2012 and 2011, respectively
|
166,624
|
115,832
|
|||||
Payroll Reimbursements, Related Party
|
—
|
1,116,081
|
|||||
TOTAL REVENUE
|
8,191,127
|
9,034,223
|
|||||
OPERATING EXPENSES
|
|||||||
Room
|
1,939,662
|
1,832,694
|
|||||
Food and Beverage
|
521,742
|
455,557
|
|||||
Telecommunications
|
36,076
|
23,899
|
|||||
General and Administrative
|
1,614,296
|
1,606,825
|
|||||
Sales and Marketing
|
597,315
|
549,796
|
|||||
Repairs and Maintenance
|
767,220
|
789,355
|
|||||
Hospitality
|
442,220
|
415,843
|
|||||
Utilities
|
627,996
|
605,913
|
|||||
Hotel Property Depreciation
|
867,187
|
886,550
|
|||||
Real Estate and Personal Property Taxes, Insurance and Ground Rent
|
544,989
|
407,083
|
|||||
Other
|
5,053
|
7,566
|
|||||
Payroll Expenses, Related Party
|
—
|
1,116,081
|
|||||
TOTAL OPERATING EXPENSES
|
7,963,756
|
8,697,162
|
|||||
OPERATING INCOME
|
227,371
|
337,061
|
|||||
Interest Income
|
5,402
|
560
|
|||||
TOTAL OTHER INCOME
|
5,402
|
560
|
|||||
Interest on Mortgage Notes Payable
|
465,915
|
755,628
|
|||||
Interest on Notes Payable to Banks
|
1,094
|
—
|
|||||
Interest on Other Notes Payable
|
18,088
|
15,826
|
|||||
TOTAL INTEREST EXPENSE
|
485,097
|
771,454
|
|||||
CONSOLIDATED NET LOSS
|
(252,324
|
)
|
|
(433,833
|
)
|
||
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS
|
(30,547
|
)
|
(124,952
|
)
|
|||
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS
|
$
|
(221,777
|
)
|
$
|
(308,881
|
)
|
|
NET LOSS PER SHARE – BASIC AND DILUTED
|
$
|
(0.03
|
)
|
$
|
(0.04
|
)
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC AND DILUTED
|
8,429,911
|
8,552,780
|
FOR THE THREE MONTHS ENDED
July 31,
|
|||||||
2012
|
2011
|
||||||
REVENUE
|
|||||||
Room
|
$
|
3,030,877
|
$
|
3,218,212
|
|||
Food and Beverage
|
243,681
|
177,679
|
|||||
Telecommunications
|
—
|
300
|
|||||
Other
|
42,776
|
64,881
|
|||||
Management and Trademark Fees, including $47,175 and $48,896 from related parties for the three months ended July 31, 2012 and 2011, respectively
|
54,168
|
48,896
|
|||||
Payroll Reimbursements, Related Party
|
—
|
525,473
|
|||||
TOTAL REVENUE
|
3,371,502
|
4,035,441
|
|||||
OPERATING EXPENSES
|
|||||||
Room
|
962,446
|
853,259
|
|||||
Food and Beverage
|
258,663
|
198,281
|
|||||
Telecommunications
|
19,256
|
13,701
|
|||||
General and Administrative
|
817,924
|
768,620
|
|||||
Sales and Marketing
|
313,404
|
253,743
|
|||||
Repairs and Maintenance
|
371,223
|
363,731
|
|||||
Hospitality
|
215,197
|
192,506
|
|||||
Utilities
|
344,326
|
328,810
|
|||||
Hotel Property Depreciation
|
433,530
|
437,518
|
|||||
Real Estate and Personal Property Taxes, Insurance and Ground Rent
|
257,857
|
201,504
|
|||||
Other
|
2,645
|
4,436
|
|||||
Payroll Expenses, Related Party
|
—
|
525,473
|
|||||
TOTAL OPERATING EXPENSES
|
3,996,471
|
4,141,582
|
|||||
OPERATING LOSS
|
(624,969
|
)
|
(106,141
|
)
|
|||
Interest Income
|
5,294
|
417
|
|||||
TOTAL OTHER INCOME
|
5,294
|
417
|
|||||
Interest on Mortgage Notes Payable
|
267,946
|
376,566
|
|||||
Interest on Notes Payable to Banks
|
890
|
||||||
Interest on Other Notes Payable
|
8,635
|
7,667
|
|||||
TOTAL INTEREST EXPENSE
|
277,471
|
384,233
|
|||||
CONSOLIDATED NET LOSS
|
(897,146
|
)
|
|
(489,957
|
)
|
||
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS
|
(213,281
|
)
|
(130,970
|
)
|
|||
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS
|
$
|
(683,865
|
)
|
$
|
(358,987
|
)
|
|
NET LOSS PER SHARE – BASIC AND DILUTED
|
$
|
(0.08
|
)
|
$
|
(0.04
|
)
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC AND DILUTED
|
8,417,899
|
8,528,609
|
FOR THE SIX MONTHS ENDED
JULY 31,
|
||||||||
2012
|
2011
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Consolidated Net Loss
|
$
|
(252,324
|
)
|
$
|
(433,833
|
)
|
||
Adjustments to Reconcile Consolidated Net Loss to Net Cash Provided By (Used In) Operating Activities:
|
||||||||
Provision for Uncollectible Receivables
|
(21,075
|
)
|
(25,222
|
)
|
||||
Stock-Based Compensation
|
19,800
|
25,920
|
||||||
Hotel Property Depreciation
|
867,187
|
886,550
|
||||||
Amortization of Deferred Loan Fees
|
36,256
|
22,582
|
||||||
Changes in Assets and Liabilities:
|
||||||||
Accounts Receivable
|
(179,644
|
)
|
(72,513
|
)
|
||||
Prepaid Expenses and Other Assets
|
(246,178
|
)
|
101,446
|
|||||
Accounts Payable and Accrued Expenses
|
(158,628
|
)
|
(168,747
|
)
|
||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
65,394
|
336,183
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Payments Received on Notes Receivable from Related Party
|
454,577
|
—
|
||||||
Loans Made on Notes Receivable to Related Party
|
(699,150
|
)
|
—
|
|||||
Change in Restricted Cash
|
44,241
|
63,031
|
||||||
Improvements and Additions to Hotel Properties
|
(657,895
|
)
|
(481,955
|
)
|
||||
NET CASH USED IN INVESTING ACTIVITIES
|
(858,227
|
)
|
(418,924
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Principal Payments on Mortgage Notes Payable
|
(1,507,785
|
)
|
(381,591
|
)
|
||||
Payments on Notes Payable to Banks
|
(805,027
|
)
|
—
|
|||||
Borrowings on Notes Payable to Banks
|
1,160,972
|
—
|
||||||
Purchase of Treasury Stock
|
(128,762
|
)
|
(56,702
|
)
|
||||
Purchase of Partnership Units
|
(525
|
)
|
—
|
|||||
Proceeds from Sale of Non-Controlling Ownership Interests in Subsidiaries
|
1,604,068
|
1,307,397
|
||||||
Distributions to Non-Controlling Interest
|
(205,256
|
)
|
(98,860
|
)
|
||||
Payments on Other Notes Payable
|
(111,943
|
)
|
(88,255
|
)
|
||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
5,742
|
681,989
|
||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(787,091
|
)
|
599,248
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
983,424
|
494,844
|
||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
196,333
|
$
|
1,094,092
|
Restricted Shares
|
||
Shares
|
Weighted-Average Per Share Grant Date Fair Value
|
|
Balance at January 31, 2012
|
—
|
—
|
Granted
|
18,000
|
$2.20
|
Vested
|
(9,000)
|
$2.20
|
Forfeited
|
—
|
—
|
Balance of unvested awards at July 31, 2012
|
9,000
|
$2.20
|
Fiscal Year Ending
|
||||
Remainder of 2013
|
$
|
119,880
|
||
2014
|
247,760
|
|||
2015
|
228,160
|
|||
2016
|
206,560
|
|||
2017
|
206,560
|
|||
Thereafter
|
5,134,332
|
|||
Total
|
$
|
6,143,252
|
FOR THE SIX MONTHS ENDED | |||||||||
JULY 31,
|
|||||||||
2012
|
2011
|
||||||||
OCCUPANCY
|
68.51 | % | 64.85 | % | |||||
AVERAGE DAILY RATE (ADR)
|
$ | 69.58 | $ | 72.91 | |||||
REVENUE PER AVAILABLE ROOM (REVPAR)
|
$ | 47.67 | $ | 47.28 |
2012
|
2011
|
Change
|
% Change
|
|||||||||
Revenue
|
$
|
8,191,127
|
$
|
9,034,223
|
$
|
(843,096
|
)
|
(9.3)
|
%
|
|||
Operating Income
|
$
|
227,371
|
$
|
337,061
|
$
|
(109,690
|
)
|
(32.5)
|
%
|
|||
Total Expenses
|
$
|
8,448,853
|
$
|
9,468,616
|
$
|
(1,019,763
|
)
|
(10.8)
|
%
|
|||
Net Loss Attributable to Controlling Interest
|
$
|
(221,777
|
)
|
$
|
(308,881
|
)
|
$
|
87,104
|
(28.2)
|
%
|
||
Net Loss Per Share – Basic and Diluted
|
$
|
(0.03
|
)
|
$
|
(0.04
|
)
|
$
|
0.01
|
(25.0)
|
%
|
2012
|
2011
|
Change
|
% Change
|
|||||||||
Revenue
|
$
|
3,371,502
|
$
|
4,035,441
|
$
|
(663,939
|
)
|
(16.5)
|
%
|
|||
Operating Loss
|
$
|
(624,969
|
)
|
$
|
(106,141
|
)
|
$
|
(518,828
|
)
|
>100
|
%
|
|
Total Expenses
|
$
|
4,273,942
|
$
|
4,525,815
|
$
|
(251,873
|
)
|
(5.6)
|
%
|
|||
Net Loss Attributable to Controlling Interest
|
$
|
(683,865
|
)
|
$
|
(358,987
|
)
|
$
|
(324,878
|
)
|
90.5
|
%
|
|
Net Loss Per Share – Basic and Diluted
|
$
|
(0.08
|
)
|
$
|
(0.04
|
)
|
$
|
(0.04
|
)
|
100.0
|
%
|
2012
|
2011
|
|||||||
Net Loss attributable to controlling interest
|
$
|
(221,777
|
)
|
$
|
(308,881
|
)
|
||
Add back:
|
||||||||
Depreciation
|
867,187
|
886,550
|
||||||
Interest expense
|
485,097
|
771,454
|
||||||
Non-controlling interest
|
(30,547
|
)
|
(124,952
|
)
|
||||
Less:
|
||||||||
Interest income
|
(5,402
|
)
|
(560
|
)
|
||||
ADJUSTED EBITDA
|
$
|
1,094,558
|
$
|
1,223,611
|
•
|
local or national economic and business conditions, including, without limitation, conditions which may affect public securities markets generally, the hospitality industry or the markets in which we operate or will operate;
|
•
|
fluctuations in hotel occupancy rates;
|
•
|
changes in room rental rates that may be charged by InnSuites Hotels in response to market rental rate changes or otherwise;
|
•
|
seasonality of our business;
|
•
|
interest rate fluctuations;
|
•
|
changes in government regulations, including federal income tax laws and regulations;
|
•
|
competition;
|
•
|
any changes in our financial condition or operating results due to acquisitions or dispositions of hotel properties;
|
•
|
insufficient resources to pursue our current strategy;
|
•
|
concentration of our investments in the InnSuites Hotels® brand;
|
•
|
loss of franchise or membership contracts;
|
•
|
real estate and hospitality market conditions;
|
•
|
hospitality industry factors;
|
•
|
our ability to have access to a line of credit;
|
•
|
our ability to meet present and future debt service obligations;
|
•
|
our inability to refinance indebtedness at or prior to the time it matures;
|
•
|
terrorist attacks or other acts of war;
|
•
|
outbreaks of communicable diseases;
|
•
|
natural disasters;
|
•
|
data breaches; and
|
•
|
loss of key personnel.
|
|
ITEM 1.
LEGAL PROCEEDINGS
|
|
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Issuer Purchases of Equity Securities
|
|||||||||
Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans
|
Maximum Number of
Shares that May Be
Yet Purchased
Under the Plans
|
|||||
May 1 – May 31, 2012
|
6,130
|
$
|
2.21
|
6,130
|
74,888
|
||||
June 1 – June 30, 2012
|
10,625
|
$
|
2.37
|
10,625
|
64,263
|
||||
July 1 – July 31, 2012
|
4,285
|
$
|
2.43
|
4,285
|
59,978
(1)
|
|
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
|
|
ITEM 4.
MINE SAFETY DISCLOSURES
|
|
ITEM 5.
OTHER INFORMATION
|
|
ITEM 6
.
EXHIBITS
|
a)
|
Exhibits
|
10.1
|
Change in Terms Agreement for Bank Line of Credit, dated June 22, 2012, executed by InnSuites Hospitality Trust, Yuma Hospitality Properties Limited Partnership and RRF Limited Partnership, as Borrowers, and James F. Wirth, as Guarantor, in favor of RepublicBankAZ, N.A., as Lender (incorporated by reference to Exhibit 10.1 of the Trust’s Form 8-K filed with the Securities and Exchange Commission on June 25, 2012)
|
|
10.2
|
Addendum, dated August 27, 2012, to Business Loan Agreement, dated November 23, 2010, by and among InnSuites Hospitality Trust, Yuma Hospitality Properties Limited Partnership and RRF Limited Partnership, as Borrowers, and RepublicBankAZ, N.A., as Lender
|
|
31.1
|
Section 302 Certification By Chief Executive Officer
|
|
31.2
|
Section 302 Certification By Chief Financial Officer
|
|
32.1
|
Section 906 Certification of Principal Executive Officer and Principal Financial Officer
|
|
101
|
XBRL Exhibits: *
|
|
101.INS
|
XBRL Instance Document*
|
|
101.SCH
|
XBRL Schema Document*
|
|
101.CAL
|
XBRL Calculation Linkbase Document*
|
|
101.LAB
|
XBRL Labels Linkbase Document*
|
|
101.PRE
|
XBRL Presentation Linkbase Document*
|
|
101.DEF
|
XBRL Definition Linkbase Document*
|
INNSUITES HOSPITALITY TRUST
|
||||
Dated:
|
June 14, 2012
|
/s/ James F. Wirth
|
||
James F. Wirth
|
||||
Chairman and Chief Executive Officer
|
||||
Dated:
|
June 14, 2012
|
/s/ Anthony B. Waters
|
||
Anthony B. Waters
|
||||
Chief Financial Officer
|
A.
|
Borrower and Lender have entered into that certain Business Loan Agreement, dated November 23, 2010 (the “Loan Agreement”).
|
B.
|
Borrower and Lender, by this Addendum, desire to amend certain provisions of the Loan Agreement as follows.
|
Date:
|
September 14, 2012
|
|||
/s/ James F. Wirth
|
||||
James F. Wirth
|
||||
Chairman and Chief Executive Officer
|
Date:
|
September 14, 2012
|
|||
/s/ Anthony B. Waters
|
||||
Anthony B. Waters
|
||||
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.
|
Dated:
|
September 14, 2012
|
/s/ James F. Wirth
|
||
James F. Wirth
|
||||
Chairman and Chief Executive Officer
|
||||
/s/ Anthony B. Waters
|
||||
Anthony B. Waters
|
||||
Chief Financial Officer
|