InnSuites Hospitality Trust (IHT) 2025 10-K Review: Business, Performance & Outlook

In this deep-dive blog post we unpack InnSuites Hospitality Trust’s recent 10-K (fiscal year ended January 31, 2025), covering:

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• Who they are and what they own
• Key financial results & MD&A highlights
• Balance sheet & liquidity analysis
• Cash flow & non-GAAP measures
• Risk factors to watch
• Strategic initiatives: asset sales & clean energy investment
• Investment score & verdict

1. Business & Corporate Structure (Item 1)

InnSuites Hospitality Trust (NYSE-American: IHT) is an unincorporated Ohio REIT taxed as a C-corporation.

• Headquarters: Phoenix, Arizona • Formed: 1971; traded on NYSE-American under symbol IHT • Hotels:

• Controls a 51.62% interest in the 180-suite Tucson Oracle hotel via its 75.89% general partner stake in RRF LLLP (the “Partnership”)
• Owns a direct 21.90% interest in the 90-suite Albuquerque Airport hotel • Operations: Moderate service, suite-style hotels with OK franchise agreements (Best Western), self-managed through RRF LLLP • Employees: ~52 full-time and 27 part-time at corporate & hotel level • Primary objective: Maximize returns via operations, asset appreciation, and eventual sale of one or both hotels within 36 months.

2. FY 2025 Performance Snapshot (Item 7)

2.1 Revenue & Profitability

| Metric | FY 2025 | FY 2024 | ∆ | %∆ | | —————— | —————— | —————— | ——— | ———— | | Total Revenue | $7.594 M | $7.484 M | +$0.109 M | +1% | | Room Revenue | $7.336 M | $7.292 M | +$0.044 M | +1% | | Food & Beverage | $0.090 M | $0.079 M | +$0.011 M | +14% | | Other Revenue | $0.167 M | $0.114 M | +$0.053 M | +47% | | Operating Loss | $(0.743 M) | $(0.721 M) | $(0.022 M) | 3% worse | | Net ( Loss) Income | $(1.392 M) | +$0.277 M | $(1.669 M) | –602% |

Drivers:

• ADR up 2.3%, occupancy down slightly
• Hotel GOP (gross operating profit) reached record highs due to cost control
• Net loss driven by high depreciation ($706 K), interest ($476 K), and one-off Best Western rewards credit ($209 K)
• No more Employee Retention Credit this year (present in FY 2024)

2.2 Non-GAAP Measures

Adjusted EBITDA (loss before interest, taxes, depreciation & other)

• FY 2025: $(224 K) vs FY 2024: +$1.288 M

FFO (Funds From Operations, per NAREIT)

• FY 2025: $(686 K) vs FY 2024: +$0.956 M

Why FFO matters: REIT-like comparison metric that adds back depreciation to net income to show operating cash flow from real estate.

3. Balance Sheet & Liquidity (Items 7 & 8)

| Metric | FY 2025 | FY 2024 | | —————— | —————— | —————— | | Cash & Equivalents | $0.093 M | $1.325 M | | Total Assets | $14.194 M | $15.680 M | | Hotel PPE, net | $6.789 M | $7.017 M | | Total Liabilities | $13.548 M | $13.025 M | | Equity | $0.645 M | $2.655 M |

Key debt:

• Mortgage on Tucson: $7.888 M, 4.99% fixed
• Mortgage on Albuquerque: $1.156 M, 7.3% (refinanced Dec 2024)

Affiliate funding: $1.151 M line of credit with Rare Earth LLC at 7%!

Liquidity:

• Cash: $93 K
• Renewable credit lines: 3 × $250 K = $750 K
• Affiliate LoC: $2.0 M max ($1.151 M outstanding)
• Note receivable: $1.925 M from IBC sale

Despite low cash, the Trust can tap $2.75 M in near-term lines & hold $1.925 M note. Sufficient for 12 months—but low cushion vs. capex, interest & payroll.

4. Cash Flow (Item 8)

FY 2025 Operating CF: $(1.059 M) (FY 2024: +$1.432 M)

• Higher non-cash depreciation
• One-off Best Western credit
• Employee Retention Credit absent

FY 2025 Investing CF: $(0.501 M)

• Property improvements: $0.466 M
• UniGen note purchase: $0.035 M

FY 2025 Financing CF: +$0.327 M

• Affiliate LoC borrowings: +$1.151 M
• Mortgage principal payments: –$0.206 M
• Dividends: –$0.178 M
• Repurchase of shares: –$0.045 M
• Non-controlling distributions: –$0.395 M

Dividend policy:

• Semiannual $0.01/share in Feb & Aug; paid last on 2/5/25
• 55 consecutive annual years of distributions

5. Risk Factors (Item 1A)

Key risks:

• Travel downturns: virus, natural disasters, terrorism
• Competition: Airbnb & new mid-market builds
• Capital needs: limited cash, reliance on affiliate LoC
• Regulatory & environmental: ADA compliance, safety laws
• Staffing & wages: tight labor market, minimum wage hikes
• Asset sales: sale of one or both hotels within 36 months uncertain
• Investment risk: UniGen Power stake ($1.7 M) in untested clean-energy startup

6. Strategic Initiatives & Diversification

6.1 Asset Sale Roadmap

Book values vs. Asking

| Hotel | Book Value | Mortgage Bal. | Asking Price | | —————— | —————— | —————— | —————— | | Tucson | $5.848 M | $7.888 M | $18.5 M | | Albq. | $0.940 M | $1.156 M | $9.5 M |

Why sell? unlock >2× book value, pay down costly debt, boost cash/returns.

6.2 UniGen Power, Inc.

$1.668 M total investment in convertible debentures, warrants, & 575 K shares

• Debentures: $1 M at 6% convertible to 1 M shares @ $1.00/share • Warrants: 1 M shares @ $1.00/share; 0.5 M shares @ $2.25/share • Possible 15–20% fully diluted ownership in UniGen Power • Valued at Level 3 fair value (development stage, no active market)

Rationale: diversify beyond cyclical hotels, tap fast-growing U.S. power market, position for IPO / strategic sale.

6.3 Merger / Reverse Merger

The Trust is open to a reverse merger with a private company seeking an NYSE-American listing; a way to inject scale & diversity.

7. Board, Governance & Executive Pay (Part III)

7.1 Board Composition & Committees

• 7 Trustees: Wirth (Chair/CEO, nonindependent), Berg (CFO-II, nonindependent), Kutasi, Robson, Chase, Marchi (independent)
• Audit (independent): Kutasi (Chair), Robson, Chase/Marchi
• Compensation (independent): Marchi (Chair), Robson, Kutasi
• Governance (independent): Berg, Kutasi (Chair), Robson

7.2 Executive Compensation Highlights (Item 11)

| Officer | Base Salary | Bonus & Incentives | Other | Total FY 2025 | | —————— | —————— | ————————————— | ———— | —————————| | James Wirth (CEO) | $153,060 (flat) | n/a | $3,075 | $126,652 | | Marc Berg (EVP) | $55,515 | n/a | $3,575 | $58,590 | | Sylvin Lange (CFO) | $107,735 | n/a | $4,540 | $112,275 |

Key takeaways:

• No pay increase for the CEO or EVP (founder-led / family stake)
• Cash GOP bonus pool for general managers; execs earn 25% of that pool
• Stock grants & trustee restricted shares for governance

8. Independent Audit & Fees (Item 14)

2025 audit fees: $188.5 K to BCRG Group 2025 tax fees: $2.0 K 2024 audit fees: $104.5 K to BF Borgers 2024 tax fees: $25.8 K

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9. Investment Score: 5.5 / 10

Upside:

• Record GOP, ADR growth, stable brands
• Strategic asset sale at substantial premium to book
• Clean energy diversification (15–20% stake in UniGen)
• Disciplined costs help margins

Downside:

• Net loss: $(1.39 M), negative FFO
• Limited cash cushion; heavy debt service
• Depreciation & interest drag
• Small scale; concentration risk in two properties
• UniGen is high-risk, unproven

Conclusion: IHT is a niche small-cap hotel investment with promising asset-sale upside and a high-risk clean energy play. We rate it a 5.5/10.

Disclaimer: This is a summary and analysis for informational purposes. It should not be construed as personalized investment advice. Always conduct your own research or consult a professional advisor.

— Berg Investment Advisors