Quarterly Report for Quarter Ending October 31, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

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.

FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-Q, including statements containing the phrases "believes," "intends," "expects," "anticipates," "predicts," "projects," "will be," "should be," "looking ahead," "may" or similar words, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend that such forward-looking statements be subject to the safe harbors created by such Acts. These forward-looking statements include statements regarding our intent, belief or current expectations in respect of (i) the declaration or payment of dividends; (ii) the leasing, management or operation of the Hotels; (iii) the adequacy of reserves for renovation and refurbishment; (iv) our financing plans; (v) our position regarding investments, acquisitions, developments, financings, conflicts of interest and other matters; (vi) expansion of UniGen; (vii) our plans and expectations regarding future sales of hotel properties; and (viii) trends affecting our or any Hotel's financial condition or results of operations.

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:

	●	Tariffs and their effect on the Travel Industry;
	●	potential risk and uncertainty of investments, including UniGen and IBC Hotels, LLC;
	●	inflation and potential economic recession;
	●	Pandemic, terrorist attacks, or other acts of war;
	●	political instability, and potentially reduced government travel;
	●	available cash, supply chain issues, and increased labor costs;
	●	fluctuations in hotel occupancy and rates;
	●	changes in room rental rates that may be charged by InnSuites in response to market changing demand and rental rate changes or otherwise;
	●	seasonality of our hotel operations business;
	●	collectability of receivables;
	●	our ability to sell any of our Hotels at market value, or at all;
	●	interest rate fluctuations;
	●	changes in, or reinterpretations of, governmental regulations, including, but not limited to, environmental, trade, and other regulations, the Americans with Disability Act, Covid-19 restrictions, ERTC, and federal, state, and local income tax laws and regulations;
	●	competition including supply and demand for hotel rooms and hotel properties;
	●	availability of credit or other financing;
	●	our ability to meet present and future debt service obligations;
	●	our ability to refinance or extend the maturity of indebtedness at, prior to, or after the time it matures;
	●	any changes in our financial condition or operating results due to acquisitions or dispositions of hotel or investment properties;
	●	insufficient resources to pursue our current strategy;
	●	concentration of our investments in the InnSuites ® , or another brand;
	●	loss of membership contracts;
	●	the financial condition of franchises, brand membership companies, travel-related companies, and receivables from travel related companies;
	●	ability to develop and maintain positive relations with current and potential future franchises or brands;
	●	real estate and hospitality market conditions;
	●	hospitality industry factors;
	●	our ability to carry out our strategy, including our strategy regarding diversification of investments;

	●	the Trust's ability to remain listed on the NYSE American;
	●	effectiveness and security of the Trust's software program;
	●	the need to periodically repair and renovate our Hotels at a cost at or in excess of our standard 4% reserve;
	●	tariffs and health travel restrictions may affect trade and travel;
	●	our ability to cost effectively integrate any acquisitions with the Trust in a timely manner;
	●	increases in the cost and availability of labor, energy, healthcare, insurance and other operating expenses as a result of inflation, or changed or increased regulation, or otherwise;
	●	presence of drugs or outbreaks of communicable diseases attributed to our hotels or impacting the hotel industry in general;
	●	natural disasters, including adverse climate changes in the areas where we have or serve hotels;
	●	airline strikes, and variations in airline travel demand;
	●	transportation and fuel price increases, and availability;
	●	adequacy of property and liability insurance coverage including liability coverage, and increases in cost for property, liability, and health care coverage for employees and potential government regulation with respect to health care coverage;
	●	data breaches or cybersecurity attacks, including breaches impacting the integrity and security of employee and guest data; and
	●	loss of key personnel and uncertainties in the interpretation and application of tax laws and other legislation.

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.

OVERVIEW

We are engaged in the ownership and operation of hotel properties. On October 31, 2025, the Trust had two moderate-service hotels, one in Tucson, Arizona and one in Albuquerque, New Mexico with 270 hotel suites. Both of our Trust Hotels are branded through membership agreements with Best Western, and both are also trademarked as InnSuites Hotels and Suites. We are also involved in various operations incidental to the operation of hotels, such as the operation of a limited service restaurant and bar, as well as meeting/banquet room rentals.

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.

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.

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.

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.

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.

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.

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.

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 additional 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.

HOTEL OPERATIONS

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.

The following tables show historical financial and other information for the periods indicated:

		For the Nine Months Ended
Albuquerque		October 31,
		2025				2024				Change				%-Incr/Decr
Occupancy			90.87	%			89.51	%			1.36	%			1.52	%
Average Daily Rate (ADR)		$	104.06			$	105.70			$	(1.64	)			-1.55	%
Revenue Per Available Room (REVPAR)		$	94.55			$	94.61			$	(0.06	)			-0.06	%

		For the Nine Months Ended
Tucson		October 31,
		2025				2024				Change				%-Incr/Decr
Occupancy			70.95	%			72.38	%			-1.43	%			-1.98	%
Average Daily Rate (ADR)		$	87.70			$	91.64			$	(3.94	)			-4.30	%
Revenue Per Available Room (REVPAR)		$	62.23			$	66.33			$	(4.10	)			-6.18	%

		For the Nine Months Ended
Combined		October 31,
		2025				2024				Change				%-Incr/Decr
Occupancy			79.21	%			79.47	%			-0.26	%			-0.33	%
Average Daily Rate (ADR)		$	95.49			$	98.19			$	(2.70	)			-2.75	%
Revenue Per Available Room (REVPAR)		$	75.64			$	78.03			$	(2.39	)			-3.06	%

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.

We enter transactions with certain related parties from time to time. For information relating to such related party transactions see the following:

	●	For a discussion of management and licensing agreements with certain related parties, see Note 2 to our Unaudited Condensed Consolidated Financial Statements - "Summary of Significant Policies - Revenue Recognition - Hotel Operations"
	●	For a discussion of guarantees of our mortgage notes payable by certain related parties, see Note 6 to our Unaudited Condensed Consolidated Financial Statements - "Mortgage Notes Payable."
	●	For a discussion of our equity sales and restructuring agreements involving certain related parties, see Note 3 to our Unaudited Condensed Consolidated Financial Statements - "Sale of Ownership Interests in Subsidiaries".
	●	For a discussion of other related party transactions, see Note 11 to our Unaudited Condensed Consolidated Financial Statements - "Related Party Transactions."

RESULTS OF OPERATIONS FOR THE FISCAL TWELVE MONTH TRAILING ENDED OCTOBER 31, 2025 COMPARED TO THE FISCAL TWELVE MONTH TRAILING ENDED OCTOBER 31, 2024.

A summary of total operating results of the Trust for the twelve month trailing periods ended October 31, 2025 and 2024 is as follows:

		FY 2025/2026				FY 2024/2025				Change				% Change
Total Revenues		$	7,443,699			$	7,692,305			$	(248,606	)			(3	%)
Operating Expenses			8,130,433				8,537,171				(406,738	)			(5	%)
Operating Loss			(686,734	)			(844,866	)			158,132				19	%
Interest Income and Other			3,719				64,717				(60,998	)			(94	%)
Interest Expense			(553,226	)			(462,005	)			(91,221	)			(20	%)
BW Rewards Credit			(312,412	)			-				(312,412	)			na
Employee Retention Benefit			-				350,791				(350,791	)			(100	%)
Income Tax Benefit			(215	)			100				(315	)			(315	%)
Consolidated Net Loss			(1,548,868	)			(891,263	)			(657,605	)			(74	%)

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED OCTOBER 31, 2025 COMPARED TO THE NINE MONTHS ENDED OCTOBER 31, 2024

A summary of total operating results of the Trust for the nine months ended October 31, 2025 and 2024 is as follows:

		For the Nine Months Ended October 31,
		2025				2024				Change				% Change
Total Revenues		$	5,809,673			$	5,959,490			$	(149,817	)			(3	%)
Operating Expenses			6,007,374				6,213,199				(205,825	)			(3	%)
Operating Loss			(197,701	)			(253,709	)			56,008				22	%
Interest Income and Other			2,250				34,800				(32,550	)			(94	%)
Interest Expense			(415,017	)			(337,837	)			(77,180	)			(23	%)
BW Rewards Credit			(103,654	)			-				(103,654	)			na
Income Tax Benefits			140				-				140				na
Consolidated Net Loss			(713,982	)			(556,746	)			(157,236	)			28	%

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.

The Trust has chosen to focus its hotel investments on the southwest region of the United States. The Trust does not review assets by geographical region; therefore, no income statement or balance sheet information by geographical region is provided.

REVENUE:

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.

Total Consolidated Net Loss for the nine months ended October 31, 2025 was approximately $714,000, compared to Consolidated Net Loss of approximately $557,000 for the nine months ended October 31, 2024, a decrease of approximately $157,000. Loss Per Share based on this Consolidated Net Loss amount was ($0.08), down $0.02 from the prior year Loss Per Share of $0.06, which is a decrease of 29%. Loss Per Share based on net loss attributable to Controlling Interest was $0.10, down from the prior year net loss per share of $0.09.

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.

We realized a 3% decrease in room revenues during the nine months ended October 31, 2025, as room revenues were approximately $5.58 million for the nine months ending October 31, 2025 as compared to approximately $5.76 million for the nine months ending October 31, 2024. During the balance of Fiscal Year 2025, we expect stable hotel occupancy, and modest improvements in hotel rates.

EXPENSES:

Total expenses net of interest expense was approximately $6.01 million for the nine months ended October 31, 2025, reflecting a decrease of approximately $0.21 million, or 3%, compared to total expenses net of interest expense of approximately $6.21 million for the nine months ended October 31, 2024. The decrease was primarily due to an decrease in operating expenses related to general and administrative expenses.

Room expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation fees and room supplies were approximately $1.93 million for the nine months ended October 31, 2025, flat compared to approximately $1.93 million in the prior year nine month period.

Food and beverage expenses included food and beverage costs, personnel, and miscellaneous costs to provide banquet events. For the nine months ended October 31, 2025, food and beverage expenses increased approximately $10,000, or 14%, to approximately $81,000 for the nine months ended October 31, 2025, compared to approximately $71,000 for the nine months ended October 31, 2024. The increase in cost is due to the increase in food and beverage revenue.

General and administrative expenses include overhead charges for management, accounting, shareholder and legal services. General and administrative expenses of approximately $1.52 million for the nine months ended October 31, 2025, decreased approximately $138,000 from approximately $1.66 million for the nine months ended October 31, 2024, primarily due to less charges in corporate staffing in support of the hotels and property sales efforts.

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.

Repairs and maintenance expense increased from approximately $313,000 reported for the nine months ended October 31, 2024, compared to approximately $329,000 for the nine 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.

Hospitality expense, including complimentary breakfast, increased by approximately $5,000, or 1%, from $450,000 for the nine months ended October 31, 2024, to approximately $455,000 for the nine months ended October 31, 2025. We continue to improve the guest breakfast experience which is our most popular "InnSuites Extra".

Utility expenses decreased from approximately $312,000 for the nine months ended October 31, 2024, compared to approximately $300,000 for the nine months ended October 31, 2025, primarily driven by the decrease in room occupancy.

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.

Real estate and personal property taxes, Insurance and Ground Rent expenses decreased approximately $112,000, or 19%, to approximately $463,000 reported for the nine months ended October 31, 2025 compared with approximately $575,000 for the nine months ended October 31, 2024 due to adjustments in our operating lease accounts.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 2025, COMPARED TO THE THREE MONTHS ENDED OCTOBER 31, 2024

A summary of total operating results of the Trust for the three months ended October 31, 2025 and 2024 is as follows:

		For the Three Months Ended October 31,
		2025				2024				Change				% Change
Total Revenues		$	1,805,038			$	1,825,128			$	(20,090	)			(1	)%
Operating Expenses			1,986,435				1,955,450				(30,985	)			(2	)%
Operating Loss			(181,397	)			(130,322	)			(51,075	)			(39	)%
Interest Income and Other			750				4,821				(4,071	)			(84	)%
Interest Expense			(133,950	)			(91,981	)			(41,969	)			(46	)%
BW Rewards Credit			(37,296	)			-				(37,296	)			na
Income Tax Benefits			(100	)			-				(100	)			na
Consolidated Net Loss			(351,993	)			(217,482	)			(134,511	)			(62	)%

REVENUE:

For the three months ended October 31, 2025, we had total revenue of approximately $1.81 million, which is relatively flat compared to approximately $1.82 million for the three months ended October 31, 2024. 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, 2025, we had an increase in total revenue benefitting from prior refurbishments, and increased internet marketing.

Total Consolidated Net Loss for the three months ended October 31, 2025 was approximately $352,000, compared to Consolidated Net Loss of approximately $217,000 for the three months ended October 31, 2024, a decrease of approximately $135,000. Earnings Per Share based on this Consolidated Net Loss were down $0.04 compared to the prior year similar three month period of $0.02. Earnings Per Share based on Net loss attributable to Controlling Interest was $0.04, down $0.01 compared to the prior year similar three month period of $0.03.

Net Loss before non-cash depreciation expense was approximately $160,000 for the three months ended October 31, 2025, compared to Net Loss before non-cash depreciation expense of approximately $43,000 for the three months ended October 31, 2024, which is a decrease of approximately $118,000.

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.

EXPENSES:

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.

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.

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.

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.

Sales and marketing expense remained relatively flat at approximately $101,000 for the three months ended October 31, 2025 from approximately $99,000 for the three months ended October 31, 2024.

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.

Hospitality expense increased by approximately $5,000, or 4%, from $142,000 for the three months ended October 31, 2024 to approximately $147,000 for the three months ended October 31, 2025. The increase in hospitality expense is due to an increase in minimum wages attributable to salary and wages for Hospitality.

Utility expenses increased by approximately $10,000, or 10%, from approximately $104,000 reported for the three months ended October 31, 2024 to approximately $114,000 for the three months ended October 31, 2025.

Hotel property depreciation expenses increased by approximately $17,000 from approximately $175,000 reported for the three months ended October 31, 2024 compared to approximately $192,000 for the three months ended October 31, 2025. Increased depreciation resulted from an increase in depreciation for additional capital expenditures.

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.

LIQUIDITY AND CAPITAL RESOURCES

Overview - Hotel Operations & Corporate Overhead

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Treasury Stock repurchases of IHT stock for cash was approximately $0 and $45,000 of cash used in financing activities during the nine months ended October 31, 2025 and 2024, respectively.

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.

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.

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.

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.

COMPETITION IN THE HOTEL INDUSTRY

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). Fiscal 2026 is down slightly. Continued competition in corporate, leisure, group, and government business in the markets in which we operate, may affect our ability to maintain room rates, occupancy, and 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.

Hotel property refurbishments have been completed by InnSuites and 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.

The Trust's hotel investments are located in Arizona and New Mexico. With the completed renovations meeting or exceeding Best Western standards at our Tucson, Arizona and Albuquerque, New Mexico hotel properties, those hotels are expected to see incremental demand. 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. Room revenue was stable or down slightly, at our hotels in the First Fiscal Three Quarters of 2026, (February 1, 2025 to October 31, 2025). This is expected to continue for the balance of Fiscal Year 2026, through January 31, 2026.

The Trust may not invest further in hotels, but rather diversify into investments such as the investment made by the Trust in December 2019 in the innovative UniGen Power, Inc. (UniGen), efficient clean energy power generation company; or the March 7, 2025 opportunity to manage and potentially eventually purchase IBC Hotels, LLC, at cost, offering independent hotel reservation systems and services. The Trust may continue to seek further diversification through a merger or reverse merger with a larger non-public entity seeking an NYSE-American public stock market listing.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

As a partial balance to the current hotel industry, the Trust looks to benefit from, and expand, its UniGen clean energy operation diversification investments in the years ahead, and its diversification with IBC. See Note 2 of the unaudited consolidated financial statements for discussions on UniGen and IBC.

In our Annual Report on Form 10-K for the Fiscal Year ended January 31, 2025, filed with the SEC on April 30, 2025, we identified the critical accounting policies that affect our more significant estimates and assumptions used in preparing our condensed consolidated financial statements. We believe that the policies we follow for the valuation of our Hotel properties, which constitute a major part of our assets, are our most critical policies which has not changed in the period ended July 31, 2025. Those policies include methods used to recognize and measure any identified impairment of our Hotel property assets.

Asset Impairment

We believe that the policies we follow for the valuation of our hotel properties, which constitute most of our assets, are our most critical policies. The Financial Accounting Standards Board ("FASB") has issued authoritative guidance related to the impairment or disposal of long-lived assets, codified in ASC Topic 360-10-35, which we apply to determine when it is necessary to test an asset for recoverability. On an events and circumstances basis, we review the carrying value of our hotel properties. We will record an impairment loss and reduce the carrying value of a property when anticipated undiscounted future cash flows and the current market value of the property do not support it carrying value. In cases where we do not expect to recover the carrying cost of hotel properties held for use, we will reduce the carrying value to the fair value of the hotel, as determined by a current appraisal or other acceptable valuation methods. As of October 31, 2025, our management does not believe that the carrying values of any of our hotel properties are impaired.

Sale of Hotel Assets

Management believes that our currently owned Hotels are valued at prices that are reasonable in relation to their current fair market value. In each case, we believe current market value of each hotel is significantly higher than the depreciated book value. At this time, the Trust is unable to predict when, and if, either of its Hotel properties will be sold. The Trust seeks to sell both hotels over the next 36 months. We believe that each of the assets is available at a price that is reasonable in relation to its current fair market value.

Revenue Recognition

Revenues are primarily derived from the sources below and are recognized as services are rendered and when collectability is reasonably assured. Amounts received in advance of revenue recognition are considered deferred liabilities and are generally not significant.

Revenues primarily consist of room rentals, food and beverage sales, management fees, and other miscellaneous revenues from our properties. Revenues are recorded when rooms are occupied and when food and beverage sales are delivered.

Each room night consumed by a guest with a cancelable reservation represents a contract whereby the Trust has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Trust recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with a non-cancellable reservation, the entire reservation period represents the contract term whereby the Trust has a performance obligation to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Trust recognizes revenue over the term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically fixed over the reservation period. The Trust uses an output method based on performance completed to date (i.e., room nights consumed) to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.

In evaluating its performance obligation, the Trust bundles the obligation to provide the guest the room itself with other obligations (such as free Wi-Fi, breakfast, access to on-site exercise facilities and parking), as the other obligations are not distinct and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Trust's obligation to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents). The Trust has no performance obligations once a guest's stay is complete.

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

COMPLIANCE WITH CONTINUED LISTING STANDARDS OF NYSE AMERICAN

The Trust's Management received communication from the NYSE-American on August 29, 2022, indicating IHT is fully compliant with all of the Continued Listing Standards Equity Requirements set forth in Part 10 of the NYSE American Company Guide, of the NYSE-American.

NON-GAAP FINANCIAL MEASURES

The following non-GAAP presentations of earnings before interest, taxes, depreciation, and amortization ("EBITDA") and funds from operations ("FFO") are made to assist our investors in evaluating our operating performance.

Adjusted EBITDA is defined as earnings before interest expense, amortization of loan costs, interest income, income taxes, depreciation and amortization, and non-controlling interests in the Trust. We present Adjusted EBITDA because we believe these measurements (a) more accurately reflect the ongoing performance of our hotel real estate assets and other investments, (b) provide more useful information to investors as indicators of our ability to meet our future debt payments and working capital requirements, and (c) provide an overall evaluation of our financial condition. Adjusted EBITDA as calculated by us may not be comparable to Adjusted EBITDA reported by other companies that do not define Adjusted EBITDA exactly as we define the term. Adjusted EBITDA does not represent cash generated from operating activities determined in accordance with GAAP and should not be considered as an alternative to (a) GAAP net income or loss as an indication of our financial performance or (b) GAAP cash flows from operating activities as a measure of our liquidity.

A reconciliation of net income or loss attributable to controlling interests to Adjusted EBITDA for the nine and three months ended October 31, 2025 and 2023 is approximately as follows:

		For the Nine Months Ended October 31,
		2025				2024
Net loss income attributable to controlling interests		$	(869,000	)		$	(812,000	)
Add back:
Depreciation			562,000				521,000
Interest expense			415,000				338,000
Less:
Interest Income			-				(35,000	)
Adjusted EBITDA		$	108,000			$	12,000

		For the Three Months Ended October 31,
		2025				2024
Net loss attributable to controlling interests		$	(357,000	)		$	(276,000	)
Add back:
Depreciation			192,000				175,000
Interest expense			134,000				92,000
Less:
Interest Income			-				(5,000	)
Adjusted EBITDA		$	(31,000	)		$	(14,000	)

FFO is calculated on the basis defined by the National Association of Real Estate Investment Trusts ("NAREIT"), which is net income (loss) attributable to common shareholders, computed in accordance with GAAP, excluding gains or losses on sales of properties, asset impairment adjustments, and extraordinary items as defined by GAAP, plus non-cash depreciation and amortization of real estate assets, and after adjustments for unconsolidated joint ventures and non-controlling interests in the operating partnership. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. The Trust is an unincorporated Ohio business investment, (real estate investment trust); however, the Trust is not a real estate investment trust for federal taxation purposes. Management uses this measurement to compare itself to REITs with similar depreciable assets. We consider FFO to be an appropriate measure of our ongoing normalized operating performance. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other companies that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO does not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to (a) GAAP net income or loss as an indication of our financial performance or (b) GAAP cash flows from operating activities as a measure of our liquidity, nor is it indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO should be considered along with our net income or loss and cash flows reported in the consolidated financial statements.

An approximate reconciliation of net income (loss) attributable to controlling interests to FFO for the nine and three months ended October 31, 2025 and 2023:

		For the Nine Months Ended October 31,
		2025				2024
Net loss attributable to controlling interests		$	(869,000	)		$	(812,000	)
Add back:
Depreciation			562,000				521,000
Non-controlling interest			155,000				255,000
FFO		$	(152,000	)		$	(36,000	)

		For the Three Months Ended October 31,
		2025				2024
Net loss attributable to controlling interests		$	(357,000	)		$	(276,000	)
Add back:
Depreciation			562,000				521,000
Non-controlling interest			5,000				59,000
FFO		$	210,000			$	304,000

FUTURE POSITIONING

In viewing economic cycles and hotel industry cycles, the Board of Trustees determined that it was appropriate to continue to seek buyers for our two remaining Hotel properties. We continue to make our Tucson Hotel and Albuquerque Hotel available for sale at market value, on the website www.suitehotelsrealty.com.

The table below provides book values, mortgage balances and Estimated Market Asking Price for the Hotels.

Hotel Property		Book Value				Mortgage Balance				Estimated Market Asking Price
Albuquerque		$	873,417			$	1,125,368				9,500,000
Tucson Oracle			5,894,639				7,717,067				18,500,000
		$	6,768,056			$	8,842,435			$	28,000,000

The "Estimated Market Asking Price" is the amount at which we believe we may be able to sell each of the Hotels and is adjusted to reflect hotel sales in the Hotels' areas of operation and projected upcoming 12-month earnings of each of the Hotels. The Estimated Market Asking Price is not based on appraisals of the properties.

We have from time to time listed hotel properties with a long time highly successful local real estate hotel broker who has successfully sold four of our hotel properties. We believe that each of the assets, the Tucson and Albuquerque hotels, have an estimated market asking price that is reasonable in relation to its current fair market value. We plan to sell our remaining two Hotel properties within 36 months. We can provide no assurance that we will be able to sell either or both of the Hotel properties on terms favorable to us or within our expected time frame, or at all.

Although believed feasible, we may be unable to realize the asking price for the individual Hotel properties or to sell and/or refinance one or both. However, we believe that the asking price values are reasonable based on current local hotel market conditions, comparable sales, and anticipated continued trends in occupancy, rates, and profits per hotel. Changes in market conditions have in part resulted, and may in the future result, in our changing one or all of the asking prices.

Our long-term strategic plan is to obtain the full benefit of our real estate equity, to benefit from our UniGen Power, Inc., (UniGen) clean energy operation diversified investment, to re-invigorate and benefit from IBC Hotels, and to pursue a merger with another company, likely a private larger entity that seeks to go public by reverse merger, to list on the NYSE AMERICAN Exchange.

SHARE REPURCHASE PROGRAM

For information on the Trust's Share Repurchase Program, see Part II, Item 5. "Market for the Registrant's Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities." of our most recent 10-K Annual Report filed on April 30, 2025.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet financing arrangements or liabilities. We do not have any majority-owned or controlled subsidiaries that are not included in our consolidated financial statements.

SEASONALITY

The Hotels' operations historically have been somewhat seasonal. The Tucson Arizona Hotel historically experiences the highest occupancy in the first Fiscal Quarter (the winter high season) and, to a lesser extent, the fourth Fiscal Quarter. The second Fiscal Quarter (summer low season) historically tends to be the lowest occupancy period at this Arizona Hotel. This seasonality pattern can be expected to cause fluctuations in the Trust's quarterly revenues. The Hotel located in Albuquerque, New Mexico historically experiences its most profitable periods during the second and third Fiscal Quarters (the summer high season), providing some balance to the general seasonality of the Trust's hotel business.

The seasonal nature of the Trust's business increases its vulnerability to risks such as travel disruptions, labor force shortages and cash flow issues. Further, if an adverse event such as an actual or threatened virus pandemic, terrorist attack, international conflict, data breach, regional economic downturn or poor weather should occur at either of its two hotels, the adverse impact to the Trust's revenues and profit could be significant.

INFLATION

We rely on the performance of the Hotels and InnSuites ability to increase revenue to keep pace with inflation. Operators of hotels in general, based on supply and demand, and InnSuites in particular, can change and do change room rates often and quickly, but going forward, competitive pressures may limit InnSuites ability to raise rates as fast as or faster than inflation. During Fiscal Year 2025, ended January 31, 2025, InnSuites did generally experience increases in rates to offset the inflationary increase in labor and other expenses. During the current Fiscal 2026, inflation rates have been moderately stable.

INVESTMENT IN UNIGEN POWER, INC.

On December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. ("UniGen"). InnSuites Hospitality Trust (IHT) made an initial $1 million diversification investment in late Fiscal Year 2020 and early Fiscal Year 2021. UniGen is in the process of developing a patented high profit potential new efficient clean energy generation innovation. The initial investment was made December 16, 2019, with positive progress to date despite the virus, setbacks, international vendor travel disruptions, cost overruns, and delays. The investment includes convertible bonds, stocks, and warrants to purchase UniGen stock upon election of the Trust. The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is no Investment Commitment to UniGen requiring any restriction of cash.

The market for the innovative UniGen product in development is strong. The total market demand for electricity is projected to double in the U.S. over the next five years due to sharply increased demand from data centers, electric vehicles, and projected Artificial Intelligence usage.

The Trust purchased secured convertible debentures ("Debentures") in the aggregate amount of $1,000,000 (the "Loan Amount") (the "Loan") at an annual interest rate of 6% ($15,000 per quarter). The Debentures are convertible into 1,000,000 Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share. UniGen is delinquent on principal and on quarterly interest payments, and is currently seeking additional investors, including potential future investment by IHT.

The Trust has purchased in addition approximately 575,000 shares of UniGen stock.

UniGen issued the Trust common stock purchase warrants (the "Debenture Warrants") including to purchase up to 1,000,000 shares of Class A Common Stock. The Debenture Warrants, if the expiration dates are extended as part of the current capital raising, are exercisable at an exercise price of $1.00 per share of Class A Common Stock.

UniGen, also, issued the Trust additional common stock purchase warrants ("Additional Warrants") to purchase up to 500,000 shares of Class A Common Stock. The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.

The total of all stock ownership upon conversion of the debenture and exercise of warrants could amount to up to approximately 15-20% of fully diluted UniGen equity.

On the Trust's balance sheet, the investment of approximately $1,707,000 consists of approximately $700,000 in note receivables, approximately $300,000 as the fair value of the warrants issued with the Trust's investment in UniGen, and $668,750 of UniGen Common Stock (575,000 shares), at cost. The value of the premium related to the fair value of the warrant accretes over the life of the debentures.

Privately held UniGen Power, Inc. (UniGen) is developing a patented high profit potential (high risk), new efficient clean energy generation innovation. The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is no Investment Commitment to UniGen requiring any restriction of cash.

Engineering work is 61% complete, according to UniGen, on the prototype. UniGen is currently concentrating on its current round of capital raising. IHT may participate in an upcoming round of capital raising.

UniGen is a high risk investment offering high potential investment return if and when successful.

Based on a 96 core "super computer" simulated test together with advanced software, UniGen has confirmed that the UPI 1000TA engine with the addition of recent technological advancements, is approximately 33% more fuel efficient than first estimated and will emit only approximately 25% of the maximum admissions allowed by CARB, the strictest of the regulatory standards issued by the state of California. Recent projections of demand for electricity including data centers, electric vehicles and artificial intelligence indicates the market demand for electricity over the next five years in the U.S. may double.

The UniGen design is to produce generators fueled not only with abundant relatively clean natural gas but also with other even cleaner fuels such as ethanol and hydrogen (that emits only water).

James Wirth (IHT President) and Marc Berg (IHT Executive Vice President) both lack significant UniGen control. They have two of the five UniGen Board of Directors seats or 40% and were elected in December 2019 to serve on the board of UniGen to monitor and assist in the success of this potentially power industry disruptive relatively clean energy generation innovation.

The Trust has valued UniGen investment as a level 3 fair value measurement, for the following reasons: The investment does not qualify for level 1 since there are no identical actively traded instruments or level 2 identical or similar unobservable markets.