Attached files
| file | filename |
|---|---|
| 8-K - INNSUITES HOSPITALITY TRUST | form8-k.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As disclosed in our Form 8-K filed with the SEC on July 8, 2015, on July 1, 2015, Tucson Saint Mary’s Suite Hospitality LLC, a subsidiary of InnSuites Hospitality Trust (the “Trust”), entered into a Real Estate Purchase Agreement (“Sale Agreement”) to sell its Hotel Tucson City Center InnSuites property to Lee & J Hospitality, Inc, (“Buyer”) an unrelated third party to the Trust for $9.65 million in cash. Right, title and interest to the Hotel Tucson City Center InnSuites hotel property (“Hotel”) was transferred on October 14, 2015. The transfer of these assets constituted the disposition of a significant amount of assets of the Trust.
The following unaudited condensed consolidated financial statements are presented to illustrate the effects of the Sale Transaction. The unaudited pro forma condensed consolidated balance sheet as of July 31, 2015 illustrates the estimated effects of the Sale Transaction as if the sale had occurred on July 31, 2015 and as if all income from the sale had been earned as of that date. The unaudited pro forma condensed consolidated income statement for the six months ended July 31, 2015 and the year ended January 31, 2015 sets forth the estimated effects of the Sale Transaction on the Trust’s condensed consolidated statements of income as if the sale had occurred in its entirety at the beginning of each those periods.
The unaudited pro forma condensed consolidated financial statements presented herein are for informational purposes only and do not purport to present what the Trust’s actual results would have been had the Sale Transaction occurred on the date assumed, or to project our results of operations or financial position for any future period. The pro forma financial statements include assumptions that are believed to be reasonable and represent all material information that is necessary to fairly present pro forma financial statements.
The unaudited pro forma condensed consolidated financial statement, including the notes thereto, should be read in conjunction with Trust’s audited consolidated financial statements and the notes in the Trust’s Annual Report on Form 10-K as for the fiscal year ended January 31, 2015, as filed with the SEC on April 30, 2015.
INNSUITES HOSPITALITY TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
| HISTORICAL | PROPERTY SOLD PRO FORMA | PRO FORMA | ||||||||||||||
| JULY 31, 2015 | ADJUSTMENT | NOTES | JULY 31, 2015 | |||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets: | ||||||||||||||||
| Cash and Cash Equivalents | $ | 300,950 | $ | - | $ | 300,950 | ||||||||||
| Accounts Receivable | 312,024 | - | 312,024 | |||||||||||||
| Advances to Affiliates - Related Party | - | - | - | |||||||||||||
| Prepaid Expenses and Other Current Assets | 160,294 | - | 160,294 | |||||||||||||
| Total Current Assets | 773,268 | - | 773,268 | |||||||||||||
| Hotel Properties, net | 25,680,396 | (7,283,041 | ) | (a) | 18,397,355 | |||||||||||
| Property, Plant and Equipment, net | 142,303 | - | 142,303 | |||||||||||||
| TOTAL ASSETS | $ | 26,595,967 | $ | (7,283,041 | ) | $ | 19,312,926 | |||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||
| LIABILITIES | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts Payable and Accrued Expenses | $ | 2,338,480 | $ | (451,576 | ) | (a) | $ | 1,886,904 | ||||||||
| Current Portion of Mortgage Notes Payable | 5,190,898 | (4,745,649 | ) | (a) | 445,249 | |||||||||||
| Current Portion of Notes Payable to Banks | 692,530 | - | 692,530 | |||||||||||||
| Line of Credit - Related Party | 108,270 | - | 108,270 | |||||||||||||
| Current Portion of Other Notes Payable | 217,209 | - | 217,209 | |||||||||||||
| Total Current Liabilities | 8,547,387 | (5,197,225 | ) | 3,350,162 | ||||||||||||
| Mortgage Notes Payable | 13,578,243 | - | 13,578,243 | |||||||||||||
| Other Notes Payable | 21,448 | - | 21,448 | |||||||||||||
| TOTAL LIABILITIES | 22,147,078 | (5,197,225 | ) | 16,949,853 | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||
| Shares of Beneficial Interest, without par value, unlimited authorization | 14,827,601 | (1,420,232 | ) | (b) | 13,407,369 | |||||||||||
| Treasury Stock | (12,252,277 | ) | - | (12,252,277 | ) | |||||||||||
| TOTAL TRUST SHAREHOLDERS’ EQUITY | 2,575,324 | (1,420,232 | ) | 1,155,092 | ||||||||||||
| NON-CONTROLLING INTEREST | 1,873,565 | (665,584 | ) | (b) | 1,207,981 | |||||||||||
| TOTAL EQUITY | 4,448,889 | (2,085,816 | ) | (b) | 2,363,073 | |||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 26,595,967 | $ | (7,283,041 | ) | $ | 19,312,926 | |||||||||
INNSUITES HOSPITALITY TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| PROPERTY SOLD | ||||||||||||||
| HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||||
| JANUARY 31, 2015 | ADJUSTMENT | NOTES | JANUARY 31, 2015 | |||||||||||
| REVENUE | ||||||||||||||
| Room | $ | 13,186,396 | $ | (2,972,731 | ) | $ | 10,213,665 | |||||||
| Food and Beverage | 954,432 | (792,368 | ) | (c) | 162,064 | |||||||||
| Management and Trademark Fees | 278,210 | - | 278,210 | |||||||||||
| Other | 253,834 | (67,989 | ) | (c) | 185,845 | |||||||||
| TOTAL REVENUE | 14,672,872 | (3,833,088 | ) | 10,839,784 | ||||||||||
| OPERATING EXPENSES | ||||||||||||||
| Room | 3,957,611 | (926,322 | ) | (c) | 3,031,289 | |||||||||
| Food and Beverage | 903,848 | (627,794 | ) | (c) | 276,054 | |||||||||
| Telecommunications | 30,420 | (2,469 | ) | (c) | 27,951 | |||||||||
| General and Administrative | 3,450,220 | (400,877 | ) | (c) | 3,049,343 | |||||||||
| Sales and Marketing | 1,316,857 | (157,489 | ) | (c) | 1,159,368 | |||||||||
| Repairs and Maintenance | 1,243,273 | (333,167 | ) | (c) | 910,106 | |||||||||
| Hospitality | 870,065 | (190,608 | ) | (c) | 679,457 | |||||||||
| Utilities | 1,314,514 | (547,580 | ) | (c) | 766,934 | |||||||||
| Hotel Property Depreciation | 1,782,421 | (461,856 | ) | (c) | 1,320,565 | |||||||||
| Real Estate and Personal Property Taxes, Insurance and Ground Rent | 943,914 | (124,695 | ) | (c) | 819,219 | |||||||||
| Other | 31,104 | (442 | ) | (c) | 30,662 | |||||||||
| TOTAL OPERATING EXPENSES | 15,844,247 | (3,773,299 | ) | 12,070,948 | ||||||||||
| OPERATING LOSS | (1,171,375 | ) | (59,789 | ) | (1,231,164 | ) | ||||||||
| Interest Income | 197 | - | 197 | |||||||||||
| Interest Income on Advances to Affiliates - Related Party | 8,971 | - | 8,971 | |||||||||||
| TOTAL OTHER INCOME | 9,168 | - | 9,168 | |||||||||||
| Interest on Mortgage Notes Payable | 705,198 | (182,199 | ) | 522,999 | ||||||||||
| Interest on Notes Payable to Banks | 101,924 | - | 101,924 | |||||||||||
| Interest on Other Notes Payable | 29,486 | (729 | ) | (c) | 28,757 | |||||||||
| Interest on Line of Credit - Related Party | 43,461 | - | 43,461 | |||||||||||
| TOTAL INTEREST EXPENSE | 880,069 | (182,928 | ) | 697,141 | ||||||||||
| CONSOLIDATED NET LOSS BEFORE INCOME TAX PROVISION | (2,042,276 | ) | 123,139 | (1,919,137 | ) | |||||||||
| Income Tax Provision | (198,648 | ) | - | (198,648 | ) | |||||||||
| CONSOLIDATED NET LOSS | $ | (2,240,924 | ) | $ | 123,139 | $ | (2,117,785 | ) | ||||||
| LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | $ | (137,287 | ) | $ | - | $ | (137,287 | ) | ||||||
| NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS | $ | (2,103,637 | ) | $ | 123,139 | $ | (1,980,498 | ) | ||||||
| NET LOSS PER SHARE – BASIC AND DILUTED | $ | (0.25 | ) | $ | - | $ | (0.25 | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 8,313,093 | - | 8,313,093 | |||||||||||
| CASH DIVIDENDS PER SHARE | $ | 0.01 | $ | - | $ | 0.01 | ||||||||
INNSUITES HOSPITALITY TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| PROPERTY SOLD | ||||||||||||||
| HISTORICAL | PRO FORMA | PRO FORMA | ||||||||||||
| JULY 31, 2015 | ADJUSTMENT | NOTES | JULY 31, 2015 | |||||||||||
| REVENUE | ||||||||||||||
| Room | $ | 7,561,396 | $ | (1,757,135 | ) | $ | 5,804,261 | |||||||
| Food and Beverage | 626,600 | (536,620 | ) | (c) | 89,980 | |||||||||
| Management and Trademark Fees | 128,144 | - | 128,144 | |||||||||||
| Other | 225,879 | (17,822 | ) | (c) | 208,057 | |||||||||
| TOTAL REVENUE | 8,542,019 | (2,311,577 | ) | 6,230,442 | ||||||||||
| OPERATING EXPENSES | ||||||||||||||
| Room | 2,269,162 | (542,685 | ) | (c) | 1,726,477 | |||||||||
| Food and Beverage | 557,413 | (412,462 | ) | (c) | 144,951 | |||||||||
| Telecommunications | 13,199 | (1,867 | ) | (c) | 11,332 | |||||||||
| General and Administrative | 1,847,716 | (186,977 | ) | (c) | 1,660,739 | |||||||||
| Sales and Marketing | 660,419 | (112,073 | ) | (c) | 548,346 | |||||||||
| Repairs and Maintenance | 706,696 | (173,491 | ) | (c) | 533,205 | |||||||||
| Hospitality | 508,900 | (146,333 | ) | (c) | 362,567 | |||||||||
| Utilities | 645,877 | (274,427 | ) | (c) | 371,450 | |||||||||
| Hotel Property Depreciation | 913,751 | (232,661 | ) | (c) | 681,090 | |||||||||
| Real Estate and Personal Property Taxes, Insurance and Ground Rent | 381,721 | (64,620 | ) | (c) | 317,101 | |||||||||
| Other | 13,830 | (1,332 | ) | (c) | 12,498 | |||||||||
| TOTAL OPERATING EXPENSES | 8,518,684 | (2,148,928 | ) | 6,369,756 | ||||||||||
| OPERATING INCOME (LOSS) | 23,335 | (162,649 | ) | (139,314 | ) | |||||||||
| Interest Income | 7 | - | 7 | |||||||||||
| Interest Income on Advances to Affiliates - Related Party | - | - | - | |||||||||||
| TOTAL OTHER INCOME | 7 | - | 7 | |||||||||||
| Interest on Mortgage Notes Payable | 422,376 | (91,082 | ) | (c) | 331,294 | |||||||||
| Interest on Notes Payable to Banks | 88,361 | (15,038 | ) | (c) | 73,323 | |||||||||
| Interest on Other Notes Payable | 3,852 | - | 3,852 | |||||||||||
| Interest on Line of Credit - Related Party | 8,090 | - | 8,090 | |||||||||||
| TOTAL INTEREST EXPENSE | 522,679 | (106,120 | ) | 416,559 | ||||||||||
| CONSOLIDATED NET LOSS BEFORE INCOME TAX PROVISION | (499,337 | ) | (56,529 | ) | (555,866 | ) | ||||||||
| Income Tax Provision | (71,571 | ) | - | (71,571 | ) | |||||||||
| CONSOLIDATED NET LOSS | $ | (570,908 | ) | $ | (56,529 | ) | $ | (627,437 | ) | |||||
| LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | $ | (16,540 | ) | $ | (5,461 | ) | $ | (22,001 | ) | |||||
| NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS | $ | (554,368 | ) | $ | (51,068 | ) | $ | (605,436 | ) | |||||
| NET LOSS PER SHARE – BASIC AND DILUTED | $ | (0.07 | ) | $ | - | $ | (0.07 | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 8,274,317 | - | 8,274,317 | |||||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
| 1. | NOTES TO UNAUDITED PRO FORMA ADJUSTMENT |
| (a) | The pro forma adjustment to Hotel Properties, net, Accounts Payable and Accrued Expenses and Current Portion of Mortgage Notes Payable that was on our balance sheet as of July 31, 2015 related to the removal of the net assets and liabilities of the Hotel. |
| (b) | The pro forma adjustment to Shares of Beneficial Interest and Non-Controlling Interest that was on the balance sheet as of July 31, 2015 related to the removal of the Shareholders Equity of the Hotel. |
| (c) | Revenues and Expenses have been adjusted on the pro forma income statements for the year ending January 31, 2015 and for the six months ending July 31, 2105 to remove the revenues and expenses associated with the Hotel. |