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Discontinued Operations | 3 Months Ended
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Apr. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 18. DISCONTINUED OPERATIONS Sale of IBC Hospitality Technologies; IBC Hotels LLC (IBC) Discontinued operations for the three months ended April 30, 2018 consist of the operations from the IBC Technology Segment (IBC Hotels LLC). On August 15, 2018 Innsuites Hospitality Trust (IHT) entered into a final sale agreement for its subsidiary IBC Hotels LLC (IBC) with an effective sale date as of August 1, 2018 to an unrelated third party buyer (Buyer). The buyer hired IHT’s former Chief Operating Officer, who is a family member of IHT’s CEO. The sale price was $3,000,000, to be paid to IHT as follows:
| 1. | $250,000 at closing, which was received on August 14, 2018;
| 2. | A secured promissory note in the principal amount of $2,750,000 with interest to be accrued at 3.75% per annum, recorded in the accompanying condensed balance sheet in continuing operations. Interest shall accrue for the first 10 months (starting August 2018), thereafter for month 11 and 12 principal and interest payments of 50% ($25,632 per month), then the remaining amount to be amortized over 59 months (payments of $52,054 per month) with maturity in June 2024. Future payments on this note are shown in the table below.
FISCAL YEAR |  |  |
2020 |  | $ | 229,167 |
2021 |  |  | 550,000 |
2022 |  |  | 550,000 |
2023 |  |  | 550,000 |
2024 |  |  | 550,000 |
Thereafter |  |  | 320,833 |
|  | $ | 2,750,000 |
Note is secured by (1) pledge of the Buyer’s interest in IBC, and (2) a security interest in all assets of IBC provided IHT shall agree to subordinate such equity interest to commercially reasonable debt financing upon request. If after effective date IBC closes an equity transaction with net proceeds to IBC in excess of $2,500,000, IBC/Buyer shall pay to IHT an amount equal to (a) 50% of the net proceeds received by IBC and (b) 50% of the sum of the unpaid balance of the note and accrued interest accrued but unpaid interest thereon, as the date of receipt of the net proceeds by IBC. IHT has agreed to provide continuing working capital support for a period of six months in the amount of approximately $100,000 over a six month period to IBC for transitional purposes. IHT has no managerial control nor does IHT have the ability to direct the operations or capital requirements of IBC as of August 1, 2018. IHT has no rights to any benefits or losses from IBC as of August 1, 2018. During the fiscal year ended January 31, 2019 IHT had provided $100,000 to IBC. Default If Buyer has not paid two or more payments on the note as scheduled, or if Buyer has not satisfied any other provisions in the note, IHT may give Buyer notice of default. If Buyer fails to cure the default within 30 days after notice (a) on or before February 5, 2020, then 75% of the issued and outstanding IBC interest shall be transferred to IHT, and (b) on or after February 5, 2020, then 51% of the issued and outstanding interest of the Company shall be transferred to IHT. Currently there has been no default. Sale of Yuma Property On July 31, 2018, IHT entered into a purchase and sale agreement to sell its Innsuites Yuma Hotel and Suites Best Western (Yuma), together with certain furniture, fixtures, equipment, operating supplies and other ancillary items pertaining to the daily operations to an unrelated third party. The sale was completed on October 24, 2018. The sales price, as revised, was approximately $16.05 million, of which the net proceeds (net of mortgage payoff, commissions and closing costs) received by the IHT was approximately $9.93 million
|  | FOR THE THREE MONTHS ENDED |
|  | APRIL 30, |
|  | 2019 |  |  | 2018 |
REVENUE |  |  |  |  |  |
Room |  | $ | - |  |  | $ | 1,276,105 |
Food and Beverage |  |  | - |  |  |  | 12,540 |
Reservation and Convention |  |  | - |  |  |  | 311,242 |
Other |  |  | - |  |  |  | 11,553 |
TOTAL REVENUE |  |  | - |  |  |  | 1,611,440 |
OPERATING EXPENSES |  |  |  |  |  |  |  |
Room |  |  | - |  |  |  | 301,058 |
Food and Beverage |  |  | - |  |  |  | 16,592 |
Telecommunications |  |  | - |  |  |  | 8,229 |
General and Administrative |  |  | - |  |  |  | 477,436 |
Sales and Marketing |  |  | - |  |  |  | 319,948 |
Reservation Acquisition Costs |  |  | - |  |  |  | 351,574 |
Repairs and Maintenance |  |  | - |  |  |  | 59,481 |
Hospitality |  |  | - |  |  |  | 63,993 |
Utilities |  |  | - |  |  |  | 43,451 |
Depreciation |  |  | - |  |  |  | 172,574 |
Real Estate and Personal Property Taxes, Insurance and Ground Rent |  |  | - |  |  |  | 18,886 |
Other |  |  | - |  |  |  | 4,076 |
TOTAL OPERATING EXPENSES |  |  | - |  |  |  | 1,837,298 |
OPERATING LOSS |  |  | - |  |  |  | (225,858 | )
Interest on Mortgage Notes Payable |  |  | - |  |  |  | 67,666 |
Interest on Notes Payable to Banks |  |  | - |  |  |  | 3,148 |
Interest on Other Notes Payable |  |  | - |  |  |  | 12,556 |
TOTAL INTEREST EXPENSE |  |  | - |  |  |  | 83,370 |
CONSOLIDATED NET LOSS OF DISCONTINUED OPERATIONS |  | $ | - |  |  | $ | (309,228 | )

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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