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NOTES RECEIVEABLE | 9 Months Ended
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Oct. 31, 2023
Notes Receiveable |
NOTES RECEIVEABLE | 16. NOTES RECEIVEABLE Sale of IBC Hospitality Technologies; IBC Hotels LLC (IBC) On August 15, 2018 InnSuites Hospitality Trust (IHT) entered into a final sale agreement of its technology subsidiary, IBC Hotels LLC (IBC), to an unrelated third-party buyer (Buyer). As a part of the amended sale agreement, the Trust received a secured promissory note adjusted to the principal amount of $1,925,000 with interest to be accrued at 3.75% per annum, which is recorded in the accompanying consolidated balance sheet in continuing operations.
| ● | No interest accrued through May 2023, and no payments on the note receivable including principal and interest based on the extended time period were due through May 2023.
| ● | 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 IBC closes an equity transaction with net proceeds to IBC in excess of $2,500,000, IBC/Buyer shall pay or pre-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.
| ● | The note matures on June 1, 2024. IHT is in discussions for a further extension/modification.
| ● | Future payments on this note are shown in the table below.
SCHEDULE OF FUTURE PAYMENTS OF DEBT
FISCAL YEAR |  |  |  |
2024 |  |  |  | 1,925,000 |
Total |  |  | $ | 1,925,000 |
| ● | Management’s evaluation of the current financial position of the Buyer, based on unaudited financial statements provided.
| ● | Management’s best, conservative valuation of IBC’s assets, and their marketability, in the case of a default by the Buyer.
| ● | The current and future impact of the COVID-19 pandemic, on the travel and hospitality industry, in which IBC’s reservation and booking technology operates.
As of October 31, 2023, management evaluated the carrying value of the note determined no further impairment is needed at this time. This is detailed further with ongoing discussions of an extension, which allows time for IBC to benefit from the current rebound in the travel, hospitality services, and hotel industries currently being experienced. 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.

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