Income Opportunity Realty Investors, Inc. Reports Third Quarter 2016 Results

Income Opportunity Realty Investors, Inc. (NYSE MKT: IOT), a Dallas-based real estate investment company, reported results of operations for the third quarter ended September 30, 2016. IOT announced today that the Company reported net income applicable to common shares of $752,000 or $0.18 per diluted earnings per share for the three months ended September 30, 2016, as compared to net income applicable to common shares of $680,000 or $0.16 per diluted earnings per share for the same period ended 2015.

"The Company believes there is no reason to adjust our strategic posture of maintaining a strong focus on our multi-family portfolio. We will also continue to solidify the portfolio and pay close attention to all operational details, while at the same time maintaining our commitment to creating value. We believe our third quarter 2016 operating results, combined with our recent acquisitions, demonstrates yet another quarter of stabilized performance for the Company. We believe the portfolio is well positioned to deliver solid financial returns for the remainder of 2016," said Danny Moos, the Company's Chief Executive Officer and President. "We are pleased that we are seeing continued improvements in our operations from these endeavors and will continue to adapt to market challenges with an eye on both near term economic challenges and long-term prospects as the real estate market improves."

Land held subject to sales contract is our sole operating segment. In November 2015 the Company entered into a sales contract with an unrelated party. The contract was for all of the developable land owned by the Company. Due to the continuing involvement of the seller including the level of seller financing involved, the transaction is being accounted for under the deposit method. Under the deposit method, the no revenue is recognized and the asset remains on the books until the criteria for full revenue recognition are met. There was no revenue or operating expenses for this segment for the three months ended September 30, 2016.

IOT has notes receivable of $22.9 million at September 30, 2016. Interest income was $1.1 million for the three months ended September 30, 2016, a decrease of $42,000 from interest income recognized in the third quarter of 2015.

The company incurred no mortgage or loan interest for the three months ended September 30, 2016 as these obligations were paid off in 2015.

About Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a portfolio of equity real estate in Texas, including undeveloped land. The Company invests in real estate through direct equity ownership and partnerships. For more information, visit the Company's website at www.incomeopp-realty.com.
               
 
INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 

Three Months Ended September 30,

Nine Months Ended September 30,
2016 2015 2016 2015
(dollars in thousands, except per share amounts)
Revenues:
Rental and other property revenues $ - $ - $ - $ -
 
Expenses:
Property operating expenses (including $0 and $11 for the three months and $0 and $25 for the nine months ended 2016 and 2015, respectively, from related parties) - 56 - 71
General and administrative (including $47 and $45 for the three months and $90 and $171 for the nine months ended 2016 and 2015, respectively, from related parties) 114 62 333 359
Net income fee to related party 67 51 193 142
Advisory fee to related party   162     176     475     526  
Total operating expenses   343     345     1,001     1,098  
Net operating loss (343 ) (345 ) (1,001 ) (1,098 )
 
Other income (expense):
Interest income from related parties 1,095 1,137 3,389 3,376
Other income - - - -
Mortgage and loan interest   -     (112 )   -     (441 )
Total other income   1,095     1,025     3,389     2,935  
Income before taxes   752     680     2,388     1,837  
Net income $ 752   $ 680   $ 2,388   $ 1,837  
 
Earnings per share - basic
Net income $ 0.18   $ 0.16   $ 0.57   $ 0.44  
Net income applicable to common shares $ 0.18   $ 0.16   $ 0.57   $ 0.44  
 
Earnings per share - diluted
Net income $ 0.18   $ 0.16   $ 0.57   $ 0.44  
Net income applicable to common shares $ 0.18   $ 0.16   $ 0.57   $ 0.44  
 
Weighted average common shares used in computing earnings per share 4,168,214 4,168,214 4,168,214 4,168,214
Weighted average common shares used in computing diluted earnings per share 4,168,214 4,168,214 4,168,214 4,168,214
       
 
INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
 
September 30, December 31,
2016 2015
(unaudited)
(dollars in thousands, except par value amount)
Assets
Real estate land holdings subject to sales contract, at cost $ 22,717   $ 22,717  
Total real estate 22,717 22,717
 
Notes and interest receivable from related parties 24,757 26,708
Less allowance for doubtful accounts   (1,826 )   (1,826 )
Total notes and interest receivable 22,931 24,882
 
Cash and cash equivalents 1 2
Receivable and accrued interest from related parties 38,786 34,313
Other assets   2,257     2,390  
Total assets $ 86,692   $ 84,304  
 
Liabilities and Shareholders' Equity
Liabilities:
Accounts payable and other liabilities $ 6   $ 6  
Total liabilities 6 6
Shareholders' equity:
Common stock, $0.01 par value, authorized 10,000,000; issued 4,173,675 and outstanding 4,168,214 shares in 2016 and 2015 42 42
Treasury stock at cost, 5,461 shares in 2016 and 2015 (39 ) (39 )
Paid-in capital 61,955 61,955
Retained earnings   24,728     22,340  
Total shareholders' equity   86,686     84,298  
Total liabilities and shareholders' equity $ 86,692   $ 84,304  

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