LEASES

6 Months Ended

Jul. 31, 2021

Leases

LEASES

14. LEASES

The Trust has operating leases for its corporate offices in Phoenix, Arizona, land leased in Albuquerque, New Mexico, and a cable equipment finance lease in Tucson, Arizona. The Trust’s corporate office lease includes options to extend or terminate the leases and the Trust includes these options in the lease term when it is reasonably certain to exercise that option. All leases are non-cancelable.

Operating Leases

On August 4, 2017, the Trust entered into a five-year office lease agreement with Northpoint Properties for a commercial office lease at 1730 E Northern Ave, Suite 122, Phoenix, Arizona 85020 commencing on September 1, 2017. Base monthly rent of $4,100 increases 6% on a yearly basis. No rent is due for October 2018 and July 2022 months. The Trust also agreed to pay electricity and applicable sales tax. The office lease agreement provides early termination with a 90-day notification with an early termination fee of $2,000 for year 5 of the lease term, which expires August 31, 2022.

The Company’s Albuquerque Hotel is subject to non-cancelable ground lease. The Albuquerque Hotel non-cancelable ground lease was extended on January 14, 2014 and expires in 2058.

The following table presents the Company’s lease costs for the six months ended July 31, 2021:

	Six Months Ended
	July 31, 2021
Operating Lease Costs:
Operating lease cost*		100,174

* Short term lease costs were immaterial.

Supplemental cash flow information is as follows:

	Six Months Ended
	July 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	43,002
Lease obligations:
Operating leases, net	$	2,341,098
Long-term obligations	$	2,295,144

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2021
Operating leases		37
Weighted average discount rate Operating leases		4.85	%

The aggregate future lease payments for Operating Lease Liability as of July 31, 2021 are as follows:

For the Years Ending July 31,
2022	$	86,821
2023		148,348
2024		112,116
2025		112,116
2026		112,116
Thereafter		5,039,196
Total minimum lease payments	$	5,610,713
Less: amount representing interest		3,269,615
Total present value of minimum payments		2,341,098
Less: current portion	$	45,954
Long term portion of operating lease liability		2,295,144

Finance Leases

The Company’s Tucson Oracle Hotel is subject to non-cancelable cable lease. The Tucson Oracle Hotel non-cancelable cable lease expires in 2023.

The following table presents the Company’s lease costs for the six months ended July 31, 2021:

	Six Months Ended
	July 31, 2021
Finance Lease Costs:
Amortization of right-of-use assets	$	13,874
Interest on lease obligations		1,801

Supplemental cash flow information is as follows:

	Six Months Ended
	July 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	13,874
Lease obligations:
Finance leases, net	$	66,216
Long-term obligations	$	44,940

Weighted average remaining lease terms and discount rates were as follows:

Weighted average remaining lease term (years)	July 31, 2021
Finance leases		2.25
Weighted average discount rate		4.85	%
Finance leases

The aggregate future lease payments for Finance Lease Liability as of July 31, 2021 are as follows:

For the Years Ending July 31,
2022		15,562
2023		31,123
2024		24,202
Total minimum lease payments	$	70,887
Less: amount representing interest		4,671
Total present value of minimum payments		66,216
Less: current portion	$	21,276
Long term portion of finance lease liability		44,940