0000949961 2026-01-01 2026-03-31 0000949961 2026-05-07 0000949961 2026-03-31 0000949961 2025-12-31 0000949961 2025-01-01 2025-03-31 0000949961 us-gaap:RelatedPartyMember 2026-01-01 2026-03-31 0000949961 us-gaap:RelatedPartyMember 2025-01-01 2025-03-31 0000949961 us-gaap:CommonStockMember 2025-12-31 0000949961 us-gaap:TreasuryStockCommonMember 2025-12-31 0000949961 us-gaap:AdditionalPaidInCapitalMember 2025-12-31 0000949961 us-gaap:RetainedEarningsMember 2025-12-31 0000949961 us-gaap:CommonStockMember 2026-01-01 2026-03-31 0000949961 us-gaap:TreasuryStockCommonMember 2026-01-01 2026-03-31 0000949961 us-gaap:AdditionalPaidInCapitalMember 2026-01-01 2026-03-31 0000949961 us-gaap:RetainedEarningsMember 2026-01-01 2026-03-31 0000949961 us-gaap:CommonStockMember 2026-03-31 0000949961 us-gaap:TreasuryStockCommonMember 2026-03-31 0000949961 us-gaap:AdditionalPaidInCapitalMember 2026-03-31 0000949961 us-gaap:RetainedEarningsMember 2026-03-31 0000949961 us-gaap:CommonStockMember 2024-12-31 0000949961 us-gaap:TreasuryStockCommonMember 2024-12-31 0000949961 us-gaap:AdditionalPaidInCapitalMember 2024-12-31 0000949961 us-gaap:RetainedEarningsMember 2024-12-31 0000949961 2024-12-31 0000949961 us-gaap:CommonStockMember 2025-01-01 2025-03-31 0000949961 us-gaap:TreasuryStockCommonMember 2025-01-01 2025-03-31 0000949961 us-gaap:AdditionalPaidInCapitalMember 2025-01-01 2025-03-31 0000949961 us-gaap:RetainedEarningsMember 2025-01-01 2025-03-31 0000949961 us-gaap:CommonStockMember 2025-03-31 0000949961 us-gaap:TreasuryStockCommonMember 2025-03-31 0000949961 us-gaap:AdditionalPaidInCapitalMember 2025-03-31 0000949961 us-gaap:RetainedEarningsMember 2025-03-31 0000949961 2025-03-31 0000949961 ior:IncomeOpportunityRealtyInvestorsIncMember ior:TranscontinentalRealtyInvestorsIncMember 2026-03-31 0000949961 ior:IncomeOpportunityRealtyInvestorsIncMember ior:TranscontinentalRealtyInvestorsIncAndAffiliatesMember us-gaap:CommonStockMember 2026-03-31 0000949961 ior:TranscontinentalRealtyInvestorsInc1Member ior:AmericanRealtyInvestorsIncMember 2026-03-31 0000949961 ior:UnifiedHousingFoundationIncMember 2026-01-01 2026-03-31 0000949961 ior:UnifiedHousingFoundationIncMember 2026-03-31 0000949961 ior:UnifiedHousingFoundationIncMember 2025-12-31 0000949961 ior:AmericanRealtyInvestorsInc1Member ior:MayRealtyHoldingsIncMember 2026-03-31 0000949961 ior:PillarMember 2026-01-01 2026-03-31 0000949961 ior:PillarMember 2025-01-01 2025-03-31 0000949961 ior:UnifiedHousingFoundationIncMember 2025-01-01 2025-03-31 0000949961 ior:PillarMember 2026-03-31 0000949961 ior:PillarMember 2025-12-31 iso4217:USD shares iso4217:USD shares pure false --12-31 2026 Q1 0000949961

10-Q true 2026-03-31 false 001-14784 INCOME OPPORTUNITY REALTY INVESTORS, INC. NV 75-2615944 1603 Lyndon B. Johnson Freeway Suite 800 Dallas TX 75234 (469) 522-4200 Common Stock IOR NYSEAMER Yes Yes Non-accelerated Filer true false false 4066178

4000

6000

154000

244000

115813000

114595000

115971000

114845000

10960000

11072000

126931000

125917000

4000

0.01

10000000

4173675

4066178

42000

107497

1749000

61955000

66679000

65669000

126927000

125917000

126931000

125917000

11000

12000

73000

68000

24000 27000

97000

95000

-97000

-95000

1376000

1347000

269000

263000

1010000

989000

0.25

0.24

4066178

42000

-1749000

61955000

65669000

125917000

1010000

42000

-1749000

61955000

66679000

126927000

42000

-1749000

61955000

61679000

121927000

989000

42000

-1749000

61955000

62668000

122916000

1010000

989000

-90000

-73000

1218000

920000

4000

5000

-114000

147000

112000

-2000

147000

6000

9000

4000

156000

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">1.</td><td id="xdx_829_zKVbOTvYzxZb">Organization</td></tr></table> Income Opportunity Investors, Inc. (the “Company”) is an externally managed company that currently holds investments in mortgage notes receivables. As used herein, the terms “IOR”, “the Company”, “We”, “Our”, or “Us” refer to the Company. Transcontinental Realty Investors, Inc. (“TCI”), whose common stock is listed on the NYSE under the symbol “TCI”, owned approximately <span id="xdx_901_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TranscontinentalRealtyInvestorsIncMember__srt--OwnershipAxis__custom--IncomeOpportunityRealtyInvestorsIncMember_zsqE2KvuqK91" title="Percentage of ownership">84.6% of our stock at March 31, 2026 and together with an affiliate owned approximately <span id="xdx_905_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TranscontinentalRealtyInvestorsIncAndAffiliatesMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__srt--OwnershipAxis__custom--IncomeOpportunityRealtyInvestorsIncMember_z82KnXgAHMgg">91.2% of our common stock at March 31, 2026. Accordingly our financial results are included in the consolidated financial statements of TCI. American Realty Investors, Inc. (“ARL”), whose common stock is traded on the NYSE under the symbol “ARL”, in turn, owns approximately <span id="xdx_907_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AmericanRealtyInvestorsIncMember__srt--OwnershipAxis__custom--TranscontinentalRealtyInvestorsInc1Member_zxFicECgIpa5">79.2% of TCI. Our business is managed by Pillar Income Asset Management, Inc. (“Pillar”) in accordance with an Advisory Agreement that is reviewed annually by our Board of Directors. Pillar is considered to be a related party (See Note 4 – Related Party Transactions). Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities. Pillar also arranges our debt and equity financing with third party lenders and investors.

0.846

0.912

0.792

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">2.</td><td id="xdx_827_zGMFUMB8aX5b">Summary of Significant Accounting Policies</td></tr></table> Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The consolidated balance sheet at December 31, 2025 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights. We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations.

Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The consolidated balance sheet at December 31, 2025 was derived from the audited consolidated financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. We consolidate entities in which we are considered to be the primary beneficiary of a variable interest entity (“VIE”) or have a majority of the voting interest of the entity. We have determined that we are a primary beneficiary of the VIE when we have (i) the power to direct the activities of a VIE that most significantly impacts its economic performance, and (ii) the obligations to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether we are the primary beneficiary, we consider qualitative and quantitative factors, including ownership interest, management representation, ability to control decision and other contractual rights. We account for entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary under the equity method of accounting. Accordingly, we include our share of the net earnings or losses of these entities in our results of operations.

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">3.</td><td id="xdx_826_zUdiQYDEslFf">Notes Receivable</td></tr></table> We have a note receivable issued by Unified Housing Foundation, Inc. (“UHF”) that bears interest at the Secured Overnight Financing Rate (“SOFR”) in effect on the last day of the preceding calendar quarter and matures on <span id="xdx_904_eus-gaap--DebtInstrumentMaturityDate_dd_c20260101__20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--UnifiedHousingFoundationIncMember_zzGU4pNdiRFl" title="Maturity date">December 31, 2032. The interest rate of the new note was <span id="xdx_90A_eus-gaap--LongTermDebtPercentageBearingVariableInterestRate_iI_pip0_dp_uPure_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--UnifiedHousingFoundationIncMember_z90y1uipWrTe" title="Interest rate">3.87% and <span id="xdx_903_eus-gaap--LongTermDebtPercentageBearingVariableInterestRate_iI_pip0_dp_uPure_c20251231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--UnifiedHousingFoundationIncMember_zAGDIbrXpJg7" title="Interest rate">4.24% as of March 31, 2026 and December 31, 2025, respectively. UHF is determined to be a related party due to our significant investment in the performance of the collateral secured by the note receivable. Principal and interest payments on the note are funded from surplus cash flow from operations, sale or refinancing of the underlying property and are cross collateralized to the extent that any surplus cash is available from any other property owned by UHF.

2032-12-31

0.0387

0.0424

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">4.</td><td id="xdx_820_zQpzrVlPws3l">Related Party Transactions</td></tr></table> We engage in certain business transactions with related parties, including investment in notes receivables. Transactions involving related parties cannot be presumed to be carried out on at arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities. Related party transactions may not always be favorable to our business and may include terms, conditions and agreements that are not necessarily beneficial to or in our best interest. Pillar is a wholly owned subsidiary of the May Realty Holdings, Inc., which owns approximately <span id="xdx_90A_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_pid_dp_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MayRealtyHoldingsIncMember__srt--OwnershipAxis__custom--AmericanRealtyInvestorsInc1Member_zS4qwXVZWuF9" title="Percentage of ownership">90.8% of ARL, which owns approximately <span id="xdx_905_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AmericanRealtyInvestorsIncMember__srt--OwnershipAxis__custom--TranscontinentalRealtyInvestorsInc1Member_zagZYpO693Ak" title="Percentage of ownership">79.2% of TCI, which owns approximately <span id="xdx_90C_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TranscontinentalRealtyInvestorsIncMember__srt--OwnershipAxis__custom--IncomeOpportunityRealtyInvestorsIncMember_zlXpTsZOuAjg" title="Percentage of ownership">84.6% of the Company. Advisory fees paid to Pillar were $24 and $27 for the three months ended March 31, 2026 and 2025, respectively. Our note receivable issued by UHF (See Note 3 – Notes Receivable). UHF is determined to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable. Interest income on these notes was $<span id="xdx_90C_eus-gaap--InterestIncomeExpenseNonoperatingNet_pn3n3_c20260101__20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--UnifiedHousingFoundationIncMember_zfOLAbzqOey8" title="Interest income from related parties">105 and $<span id="xdx_90E_eus-gaap--InterestIncomeExpenseNonoperatingNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--UnifiedHousingFoundationIncMember_zYZA1w1RW0Uh" title="Interest income from related parties">124 for the three months ended March 31, 2026 and 2025, respectively. Receivables from related parties were $115,813 and $114,595 at March 31, 2026 and December 31, 2025, respectively; which represents amounts outstanding advanced to Pillar net of unreimbursed fees (“Pillar Receivable”), which bears interest in accordance with a cash management agreement. On January 1, 2024, an amendment to the cash management agreement changed the interest rate on the Pillar Receivable from prime plus one percent to SOFR. Interest income on related party receivables was $<span id="xdx_90F_eus-gaap--InterestIncomeExpenseNonoperatingNet_pn3n3_c20260101__20260331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--PillarMember_zClnn2LwLqge" title="Interest income from related parties">1,271 and $<span id="xdx_905_eus-gaap--InterestIncomeExpenseNonoperatingNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--PillarMember_zNp93MSzZlO8" title="Interest income from related parties">1,223 for the three months ended March 31, 2026 and 2025, respectively.

0.908

0.792

0.846

24000 27000

105000

124000

115813000

114595000

1271000

1223000

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">5.</td><td id="xdx_825_zwohkYSYnvlj">Stockholders’ Equity</td></tr></table> We have a stock repurchase program that allows for the repurchase of up to 1,650,000 shares of our common stock. This repurchase program has no termination date. As of March 31, 2026, there are 513,003 shares remaining that can be repurchased.

1650000

513003

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">6.</td><td id="xdx_82D_zI3ItREPMCK2">Commitments and Contingencies</td></tr></table> We believe that we will generate excess cash from property operations in the next twelve months; such excess, however, might not be sufficient to discharge all of our obligations as they become due.

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">7.</td><td id="xdx_825_zlY9nebTfX4">Subsequent Events</td></tr></table> The date to which events occurring after March 31, 2026, the date of the most recent balance sheet, have been evaluated for possible adjustment to the consolidated financial statements or disclosure is May 7, 2026, which is the date on which the consolidated financial statements were available to be issued.