##### 



FORM 10-Q/A
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTER ENDED MARCH 31, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM           TO
 Commission File Number 001-14784
 INCOME OPPORTUNITY REALTY INVESTORS, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Nevada
    
    75-2615944(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)
 1755 Wittington Place, Suite 340
Dallas, Texas
 
 (Address of principal executive offices)
 75234
 
 (Zip Code)
 
 (Former name, former address and former fiscal year,
 if changed since last report)
 þ o
 o þ
 o þ
 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
 o o
 APPLICABLE ONLY TO CORPORATE ISSUERS:
  Common Stock, $.01 par value
(Class)
    
    4,168,035 shares
(Outstanding at November 4, 2005)




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##### 



AMENDMENT NO. 3 TO
QUARTERLY REPORT ON FORM 10-Q FOR
INCOME OPPORTUNITY REALTY INVESTORS, INC.
FOR THE QUARTER ENDED MARCH 31, 2005
  
    
    Pages 4-12Part I, Item 1. Financial Statements. The consolidated financial
statements and related Notes are further amended to consolidate all prior amendments.
    
    Exhibit 31.1  Certification Required by Exchange Act Rules 13a-14(a) and 15d-14(a)
(refiled as required by Rule 12b-15).
    
    Exhibit 32.1Certification Pursuant to 18 U.S.C. § 1350 (refiled as required by Rule
12b-15).
 2




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##### 



SIGNATURES
   INCOME OPPORTUNITY REALTY INVESTORS, INC.By:
    /s/ Robert N. Crouch IIRobert N. Crouch II, Executive Vice President, ChiefFinancial Officer and Acting Principal Executive Officer 3




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##### 



March 31,
    
    
    December 31,2005
    
    
    2004(Restated)
    
    
    (Restated)(dollars in thousands,except per share)AssetsReal estate held for investment
    
    $
    35,033
    
    
    $
    34,988Lessaccumulated depreciation
    
    
    (3,796
    )
    
    
    (3,620
    )31,237
    
    
    
    31,368Related Party Notes and interest receivable
    
    
    55,454
    
    
    
    54,911Investment in real estate partnerships
    
    
    596
    
    
    
    604Cash and cash equivalents
    
    
    214
    
    
    
    399Receivables from affiliates
    
    
    261
    
    
    
    261Other assets
    
    
    3,034
    
    
    
    3,095$
    90,796
    
    
    $
    90,638Liabilities and Stockholders EquityLiabilitiesNotes and interest payable
    
    $
    44,372
    
    
    $
    44,571Payables to affiliates
    
    
    1,497
    
    
    
    1,248Other liabilities
    
    
    1,344
    
    
    
    1,52947,213
    
    
    $
    47,348Commitments and contingenciesStockholders equityCommon Stock, $.01 par value; authorized, 10,000,000 shares; issued and outstanding
1,389,345 shares in 2005 and 1,438,945 shares in 2004
    
    
    14
    
    
    
    14Paid-in capital
    
    
    61,983
    
    
    
    61,983Accumulated deficit
    
    
    (18,414
    )
    
    
    (18,707
    )43,583
    
    
    
    43,290$
    90,796
    
    
    $
    90,638
  4




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##### 



For the Three MonthsEnded March 31,(dollars in thousands,except per share)2005
    
    
    2004(Restated)
    
    
    (Restated)Property revenueRents
    
    $
    1,529
    
    
    $
    2,136Property expenseProperty operations (including $29 in 2005 and $32 in 2004 to
affiliates and related parties)
    
    
    821
    
    
    
    1,211Operating income
    
    
    708
    
    
    
    925Other income (loss)Interest
    
    
    974
    
    
    
    598Equity in loss of equity partnerships
    
    
    (9
    )
    
    
    (1
    )965
    
    
    
    597Other expenseInterest
    
    
    871
    
    
    
    1,118Depreciation
    
    
    177
    
    
    
    342Advisory fee to affiliate
    
    
    166
    
    
    
    192Net income fee to affiliate
    
    
    24
    
    
    
    215General and administrative
    
    
    142
    
    
    
    2701,380
    
    
    
    2,137Net income (loss) from continuing operations
    
    
    293
    
    
    
    (615
    )Discontinued operations:Loss from discontinued operations
    
    
    
    
    
    
    (128
    )Gain on sale of operations
    
    
    
    
    
    
    3,257
    
    
    
    3,129Net income
    
    $
    293
    
    
    $
    2,514Earnings (loss) per shareNet income (loss) from continuing operations
    
    $
    0.21
    
    
    $
    (0.42
    )Discontinued operations
    
    
    
    
    
    
    2.17Net income
    
    $
    0.21
    
    
    $
    1.75Weighted average common shares used in computing earnings per share
    
    
    1,389,345
    
    
    
    1,438,945
  5




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##### 



Common Stock
    
    Paid-in
    
    Accumulated
    
    StockholdersShares
    
    Amount
    
    Capital
    
    Deficit
    
    Equity(dollars in thousands)Balance, January 1, 2005 (as restated)
    
    
    1,389,345
    
    
    
    $14
    
    
    
    $61,983
    
    
    
    $(18,707
    )
    
    
    $43,290Net income (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    293
    
    
    
    293Balance, March 31, 2005 (as restated)
    
    
    1,389,345
    
    
    
    $14
    
    
    
    $61,983
    
    
    
    $(18,414
    )
    
    
    $43,583
  6




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##### 



For the Three MonthsEnded March 31,2005
    
    
    2004(Restated)
    
    
    (Restated)(dollars in thousands)Cash Flows from Operating ActivitiesNet income/(loss)
    
    $
    293
    
    
    $
    2,514Reconciliation of net income (loss) to net cash used by operating activitiesAdjustments to reconcile net income (loss) to net cash used in operating activitiesDepreciation and amortization
    
    
    246
    
    
    
    347Gain on sale of real estate
    
    
    
    
    
    
    (3,257
    )Loss of equity partnerships
    
    
    9
    
    
    
    1(Increase) decrease in interest receivable
    
    
    (543
    )
    
    
    209Decrease (Increase) in other assets
    
    
    298
    
    
    
    (129
    )(Decrease) Increase in interest payable
    
    
    (125
    )
    
    
    17(Decrease) Increase in other liabilities
    
    
    (538
    )
    
    
    385Net cash provided by (used in) operating activities
    
    
    (360
    )
    
    
    87Cash Flows from Investing ActivitiesFunding of equity partnerships
    
    
    
    
    
    
    Real estate improvements
    
    
    
    
    
    
    Proceeds from sale of real estate
    
    
    
    
    
    
    1,437Advances from (payments to) advisor
    
    
    249
    
    
    
    (2,082
    )Net cash provided by (used in) investing activities
    
    
    249
    
    
    
    (645
    )Cash Flows from Financing ActivitiesPayments on notes payable
    
    $
    (74
    )
    
    $
    (586
    )Proceeds on notes payable
    
    
    
    
    
    
    1,193Deferred financing costs
    
    
    
    
    
    
    5Net cash provided by (used in) financing activities
    
    
    (74
    )
    
    
    612Net increase in cash and cash equivalents
    
    $
    (185
    )
    
    $
    54Cash and cash equivalents, beginning of period
    
    
    399
    
    
    
    58Cash and cash equivalents, end of period
    
    $
    214
    
    
    $
    112Supplemental Disclosures of Cash Flow InformationCash paid for interest
    
    $
    978
    
    
    $
    1,107
  7




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Sales
    
    
    Net Cash
    
    
    Debt
    
    
    GainProperty
    
    Location
    
    
    Sq.Ft.
    
    
    Price
    
    
    Received
    
    
    Discharged
    
    
    on SaleFirst QuarterApartment BuildingTreehouse
    
    San Antonio, TX
    
    88,957 Sq.Ft.
    
    $
    5,400
    
    
    $
    1,100
    
    
    $
    3,747
    
    
    $
    3,257
  Junior Mortgage Loans.
      8




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Related Party.
   9




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##### 



SWI
    
    
    TCIBalance, December 31, 2004 (as restated)
    
    
    (1,248
    )
    
    $
    261Cash transfers
    
    
    553
    
    
    
    Cash repayments
    
    
    (592
    )
    
    
    Other additions
    
    
    
    
    
    
    Other repayments (as restated)
    
    
    (210
    )
    
    
    Balance, March 31, 2005 (as restated)
    
    
    (1,497
    )
    
    $
    261
 Returns on Metra Properties.
 10




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##### 



Three Months EndedMarch 31, 2005
    
    
    
    
    
    Commercial(Restated)
    
    Land
    
    
    Properties
    
    
    Apartments
    
    
    TotalRents
    
    $
    
    
    
    $
    322
    
    
    $
    1,207
    
    
    $
    1,529Property operating expenses
    
    
    
    
    
    
    211
    
    
    
    610
    
    
    
    821Operating income (loss)
    
    $
    
    
    
    $
    111
    
    
    $
    597
    
    
    $
    708Depreciation
    
    $
    
    
    
    $
    66
    
    
    $
    111
    
    
    $
    177Interest
    
    
    221
    
    
    
    326
    
    
    
    324
    
    
    
    871Real estate improvements
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    45Assets
    
    
    
    
    
    
    12,979
    
    
    
    18,258
    
    
    
    31,237
 Three Months EndedMarch 31, 2004
    
    
    
    
    
    Commercial(Restated)
    
    Land
    
    
    Properties
    
    
    Apartments
    
    
    TotalRents
    
    $
    
    
    
    $
    722
    
    
    $
    1,414
    
    
    $
    2,136Property operating expenses
    
    
    
    
    
    
    388
    
    
    
    823
    
    
    
    1,211Operating income (loss)
    
    $
    
    
    
    $
    334
    
    
    $
    591
    
    
    $
    925Depreciation
    
    $
    
    
    
    $
    188
    
    
    $
    154
    
    
    $
    342Interest
    
    
    325
    
    
    
    324
    
    
    
    469
    
    
    
    1,118Real estate improvements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Assets
    
    
    44
    
    
    
    21,917
    
    
    
    26,149
    
    
    
    48,110
   For the Three MonthsEnded March 31,2005
    
    
    2004(Restated)
    
    
    (Restated)FeesAdvisory
    
    $
    166
    
    
    $
    192Net income
    
    
    24
    
    
    
    215Property and construction management and leasing commission
    
    
    29
    
    
    
    32$
    219
    
    
    $
    439Cost reimbursements
    
    $
    19
    
    
    $
    19
   11




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For the Three MonthsEnded March 31,2005
    
    
    2004RevenueRental
    
    $
    
    
    
    $
    168Property Operations
    
    
    
    
    
    
    172Operating (loss)/income
    
    
    
    
    
    
    (4
    )ExpensesInterest
    
    
    
    
    
    
    119Depreciation
    
    
    
    
    
    
    5Total expenses
    
    
    
    
    
    
    124Net (loss)/income from discontinued operations before gains on sale of operations
    
    
    
    
    
    
    (128
    )Gain on sale of operations
    
    
    
    
    
    
    3,257Net income from discontinued operations
    
    $
    
    
    
    $
    3,129
   Liquidity.
 Other Litigation.
 12