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What changed in INTERGROUP CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of INTERGROUP CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+334 added−268 removedSource: 10-K (2025-09-30) vs 10-K (2024-10-01)

Top changes in INTERGROUP CORP's 2025 10-K

334 paragraphs added · 268 removed · 176 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

47 edited+17 added−5 removed27 unchanged
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations for more information regarding the effects on our results of operations. COMPETITION The Hotel has successfully completed its full guest-rooms renovation over the last 2 years along with public space, fitness center, corridors, and meeting space.
Biggest changeCOMPETITION The Hotel has successfully completed its full guest rooms renovation over the last two years, along with renovations to public space, the fitness center, corridors, and meeting space. With newly renovated rooms, the Hotel expects to drive rate and grow RevPar relative to the market and its competitive set (“CompSet”).
The Company acquires its investments in real estate and other investments utilizing cash, securities, or debt, subject to approval or guidelines of the Board of Directors and its Executive Strategic Real Estate and Securities Investment Committee. The Company may also look for new real estate investment opportunities in hotels, apartments, office buildings and development properties.
The Company acquires its investments in real estate and other investments utilizing cash, securities, or debt, subject to approval and guidelines of the Board of Directors and its Executive Strategic Real Estate and Securities Investment Committee. The Company may also look for new real estate investment opportunities in hotels, apartments, office buildings and development properties.
The Hotel expects and anticipates that the terms of conditions of CBAs will have an impact on wage and benefit costs, operating expenses, and certain hotel operations during the life of each CBA and incorporates these principles into its operating and budgetary practices.
The Hotel expects and anticipates that the terms and conditions of CBAs will have an impact on wage and benefit costs, operating expenses, and certain hotel operations during the life of each CBA and incorporates these principles into its operating and budgetary practices.
Like most hotels in the San Francisco area, the Hotel generally maintained high occupancy and room rates during the entire year except for the weeks starting from Thanksgiving to first week of January due to the holiday season. These seasonal patterns can be expected to cause fluctuations in the quarterly revenues of the Hotel. See Item 7.
Like most hotels in the San Francisco Bay Area, the Hotel generally maintained high occupancy and room rates during the entire year except for the weeks starting from Thanksgiving to the first week of January due to the holiday season. These seasonal patterns can be expected to cause fluctuations in the quarterly revenues of the Hotel. See Item 7.
On June 26, 2015, Operating and Hilton entered into an amended franchise agreement that, among other things, extended the License Agreement through January 2030, and provided the Partnership with certain key money cash incentives to be earned through January 2030.
On June 26, 2015, Operating and Hilton entered into an amended franchise agreement that, among other things, extended the License Agreement through January 31, 2030, and provided the Partnership with certain key money cash incentives to be earned through January 2030.
The term of the License Agreement was for an initial period of fifteen years commencing on the date the Hotel began operating as a Hilton hotel, with an option to extend the License Agreement for another five years, subject to certain conditions.
The term of the License Agreement was for an initial period of fifteen years commencing on the date the Hotel began operating as a Hilton hotel, with an option to extend it for another five years, subject to certain conditions.
Under the terms on the HMA, base management fee (“Basic Fee”) payable to Aimbridge shall be one and seven-tenths percent (1.70%) of total Hotel revenue.
Under the terms of the HMA, base management fee (“Basic Fee”) payable to Aimbridge shall be one and seven-tenths percent (1.70%) of total Hotel revenue.
Depending on certain market conditions and various risk factors, the Chief Executive Officer, and Portsmouth, at times, invest in the same companies in which the Company invests.
Depending on certain market conditions and various risk factors, the Chief Executive Officer, and Portsmouth, at times, may invest in the same companies in which the Company invests.
Properties include sixteen apartment complexes, one commercial real estate property and three single-family houses. The properties are located throughout the United States but are concentrated in Texas and the County of Los Angeles, California. The Company also has an investment in unimproved real property. As of June 30, 2024, all the Company’s operating real estate properties are managed in-house.
Properties include sixteen apartment complexes, one commercial real estate property and three single-family houses. The properties are located throughout the United States but are concentrated in Texas and the County of Los Angeles, California. The Company also has an investment in unimproved real property. As of June 30, 2025, all the Company’s operating real estate properties are managed in-house.
HILTON HOTELS FRANCHISE LICENSE AGREEMENT The Partnership entered into a Franchise License Agreement (the “License Agreement”) with the HLT Existing Franchise Holding LLC (“Hilton”) on December 10, 2004.
HILTON HOTELS FRANCHISE LICENSE AGREEMENT The Partnership entered into a Franchise License Agreement (the “License Agreement”) with HLT Franchise Holding LLC (“Hilton”) on December 10, 2004.
The Company has not received written notice from any governmental authority of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of its present properties. 9 Competition – Rental Properties The ownership, operation, and leasing of multifamily rental properties are highly competitive.
The Company has not received written notice from any governmental authority of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of its present properties. 7 COMPETITION – RENTAL PROPERTIES The ownership, operation, and leasing of multifamily rental properties are highly competitive.
Further information with respect to investment in marketable securities and other investments of the Company is set forth in Management Discussion and Analysis of Financial Condition and Results of Operations section and Note 6 of the Notes to Consolidated Financial Statements. SEASONALITY Historically, the Hotel’s operation has been seasonal under normal circumstances.
Further information with respect to investment in marketable securities and other investments of the Company is set forth in Management’s Discussion and Analysis of Financial Condition and Results of Operations section and Note 6 of the Notes to Consolidated Financial Statements. SEASONALITY Historically, the Hotel’s operation has been seasonal under normal circumstances.
As of June 30, 2024, approximately 90% of those employees were represented by one of three labor unions, and their terms of employment were determined under various collective bargaining agreements (“CBAs”) to which Aimbridge was a party to as agent for Hotel and Justice.
As of June 30, 2025, approximately 90% of those employees were represented by one of three labor unions, and their terms of employment were determined under various collective bargaining agreements (“CBAs”) to which Aimbridge was a party as agent for Hotel and Justice.
Reference in this document to that website address does not constitute incorporation by reference of the information contained on the website. 10
Reference in this document to that website address does not constitute incorporation by reference of the information contained on the website.
The term of the management agreement is for an initial period of ten years commencing on the February 3, 2017 date and automatically renews for successive one (1) year periods, not to exceed five years in the aggregate, subject to certain conditions.
The term of the management agreement is for an initial period of ten years commencing February 3, 2017 and automatically renews for successive one (1) year periods, not to exceed five years in the aggregate, subject to certain conditions.
The Company’s securities investments are made under the supervision of an Executive Strategic Real Estate and Securities Investment Committee of the Board of Directors (the “Committee”). The Committee currently has four members and is chaired by the Company’s Chairman of the Board and President, John V. Winfield.
The Company’s securities investments are made under the supervision of an Executive Strategic Real Estate and Securities Investment Committee of the Board of Directors (the “Committee”). The Committee currently has four members and is chaired by the Company’s Chairman of the Board, Chief Executive Officer and President, John V. Winfield.
These guidelines presently include: (i) corporate equity securities should be listed on the New York Stock Exchange (NYSE), NYSE MKT, NYSE Arca or the Nasdaq Stock Market (NASDAQ); (ii) the issuer of the listed securities should be in compliance with the listing standards of the applicable national securities exchange; and (iii) investment in a particular issuer should not exceed 10% of the market value of the total portfolio.
These guidelines presently include: (i) corporate equity securities should be listed on the New York Stock Exchange (NYSE), NYSE American, NYSE Arca, or the Nasdaq Stock Market, LLC (NASDAQ); (ii) the issuer of the listed securities should be in compliance with the listing standards of the applicable national securities exchange; and (iii) investment in a particular issuer should not exceed 10% of the market value of the total portfolio.
The employees and the Company are not party to any collective bargaining agreement, and the Company believes that its employee relations are satisfactory. The hotel operations had 187 employees as of June 30, 2024.
The employees and the Company are not party to any collective bargaining agreement, and the Company believes that its employee relations are satisfactory. The hotel operations had 187 employees as of June 30, 2025.
The Company was founded upon, and remains committed to, social responsibility. Such social responsibility was originally defined as providing decent and affordable housing to people without regard to race. In 1985, after examining the impact of federal, state, and local equal housing laws, the Company determined to broaden its definition of social responsibility.
The Company was founded upon, and remains committed to, social responsibility. Such social responsibility was originally defined as providing decent, affordable housing for individuals without regard to race. In 1985, after examining the impact of federal, state, and local equal housing laws, the Company determined to broaden its definition of social responsibility.
Resident leases at the Company’s apartment communities are priced competitively based on market conditions, supply and demand characteristics, and the quality and resident service offerings of its communities. EMPLOYEES As of June 30, 2024, the Company’s corporate office and multifamily operations had 28 employees.
Resident leases at the Company’s apartment communities are priced competitively based on market conditions, supply and demand characteristics, and the quality and resident service offerings of its communities. EMPLOYEES As of June 30, 2025, the Company’s corporate office and multifamily operations had 30 employees.
The amended lease, among other things, requires the Hotel to pay to the Foundation a monthly event space fee in the amount of $5,000, adjusted annually based on the local Consumer Price Index. As of June 30, 2024, the monthly event space fee is $7,000.
The amended lease, among other things, requires the Hotel to pay to the Foundation a monthly event space fee in the amount of $5,000, adjusted annually based on the local Consumer Price Index. As of June 30, 2025, the monthly event space fee was $7,000.
The Committee has delegated authority to manage the portfolio to the Company’s Chairman and President together with such assistants and management committees he may engage. The Committee generally follows certain established investment guidelines for the Company’s investments.
The Committee has delegated authority to manage the portfolio to the Company’s Chairman, CEO and President, together with such assistants and management committees as he may designate. The Committee generally follows certain established investment guidelines for the Company’s investments.
The investment guidelines do not require the Company to divest itself of investments, which initially meet these guidelines but subsequently fail to meet one or more of the investment criteria. The Committee has in the past approved non-conforming investments and may in the future approve non-conforming investments. The Committee may modify these guidelines from time to time.
The investment guidelines do not require the Company to divest itself of investments, that initially meet these guidelines but subsequently fail to meet one or more of the investment criteria. The Committee has in the past approved nonconforming investments and may in the future approve nonconforming investments. The Committee may modify these guidelines from time to time.
With business travel slowly returning to San Francisco for the time, we are competing with hotels in more tourist attracting locations and amenities for the leisure traveler. The ability to capitalize on the strong midweek demand of the individual business traveler to the Financial District has been the focus during the timeframe of strong growth in the market.
With business travel slowly returning to San Francisco post-pandemic, we are competing with hotels in more tourist attracting locations and amenities for the leisure traveler. The ability to capitalize on the strong midweek demand of the individual business traveler to the Financial District has been the focus during this period of strong growth in the market.
If the Hotel needs the event space during one of the dates previously reserved by the Foundation, the Hotel shall pay the Foundation $4,000 per day for using the event space. During the fiscal years ended June 30, 2024 and 2023, the Hotel paid the Foundation $8,000 and $20,000 for such fees, respectively.
If the Hotel needs the event space during one of the dates previously reserved by the Foundation, the Hotel shall pay the Foundation $4,000 per day for use of the event space. During the fiscal years ended June 30, 2025 and 2024, the Hotel paid the Foundation $15,000 and $8,000 for such fees, respectively.
SALES AND REFINANCING OF REAL ESTATE PROPERTIES On May 31, 2023, the Company refinanced its $4,823,000 mortgage note payable on its 264-unit apartment complex in St Louis, Missouri and obtained a new two-year mortgage for $5,360,000. The Company deposited the existing cash in escrow for Capital Expenditure Reserve of $616,000 and $244,000 in Additional Reserve for taxes and insurance.
The loan matures in January 2035. On May 31, 2023, the Company refinanced its $4,823,000 mortgage note payable on its 264-unit apartment complex in St. Louis, Missouri and obtained a new two-year mortgage for $5,360,000. The Company deposited the existing cash in escrow for Capital Expenditure Reserve of $616,000 and $244,000 in Additional Reserve for taxes and insurance.
The mortgage has a floating monthly rate of 30-day SOFR (capped at 5.5%) plus SOFR margin of 3.10% interest-only payments are due for the 12 months and $5,500 principal paydowns commencing in June 2024. The mortgage loan matures in May 2025.
The mortgage has a floating monthly rate of 30-day SOFR (capped at 5.5%) plus SOFR margin of 3.10%. interest-only payments were due for the first12 months, and $5,500 principal payments commencing in June 2024. The mortgage loan matured in May 2025.
For the fiscal years ended June 30, 2024 and 2023, hotel management fees were $706,000 and $711,000, and incentive fees of $0 and $505,000, respectively, offset by key money amortization of $250,000 for both years and are included in Hotel operating expenses in the consolidated statements of operations.
For the fiscal years ended June 30, 2025 and 2024, hotel management fees were $783,000 and $706,000, respectively, and incentive fees were $0 in both periods, offset by key money amortization of $250,000 for both years, and such amounts are included in Hotel operating expenses in the consolidated statements of operations.
Among other requirements, the Lease was a condition imposed by the City of San Francisco upon Justice, in order to convey the real estate where the Hotel would be built. On March 15, 2005, the Hotel and the Foundation entered an amended lease.
Among other requirements, the Lease was a condition imposed by the City of San Francisco upon Justice in connection with the conveyance of the real estate on which the Hotel would be built. On March 15, 2005, the Hotel and the Foundation entered an amended lease.
As of June 30, 2024, InterGroup owns approximately 75.7% of the outstanding common shares of Portsmouth. As of June 30, 2024, the Company’s President, Chairman of the Board and Chief Executive Officer, John Winfield, owns approximately 2.5% of the outstanding common shares of Portsmouth. Mr. Winfield also serves as the Chairman of the Board and Chief Executive Officer of Portsmouth.
As of June 30, 2025, InterGroup owns approximately 75.9% of the outstanding common shares of Portsmouth. As of June 30, 2025, the Company’s President, Chairman of the Board, and Chief Executive Officer, John V. Winfield, owns approximately 2.5% of the outstanding common shares of Portsmouth. Mr.
CBA for Local 2 (Hotel and Restaurant Employees) expired on August 13, 2024, and is currently under negotiations. CBA for Local 856 (International Brotherhood of Teamsters) will expire on December 31, 2024. CBA for Local 39 (Stationary Engineers) will expire in July 2030.
CBA for Local 2 (Hotel and Restaurant Employees) will expire on August 13, 2028, and is subject to future negotiations. CBA for Local 856 (International Brotherhood of Teamsters) will expire on December 31, 2028. CBA for Local 39 (Stationary Engineers) will expire in July 2030.
The Commission also maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. Other information about the Company can be found on its website www.intergroupcorporation.com .
The SEC no longer operates a public reference room. The Commission also maintains an Internet site at https://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. Other information about the Company can be found on its website www.intgla.com .
The Company changed its form from a REIT to a corporation so that it could pursue a variety of investments beyond real estate and broaden its social impact to engage in any opportunity which would offer the potential to increase shareholder value within the Company’s underlying commitment to social responsibility.
The Company changed its form from a REIT to a corporation so that it could pursue a variety of investments beyond real estate and broaden its social impact by pursuing opportunities with the potential to increase shareholder value, consistent with the Company’s underlying commitment to social responsibility.
While the CompSet has lost over 15% RevPAR; in these two months, the Hotel has grown over 15% in this metric. The Hotel’s location in the San Francisco Financial District historically had provided greater opportunities over its competitors when it comes to developing relationships with the Financial District entities and the customers who regularly do business in the downtown area.
The Hotel’s location in the San Francisco Financial District historically has provided greater opportunities over its competitors when it comes to developing relationships with the Financial District entities and the customers who regularly do business in the downtown area.
The mortgage loan matures in November 2031. 6 MARKETABLE SECURITIES INVESTMENT POLICIES In addition to its Hotel and real estate operations, the Company also invests from time to time in income producing instruments, corporate debt and equity securities, publicly traded investment funds, mortgage-backed securities, securities issued by REITs and other companies which invest primarily in real estate.
In May 2025 the Company amended the agreement for a new loan maturity of June 5, 2028. 5 MARKETABLE SECURITIES INVESTMENT POLICIES In addition to its Hotel and real estate operations, the Company also invests from time to time in income producing instruments, corporate debt and equity securities, publicly traded investment funds, mortgage-backed securities, securities issued by REITs and other companies which invest primarily in real estate.
As part of the Hotel management agreement, Aimbridge, through the Company’s wholly owned subsidiary, Kearny Street Parking LLC, manages the parking garage in-house. 5 CHINESE CULTURE FOUNDATION LEASE In November 1967, Justice entered into a 50-year nominal rent lease (the “Lease”) with the Chinese Culture Foundation of San Francisco (the “Foundation”) for the third-floor space of the Hotel commonly known as the Chinese Culture Center, which the Foundation had the right to occupy pursuant to the Lease.
CHINESE CULTURE FOUNDATION LEASE In November 1967, Justice entered into a 50-year nominal rent lease (the “Lease”) with the Chinese Culture Foundation of San Francisco (the “Foundation”) for the third-floor space of the Hotel commonly known as the Chinese Culture Center, which the Foundation had the right to occupy pursuant to the Lease.
The Company’s Chief Operating Officer, David Gonzalez was elected President of Portsmouth in May 2021. Portsmouth’s primary business was conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”). Portsmouth received management fees as a general partner of Justice for its services in overseeing and managing the Partnership’s assets.
Winfield also serves as the Chairman of the Board and Chief Executive Officer of Portsmouth. The Company’s Chief Operating Officer, David Gonzalez, was elected President of Portsmouth in May 2021. Portsmouth’s primary business has historically been conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”).
The Company may also invest, with the approval of the Committee, in unlisted securities, such as convertible notes, through private placements including private equity investment funds. Those investments in non-marketable securities are carried at cost on the Company’s consolidated balance sheets as part of Other Assets, net and reviewed for impairment on a periodic basis.
Those investments in non-marketable securities are carried at cost on the Company’s consolidated balance sheets as part of Other Assets, net, and reviewed for impairment on a periodic basis. As part of its investment strategies, the Company may assume short positions in marketable securities.
Those fees were eliminated in consolidation. Effective July 15, 2021, Portsmouth completed the purchase of 100% of the limited partnership interest of Justice through the acquisition of the remaining 0.7% non-controlling interest. 4 Effective December 23, 2021, the partnership was dissolved. The financial statements of Justice were consolidated with those of the Company.
Portsmouth received management fees as a general partner of Justice for its services in overseeing and managing the Partnership’s assets. Those fees were eliminated in consolidation. Effective July 15, 2021, Portsmouth completed the purchase of 100% of the limited partnership interest of Justice through the acquisition of the remaining 0.7% non-controlling interest. Effective December 23, 2021, the Partnership was dissolved.
As part of its investment strategies, the Company may assume short positions in marketable securities. Short sales are used by the Company to potentially offset normal market risks undertaken in the course of its investing activities or to provide additional return opportunities.
Short sales are used by the Company to potentially offset normal market risks undertaken in the course of its investing activities or to provide additional return opportunities. As of June 30, 2025 and 2024, the Company had obligations for securities sold short (equities short) of $0 and $188,000, respectively.
ADDITIONAL INFORMATION The Company files required annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K and other information with the Securities and Exchange Commission (“SEC” or the “Commission”).
Changes in labor laws, union negotiations, or work stoppages could materially impact hotel operations and cost structures, as discussed in Item 1A – Risk Factors. ADDITIONAL INFORMATION The Company files required annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K and other information with the Securities and Exchange Commission (“SEC” or the “Commission”).
The use of leverage could be viewed as risky, and the market values of the portfolio may be subject to large fluctuations. Margin balances due as of June 30, 2024 and 2023 were $0 and $1,601,000, respectively. 7 As Chairman of the Executive Strategic Real Estate and Securities Investment Committee, the Company’s President and Chief Executive Officer (CEO), John V.
Margin balances due as of June 30, 2025 and 2024 were $0 for both years. The use of margin or other forms of leverage increases exposure to market volatility and could magnify losses. As Chairman of the Executive Strategic Real Estate and Securities Investment Committee, the Company’s President and Chief Executive Officer (CEO), John V.
As of June 30, 2024 and 2023, the Company had obligations for securities sold (equities short) of $188,000 and $1,416,000, respectively. The Company may utilize margin for its marketable securities purchases through the use of standard margin agreements with national brokerage firms. The margin used by the Company may fluctuate depending on market conditions.
The Company may utilize margin for its marketable securities purchases through the use of standard margin agreements with national brokerage firms. The margin used by the Company may fluctuate depending on market conditions. The use of leverage could be viewed as risky, and the market values of the portfolio may be subject to large fluctuations.
The hotel recently received its annual Quality Assurance inspection from Hilton and received the highest score at least in the hotel’s last decade at 94.45% which is an “Outstanding” ranking by Hilton. Even during the renovation that took out between 2-4 floors or 50-100 guest rooms of inventory at a time, the Hotel maintained an index of over 100%.
The Hotel recently received its annual Quality Assurance inspection from Hilton and received the highest score in at least the last decade at 96.7%, which is an “Outstanding” ranking by Hilton. During the fiscal year ended June 30, 2025, the Hotel’s CompSet achieved a RevPAR of $172.84 while the Hotel had a RevPAR of $214.66.
Since the completion of the renovation, the Hotel has increased its lead in RevPAR on the CompSet dramatically. In the two months since completing the renovation, the Hotel has achieved an average RevPAR index of over 150% for both months.
Since the completion of the renovation in June 2024, the Hotel has increased its lead in RevPAR on the CompSet dramatically, growing RevPAR 23% while the CompSet declined by 8.3% over the same time.
The Hotel is a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (“Hilton”) through January 31, 2030. In addition to the operations of the Hotel, the Company also generates income from the ownership, management and, when appropriate, sale of real estate.
The Hotel is a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (“Hilton”) through January 31, 2030. The franchise agreement requires the hotel to meet certain brand standards and capital improvement requirements, noncompliance with which could have an adverse impact on operations, as discussed in Item 1A – Risk Factors.
The shift to attracting leisure travel has pushed the Hotel to price aggressively to lure competition from the more tourist locations in the city. We are optimistic to see business travel and self-contained groups trending positively. 8 The Hotel is also subject to certain operating risks common to all of the hotel industry, which could adversely impact performance.
The city is seeing the return of a stronger convention calendar along with business travel trending positively. 6 The Hotel is also subject to certain operating risks common to all of the hotel industry, which could adversely impact performance, including those set forth in Item 1A- Risk Factors.
Removed
However, the Company is currently in discussions with Aimbridge regarding a dispute in connection with the validity of the incentive fees as they relate directly to the Covid pandemic.
Added
The financial statements of Justice were consolidated with those of the Company.
Removed
On December 15, 2023, the Company obtained a second mortgage note payable in the amount of $4,573,000 on its 358-unit apartment complex in Las Colinas, Texas. The term of the loan is approximately 7 years with an interest rate of 7.60%.
Added
In connection with the refinancing of the Hotel on March 28, 2025, the Company formed Justice Pledgor, LLC, a Delaware limited liability company (“Pledgor”), which became the sole member of Operating. Mezzanine is the sole member of Pledgor.
Removed
With newly renovated rooms in its Competitive Set of hotels (“CompSet”) and will allow the hotel to continue to drive rate and grow RevPAR over the market and its CompSet.
Added
The refinancing transaction resulted in an increase in Portsmouth’s leverage of approximately $1 million and subjects us to additional covenants and payment obligations, which are described in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Removed
At the end of the renovation in June 2024, the Hotel’s trailing 12-month index was 109.6%. During the fiscal year ending June 30, 2024, the Hotel’s CompSet achieved a RevPAR of $161.47 while the Hotel had a RevPAR of $176.99. An excellent achievement for our property while it had roughly 13%-18% of its inventory unavailable over this time period.
Added
The Hotel’s senior mortgage and amended mezzanine loans are obligations of Portsmouth’s subsidiaries and are secured at the Hotel-subsidiary level; they are not primary obligations of InterGroup.
Removed
The public may read and copy any materials that we file with the Commission at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, on official business days during the hours of 10:00 a.m. to 3:00 p.m. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.
Added
As part of the March 28, 2025 closing, prior guaranties tied to the 2013/2017 facilities were terminated and replaced by limited “carve-out/springing recourse” guaranties executed by Portsmouth and InterGroup as described in Note 10. 4 In addition to the operations of the Hotel, the Company also generates income from the ownership, management and, when appropriate, sale of real estate.
Added
The License Agreement requires the hotel to maintain specific brand standards and periodic renovations, noncompliance with which could result in penalties, termination of the agreement, or loss of the Hilton brand, as discussed in Item 1A – Risk Factors.
Added
However, following discussions with Aimbridge regarding the impact of the COVID-19 pandemic on incentive fee eligibility, the parties agreed that no incentive fees were payable for fiscal years 2019 through 2023.
Added
Specifically, Aimbridge agreed to waive $1,030,134 in previously recorded incentive fees, and both parties established a performance threshold for future incentive fee eligibility of $15,257,301 in earnings before interest, taxes, depreciation, and amortization (“EBITDA”), equal to, the EBITDA in 2017 when Aimbridge began managing the Hotel.
Added
As a result, the Company recorded a reduction in Hotel operating expenses of $1,030,134 for the year ended June 30, 2025. As part of the Hotel management agreement, Aimbridge, through the Company’s wholly owned subsidiary, Kearny Street Parking LLC, manages the parking garage in-house.
Added
The loss or replacement of the hotel management company, or a failure by Aimbridge to meet performance benchmarks, could have a material adverse impact on hotel operations, as discussed in Item 1A – Risk Factors.
Added
The terms of this lease, including the reserved use provisions, could limit flexibility for certain hotel functions or events. SALES AND REFINANCING OF REAL ESTATE PROPERTIES In December 2024, the Company refinanced the mortgage on its 157-unit apartment located in Florence, Kentucky in the amount of $9,800,000. The new 10-year interest-only loan has an interest rate of 5.40%.
Added
Changes in market conditions, interest rates, or liquidity could negatively impact the value or performance of these investments, as discussed in Item 1A – Risk Factors. The Company may also invest, with the approval of the Committee, in unlisted securities, such as convertible notes, through private placements including private equity investment funds.
Added
Transactions or investments involving related parties are subject to the Company’s related-party transaction policies and applicable Securities and Exchange Commission disclosure requirements, including Regulation S-K Item 404.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information regarding the effects on our results of operations. Climate variability or extreme weather events could alter historical seasonal trends and impact occupancy and room rates, as discussed in Item 1A – Risk Factors.
Added
Other factors such as cybersecurity incidents impacting travel infrastructure, extreme weather events linked to climate change, or public health crises could also disrupt travel patterns and negatively affect hotel performance, as discussed in Item 1A- Risk Factors.
Added
Future changes in environmental laws, or the discovery of previously unknown contamination, could result in significant costs or liabilities.
Added
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports available free of charge on our website as soon as reasonably practicable after such materials are filed with or furnished to the SEC. 8

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+28 added−7 removed38 unchanged
Biggest changeThe macro-economic situation of a looming US/Global recession has seen business reducing or eliminating typical travel and group meetings in efforts to be conservative in uncertain financial times. Leisure travel and other leisure activities represent discretionary expenditures, and participation in such activities tends to decline during economic downturns, during which consumers generally have less disposable income.
Biggest changeLeisure travel and other leisure activities represent discretionary expenditures, and participation in such activities tends to decline during economic downturns, during which consumers generally have less disposable income. As a result, customer demand for the amenities and leisure activities that we offer may decline during such periods.
The market price of the Company’s common stock may fluctuate significantly from time to time as a result of many factors, including: investors’ perceptions of the Company and its prospects; investors’ perceptions of the Company’s and/or the industry’s risk and return characteristics relative to other investment alternatives; difficulties between actual financial and operating results and those expected by investors and analysts; changes in our capital structure; trading volume fluctuations; actual or anticipated fluctuations in quarterly financial and operational results; volatility in the equity securities market; and sales, or anticipated sales, of large blocks of the Company’s common stock.
The market price of the Company’s common stock may fluctuate significantly from time to time as a result of many factors, including: investors’ perceptions of the Company and its prospects; investors’ perceptions of the Company’s and/or the industry’s risk and return characteristics relative to other investment alternatives; differences between actual financial and operating results and those expected by investors and analysts; changes in our capital structure; trading volume fluctuations; actual or anticipated fluctuations in quarterly financial and operational results; volatility in the equity securities market; and sales, or anticipated sales, of large blocks of the Company’s common stock.
If this were to occur, or if we were unable to obtain adequate insurance and the Hotel experienced damage which would otherwise have been covered by insurance, it could materially adversely affect our financial condition and the operations of the Hotel. 14 In addition, insurance coverage for the Hotel and for casualty losses does not customarily cover damages that are characterized as punitive or similar damages.
If this were to occur, or if we were unable to obtain adequate insurance and the Hotel experienced damage which would otherwise have been covered by insurance, it could materially adversely affect our financial condition and the operations of the Hotel. 12 In addition, insurance coverage for the Hotel and for casualty losses does not customarily cover damages that are characterized as punitive or similar damages.
If our revenues decline and we are unable to reduce our expenses in a timely manner, our business and results of operations could be adversely affected. 12 Risk of declining market values in marketable securities. The Company invests from time to time in marketable securities. As a result, the Company is exposed to market volatility in connection with these investments.
If our revenues decline and we are unable to reduce our expenses in a timely manner, our business and results of operations could be adversely affected. 10 Risk of declining market values in marketable securities. The Company invests from time to time in marketable securities. As a result, the Company is exposed to market volatility in connection with these investments.
Seasonality and other related factors such as weather can be expected to cause quarterly fluctuations in revenue at the Hotel. The hotel and resort industry are seasonal in nature. This seasonality can tend to cause quarterly fluctuations in revenues at the Hotel.
Seasonality and other related factors such as weather can be expected to cause quarterly fluctuations in revenue at the Hotel. The hotel and resort industry is seasonal in nature. This seasonality can tend to cause quarterly fluctuations in revenues at the Hotel.
Furthermore, compliance costs associated with such laws, regulations and licenses are significant. Any change in the laws, regulations or licenses applicable to our business or a violation of any current or future laws or regulations applicable to our business or gaming license could require us to make substantial expenditures or could otherwise negatively affect our gaming operations.
Furthermore, compliance costs associated with such laws, regulations and licenses are significant. Any change in the laws, regulations or licenses applicable to our business or a violation of any current or future laws or regulations applicable to our business could require us to make substantial expenditures or could otherwise negatively affect the hotel’s operations.
The concentrated beneficial ownership of our common stock and the ability it affords to control our business may limit or eliminate other shareholders’ ability to influence corporate affairs . The Company’s President, Chief Executive Officer, and Chairman of the Board of Directors, John V. Winfield is a 69.4% beneficial shareholder of the Company. Because of this concentrated stock ownership, Mr.
The concentrated beneficial ownership of our common stock and the ability it affords to control our business may limit or eliminate other shareholders’ ability to influence corporate affairs . The Company’s President, Chief Executive Officer, and Chairman of the Board of Directors, John V. Winfield is a 70.1% beneficial shareholder of the Company. Because of this concentrated stock ownership, Mr.
These conditions affect discretionary and leisure spending and could adversely affect our customers’ ability or willingness to travel to destinations for leisure and cutback on discretionary business travel, which could adversely affect our operating results.
These conditions affect discretionary and leisure spending and could adversely affect our customers’ ability or willingness to travel to destinations for leisure and cut back on discretionary business travel, which could adversely affect our operating results.
Item 1A. Risk Factors. Adverse changes in the U.S. and global economies could negatively impact our financial performance. Due to a number of factors affecting consumers, the outlook for the lodging industry remains uncertain.
Item 1A. Risk Factors. Adverse changes in the U.S. and global economies could adversely affect our financial performance. Due to a number of factors affecting consumers, the outlook for the lodging industry remains uncertain.
The threat of terrorism has caused, and may in the future cause, a significant decrease in customer visits to San Francisco due to disruptions in commercial and leisure travel patterns and concerns about travel safety.
The threat of terrorism could adversely affect the number of customer visits to the Hotel . The threat of terrorism has caused, and may in the future cause, a significant decrease in customer visits to San Francisco due to disruptions in commercial and leisure travel patterns and concerns about travel safety.
As a result, any claims or legal proceedings, or settlement of any such claims or legal proceedings that result in damages that are characterized as punitive or similar damages may not be covered by our insurance. If these types of damages are substantial, our financial resources may be adversely affected. You may lose all or part of your investment.
As a result, any claims or legal proceedings, or settlement of any such claims or legal proceedings that result in damages that are characterized as punitive or similar damages may not be covered by our insurance. If these types of damages are substantial, our financial resources may be adversely affected.
According to current economic news reports, the United States and other key international economies may be subject to a recession, characterized by falling demand for a variety of goods and services, restricted credit, going concern threats to financial institutions, major multinational companies and medium and small businesses, poor liquidity, declining asset values, reduced corporate profitability, and volatility in credit, equity and foreign exchange markets.
According to current economic news reports, the United States and other key international economies may enter into a recession or experience prolonged periods of slow growth, characterized by falling demand for a variety of goods and services, restricted credit, going concern threats to financial institutions, major multinational companies and medium and small businesses, poor liquidity, declining asset values, reduced corporate profitability, and volatility in credit, equity and foreign exchange markets.
In the future, our property may be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses, which could reduce our cash flow and adversely affect our financial performance.
Limited insurance options or higher costs could pressure our operating margins and cash flows. In the future, our property may be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses, which could reduce our cash flow and adversely affect our financial performance.
Our failure to successfully defend or settle any litigation or legal proceedings could result in liabilities that, to the extent not covered by our insurance, could have a material adverse effect on our financial condition, revenue and profitability. The threat of terrorism could adversely affect the number of customer visits to the Hotel .
Our failure to successfully defend or settle any litigation or legal proceedings could result in liabilities that, to the extent not covered by our insurance, could have a material adverse effect on our financial condition, revenue and profitability.
We are a party, from time to time, to various litigation claims and legal proceedings, government and regulatory inquiries and/or proceedings, including, but not limited to, intellectual property, premises liability and breach of contract claims.
Litigation and legal proceedings could expose us to significant liabilities and thus negatively affect our financial results. We are a party, from time to time, to various litigation claims and legal proceedings, government and regulatory inquiries and/or proceedings, including, but not limited to, intellectual property, premises liability and breach of contract claims.
These factors have resulted at times in the past and could continue to result in the future in fewer customers visiting, or customers spending less, in San Francisco, as compared to prior periods.
These factors have, at times, resulted in fewer customers visiting San Francisco or in reduced customer spending as compared to prior periods, and may do so again.
If we are unable to compete effectively, we could lose market share, which could adversely affect our business and results of operations. 11 The San Francisco hotel and resort industry is capital intensive; financing our renovations and future capital improvements could reduce our cash flow and adversely affect our financial performance.
If we fail to respond effectively to changes in market conditions, customer preferences, or competitor strategies – including pricing actions, loyalty programs, and digital marketing initiatives, we could lose market share, which could adversely affect our business, revenues, and results of operations. 9 The San Francisco hotel and resort industry is capital intensive; financing our renovations and future capital improvements could reduce our cash flow and adversely affect our financial performance.
Thus, the holder is limited to return on investment from any income producing feature of the instrument, as any sale of such an instrument would be subject to a substantial discount.
Nonmarketable securities are, by definition, instruments that are not readily salable in the capital markets, and when sold are usually at a substantial discount. Thus, the holder is limited to return on investment from any income producing feature of the instrument, as any sale of such an instrument would be subject to a substantial discount.
As a result, in those times customer demand for the luxury amenities and leisure activities that we offer may decline. Furthermore, during periods of economic contraction, revenues may decrease while some of our costs remain fixed or even increase, resulting in decreased earnings. Weakened global economic conditions may adversely affect our industry, business, and results of operations.
Furthermore, during periods of economic contraction, revenues may decrease while some of our costs remain fixed or even increase, resulting in decreased earnings. Weakened global economic conditions may adversely affect our industry, business, and results of operations. Our overall performance depends in part on worldwide economic conditions, which could adversely affect the tourism industry.
In addition, in a weakened economy, companies that have competing properties may reduce room rates and other prices which could also reduce our average revenues and harm our operating results. We operate a single property located in San Francisco and rely on the San Francisco market.
In addition, in a weakened economy, companies that have competing properties may reduce room rates and other prices which could also reduce our average revenues and harm our operating results. Exposure to the San Francisco market through our majority-owned subsidiary could adversely affect our consolidated results, cash flows and financial condition. Through our majority-owned subsidiary, Portsmouth Square, Inc.
As a result, we may have to enter into short-term borrowings in certain quarters in order to offset these quarterly fluctuations in our revenues. 13 The hotel industry is heavily regulated and failure to comply with extensive regulatory requirements may result in an adverse effect on our business.
As a result, we may have to enter into short-term borrowings in certain quarters in order to offset these quarterly fluctuations in our revenues.
If we do not obtain adequate insurance, to the extent that any of the events not covered by an insurance policy materialize, our financial condition may be materially adversely affected.
If we do not obtain adequate insurance, to the extent that any of the events not covered by an insurance policy materialize, our financial condition may be materially adversely affected. Further, factors such as climate change, extreme weather events, and increased litigation risk have contributed to rising insurance premiums and reduced coverage availability in certain markets, including California.
Our quarterly earnings may also be adversely affected by other related factors outside our control, including weather conditions and poor economic conditions.
Our quarterly earnings may also be adversely affected by other related factors outside our control, including weather conditions and poor economic conditions. Changes in climate patterns, including more frequent or severe weather events, could alter historical seasonal demand trends or disrupt travel plans.
As a result, renovations and any other future capital improvement projects may increase our expenses, reduce our cash flows and our revenues. If capital expenditures exceed our expectations, this excess would have an adverse effect on our available cash. We have substantial debt, and we may incur additional indebtedness, which may negatively affect our business and financial results.
As a result, renovations and any other future capital improvement projects may increase our expenses, reduce our cash flows and our revenues. If capital expenditures exceed our expectations, this excess would have an adverse effect on our available cash. Significant delays or cost overruns could also impact our ability to maintain competitive standards and customer satisfaction, potentially reducing revenues.
Any failure to comply with all such rules and regulations could subject us to fines or audits by the applicable taxation authority. Violations of laws could result in, among other things, disciplinary action. If we fail to comply with regulatory requirements, this may result in an adverse effect on our business.
Violations of laws could result in, among other things, disciplinary action. If we fail to comply with regulatory requirements, this may result in an adverse effect on our business. In addition, heightened regulatory scrutiny or enforcement actions could divert management’s attention and resources, impacting our financial performance.
There is no assurance that the Company’s initiatives to improve its profitability or liquidity and financial position will be successful. The price of the Company’s common stock may fluctuate significantly, which could negatively affect the Company and holders of its common stock.
You may lose all or part of your investment. There is no assurance that the Company’s initiatives to improve its profitability or liquidity and financial position will be successful. If we are unable to successfully implement our strategic initiatives, respond to changing market conditions, or address operational challenges, our business and financial performance could deteriorate.
The possibility of future attacks may hamper business and leisure travel patterns and, accordingly, the performance of our business and our operations.
The possibility of future attacks may hamper business and leisure travel patterns and, accordingly, the performance of our business and our operations. Moreover, other security-related risks – including cybersecurity threats impacting travel infrastructure, domestic or international civil unrest, and geopolitical tensions – could have similar adverse effects on travel demand and hotel occupancy levels.
Removed
Our overall performance depends in part on worldwide economic conditions, which could adversely affect the tourism industry.
Added
The current macroeconomic environment, including risks of a U.S. or global recession, has resulted in many businesses reducing or eliminating typical travel and group meetings as a conservative measure in times of financial uncertainty.
Removed
Changes adversely impacting this market could have a material effect on our business, financial condition, results of operations, and fair market value of the Hotel . Our business in San Francisco and the hospitality industry has a limited base of operations and substantially all of our revenues are currently generated by the Hotel in San Francisco, California.
Added
(“Portsmouth”), we own a single hotel property in San Francisco, California (the Hilton San Francisco Financial District). While InterGroup is not a single-asset company—we also own and operate a diversified portfolio of multifamily and commercial real estate and hold investment securities—the Hotel represents a significant component of our consolidated revenues and cash flows.
Removed
Accordingly, we are subject to greater risks than a more diversified hotel or resort operator and the profitability of our operations is linked to local economic conditions in San Francisco.
Added
As a result, adverse conditions in the San Francisco Bay Area—including local economic trends, business-travel and convention activity, competitive dynamics, public safety or municipal issues, natural disasters (including earthquakes), climate-related impacts, and public health events—could materially reduce Hotel operating results and, in turn, negatively impact our consolidated results of operations, liquidity, and cash flows.
Removed
The combination of a decline in the local economy of San Francisco, reliance on a single location and the significant investment associated with it may cause our operating results to fluctuate significantly and may adversely affect us and materially affect our total profitability.
Added
Prolonged weakness in the San Francisco market could also limit cash available at Portsmouth for debt service, required reserves, or capital expenditures, which may restrict upstream distributions to InterGroup and constrain our corporate capital allocation.
Removed
The debt agreements that govern our outstanding indebtedness due January 2025 could result in our being required to repay these borrowings on their due date. If we are forced to refinance these borrowings on less favorable terms or are unable to refinance these borrowings, the Hotel financial condition and results of operations could be adversely affected.
Added
Although our other real estate investments and securities provide diversification, they do not eliminate the concentration risk inherent in our Hotel segment’s reliance on a single urban market. See also “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 10 – Mortgage Notes Payable.
Removed
The Company’s financial position and financial performance could be adversely affected by worsening market conditions or sluggish performance of such investments. Illiquidity risk in nonmarketable securities. Nonmarketable securities are, by definition, instruments that are not readily salable in the capital markets, and when sold are usually at a substantial discount.
Added
In addition, labor shortages, supply chain disruptions, inflationary pressures on materials and services, and increased regulatory requirements related to environmental sustainability or climate-resilient construction could further escalate costs or extend project timelines.
Removed
Thus, a holder may need to hold such instruments for long period of time and not be able to realize a return of their cash investment should there be a need to liquidate to obtain cash at any given time. Litigation and legal proceedings could expose us to significant liabilities and thus negatively affect our financial results.
Added
We have substantial debt, and we may incur additional indebtedness, which may negatively affect our business and financial results. We have substantial debt service obligations.
Added
In addition, increases in interest rates, changes in credit market conditions, or a downgrade of our creditworthiness could increase our borrowing costs or limit our access to additional financing.
Added
If we are unable to refinance existing debt on acceptable terms or at all, we may need to reduce or delay capital expenditures, asset improvements, or strategic initiatives, which could negatively affect our competitive position and financial performance. Limited guaranties and “springing recourse” events under the Hotel financing could expose InterGroup or Portsmouth to liability.
Added
The Hotel’s senior mortgage and amended mezzanine loans are generally non-recourse to the borrower subsidiaries, except for customary non-recourse carve-outs (e.g., fraud, willful misconduct, misapplication of funds, certain prohibited transfers, and environmental indemnities) and specified “springing recourse” events. Portsmouth and InterGroup have provided limited guaranties of these recourse obligations.
Added
While no such events have occurred as of June 30, 2025, the occurrence of a defined recourse event could increase our exposure and have a material adverse effect on liquidity or financial condition.
Added
The Company’s financial position and financial performance could be adversely affected by worsening market conditions or sluggish performance of such investments. Factors such as interest rate fluctuations, geopolitical events, changes in credit ratings, and overall capital market volatility could also lead to unrealized or realized losses in our investment portfolio.
Added
In addition, a prolonged decline in market values could reduce our liquidity or our ability to meet certain financial covenants, and changes in fair value of equity securities are recognized in earnings, which can increase the volatility of our reported results. Illiquidity risk in nonmarketable securities.
Added
Thus, a holder may need to hold such instruments for a longer period of time and may be unable to liquidate the investment without incurring a substantial loss if cash is needed on short notice. This lack of liquidity could adversely affect our ability to respond to changing market conditions or to reallocate capital to other strategic opportunities.
Added
In addition, regulatory investigations or enforcement actions could result in fines, penalties, or other sanctions, some of which may not be covered by insurance. Any adverse publicity resulting from litigation or regulatory matters could also harm our brand reputation and customer relationships, further impacting revenues.
Added
In addition, the termination or non-renewal of our management agreement, changes in the terms of such agreement, or the failure of our management company to meet performance expectations could materially impact our operations. Lack of a robust succession plan for management personnel could also heighten our operations risk in the event of unexpected departures.
Added
If weather-related or climate-related events become more frequent or severe, the impact on occupancy and average daily rates could be greater than historical experience suggests. 11 The hotel industry is heavily regulated and failure to comply with extensive regulatory requirements may result in an adverse effect on our business.
Added
We are also subject to environmental, health, safety, accessibility, and privacy regulations, as well as increasing expectations for environmental, social, and governance (ESG) disclosures and performance. Failure to comply with any of these requirements, or changes in regulatory standards, could result in fines, penalties, litigation, or restrictions on our operations.
Added
Moreover, recent trends in the insurance market have resulted in reduced coverage availability and higher premiums for catastrophic risks, particularly in California. Climate change, extreme weather events, and geopolitical instability could further pressure insurance capacity and costs.
Added
We may also face gaps in coverage for newly emerging risks, such as pandemic-related business interruptions or cybersecurity-related losses, if insurers restrict or exclude such coverage in future policies. Cybersecurity risks could disrupt our operations and adversely affect our business, even though no material incidents have occurred.
Added
We rely on information technology systems, including those provided by third parties, to conduct our operations and maintain data integrity. A significant cybersecurity incident, such as a data breach, ransomware attack, or other network disruption, could adversely affect our operations, financial condition, and reputation.
Added
While we maintain cybersecurity risk management programs as described in Item 1C – Cybersecurity and did not experience any material cybersecurity incidents during the fiscal year ended June 30, 2025, there can be no assurance that future threats will not occur or that any such events would not have a material adverse impact.
Added
In addition, external factors – including economic downturns, competitive pressures, regulatory changes, and uninsured losses – could also lead to a decline in the value of your investment, including the possibility of a total loss. The price of the Company’s common stock may fluctuate significantly, which could negatively affect the Company and holders of its common stock.
Added
Other factors that could cause volatility include changes in macroeconomic conditions, interest rate movements, regulatory developments, geopolitical events, and reduced liquidity in our stock. Significant volatility in our stock price could also impact our ability to raise capital on favorable terms or at all.
Added
Furthermore, this concentration of ownership could delay or prevent a change in control that other shareholders may view as beneficial, and could reduce the marketability or liquidity of our common stock. Minority shareholders may have limited recourse to influence corporate decisions, including those relating to mergers, acquisitions, or other strategic transactions.
Added
Our financial statements do not reflect market values of our real estate; therefore, our book equity may understate (or overstate) the value realizable upon sale. GAAP requires us to carry real estate at historical cost less accumulated depreciation and impairment. We do not mark our properties to market.
Added
Consequently, our reported asset values and shareholders’ equity may differ significantly from amounts that could be realized in a current market sale. We have not obtained portfolio-wide third-party appraisals. Any monetization would be subject to market conditions, buyer demand, due diligence findings, transaction costs and taxes, and may result in proceeds that are materially lower (or higher) than carrying value.
Added
Many of the risk factors described above should be read in conjunction with the cautionary statement regarding forward-looking statements contained in Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the ‘Forward-looking Statements’ section of this Annual Report on Form 10-K. 13 Item 1B. Unresolved Staff Comments. None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+4 added−1 removed0 unchanged
Biggest changeItem 1C. Cybersecurity. The Company maintains cyber risk management designed to preserve the security of data and technology infrastructure. On annual basis we conduct assessments to identify cyber risks and have developed plans on how to address any such risks for remediation of vulnerabilities.
Biggest changeItem 1C. Cybersecurity. The Company maintains cybersecurity risk management programs designed to help protect the security of data and technology infrastructure. On an annual basis we conduct assessments to identify cyber risks and develop remediation plans to address identified vulnerabilities. Our program is designed to detect, mitigate, and respond to cybersecurity incidents in a timely manner.
Risk management and strategy We engage and implement risk management strategies for identification and management of material risks rising from cybersecurity threats and alerts. Our method involves a systematic evaluation of all potential threats reported and discovered, vulnerabilities, and their possible impacts on the Company’s operations, data, and systems health.
Risk management and strategy We engage and implement risk management strategies to identify, assess, and manage material risks arising from cybersecurity threats and alerts. Our method involves a systematic evaluation of all potential threats, vulnerabilities, and their possible impacts on the Company’s operations, data, and system integrity.
Our management team relies on our third-party providers on administrating cybersecurity assessments to identify, manage, mitigate, and respond to cybersecurity threats. Management updates the Board as necessary, regarding any significant cybersecurity occurrences.
Management and Board Oversight The Company’s management team is responsible for the oversight and administration of cybersecurity protocols. Our management team relies on our third-party providers to administer cybersecurity assessments to identify, manage, mitigate, and respond to cybersecurity threats. Management updates the Board on any significant cybersecurity occurrences.
Removed
Our cybersecurity risk management strategy includes: ● Identify the risk to our environment; ● IT to identify and resolve the threat; ● monthly cybersecurity training to our staff; and ● cybersecurity incident response plan. Management and Board Oversight Management team is responsible for the oversight and administration of cyber security protocols.
Added
Our cybersecurity risk management strategy includes: ● Identifying risks to our environment; ● Deploying Internal IT teams and third-party providers to investigate, contain, and resolve identified threats; ● Providing monthly cybersecurity awareness training to our staff; ● Maintenance and periodic testing of a cybersecurity incident response plan; ● Assessing and managing third-party and vendor cybersecurity risk, including contractual security requirements and periodic reviews; and ● Integrating cybersecurity risk considerations into our enterprise risk management processes.
Added
We also engage external cybersecurity consultants and use industry-standard tools to help monitor our networks, review vulnerability scans, and conduct penetration testing on a periodic basis. Our risk management practices are integrated into our overall enterprise risk management framework, as discussed in Item 1A – Risk Factors.
Added
The Board receives periodic briefings on cybersecurity risks, incidents, and risk mitigation measures, and reviews management’s cybersecurity policies and response plans at least annually.
Added
Cybersecurity Incidents During the fiscal year ended June 30, 2025, the Company did not identify any cybersecurity incidents that had a material impact on our business strategy, results of operations, or financial condition, and no incidents were determined to be material individually or in the aggregate.

Item 2. Properties

Properties — owned and leased real estate

61 edited+30 added−31 removed5 unchanged
Biggest changeThe twelfth Los Angeles apartment complex is a 4,093 square foot apartment with 4 units. In an all-cash transaction, the Company acquired the property on May 14, 2021 at an initial cost of approximately $2,600,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
Biggest changeDepreciation is recorded on the straight-line method, based upon an estimated useful life of 27.5 years. The outstanding mortgage balance was approximately $2,326,000 as of June 30, 2025 with a fixed interest rate of 3.09% per annum and the maturity date is July 1, 2030. The twelfth Los Angeles apartment complex is a 4,093 square foot apartment with 4 units.
The Hotel has approximately 22,000 square feet of meeting room space, including the grand ballroom. Other features of the Hotel include a 5-level underground parking garage and pedestrian bridge across Kearny Street connecting the Hotel and the CCC with Portsmouth Square Park in Chinatown.
The Hotel has approximately 22,000 square feet of meeting room space, including the grand ballroom. Other features of the Hotel include a 5-level underground parking garage and a pedestrian bridge across Kearny Street connecting the Hotel and the CCC with Portsmouth Square Park in Chinatown.
Chinatown is directly across the bridge that runs from the Hotel to Portsmouth Square Park. The Hotel is a 31-story (including parking garage), steel and concrete, A-frame building, built in 1970. The Hotel has 544 well-appointed guest rooms and luxury suites situated on 22 floors.
Chinatown is directly across the bridge that runs from the Hotel to Portsmouth Square Park. The Hotel is a 31-story (including parking garage), steel and concrete, A-frame building, built in 1970. The Hotel has 544 well-appointed guest rooms and suites situated on 22 floors.
Louis property is a two-story project with 264 units on approximately 17.5 acres. The Company acquired the complex on November 1, 1968 at an initial cost of $2,328,000. For the year ended June 30, 2024, real estate property taxes were approximately $150,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
Louis property is a two-story project with 264 units on approximately 17.5 acres. The Company acquired the complex on November 1, 1968 at an initial cost of $2,328,000. For the year ended June 30, 2024, real estate property taxes were approximately $147,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on November 10, 1999 at an initial cost of approximately $1,675,000. For the year ended June 30, 2023, real estate property taxes were approximately $32,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on November 10, 1999 at an initial cost of approximately $1,675,000. For the year ended June 30, 2025, real estate property taxes were approximately $32,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on July 30, 1999 at an initial cost of approximately $1,305,000. For the year ended June 30, 2024, real estate property taxes were approximately $25,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on July 30, 1999 at an initial cost of approximately $1,305,000. For the year ended June 30, 2025, real estate property taxes were approximately $25,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%. The maturity date of the new mortgage is August 1, 2051. The eighth Los Angeles apartment complex is a 7,500 square foot apartment with 7 units.
Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%. The maturity date is August 1, 2051. The eighth Los Angeles apartment complex is a 7,500 square foot apartment with 7 units.
The economic occupancy (gross potential less rent below market, vacancy loss, bad debt, discounts and concessions divided by gross potential rent) and the physical occupancy (gross potential rent less vacancy loss divided by gross potential rent) for each of the Company’s operating properties for fiscal year ended June 30, 2024 are provided below. Property Economic Occupancy Physical Occupancy 1.
The economic occupancy (gross potential less rent below market, vacancy loss, bad debt, discounts and concessions divided by gross potential rent) and the physical occupancy (gross potential rent less vacancy loss divided by gross potential rent) for each of the Company’s operating properties for fiscal year ended June 30, 2025 are provided below. Property Economic Occupancy Physical Occupancy 1.
The Las Colinas property is a waterfront apartment community along Beaver Creek that was developed in 1993 with 358 units on approximately 15.6 acres of land. The Company acquired the complex on April 30, 2004 for approximately $27,145,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 27.5 years.
Description of Properties Las Colinas, Texas. The Las Colinas property is a waterfront apartment community along Beaver Creek that was developed in 1993 with 358 units on approximately 15.6 acres of land. The Company acquired the complex on April 30, 2004 for approximately $27,145,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 27.5 years.
Property taxes for the year ended June 30, 2024 were approximately $34,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. As of June 30, 2024, this property was not encumbered by a mortgage. The first Los Angeles apartment complex is a 10,600 square foot two-story apartment with 12 units.
Property taxes for the year ended June 30, 2025 were approximately $35,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. As of June 30, 2025, this property was not encumbered by a mortgage. The first Los Angeles apartment complex is a 10,600 square foot two-story apartment with 12 units.
The Company owns one commercial property, twelve apartment complexes, and three single-family houses in the general area of County of Los Angeles, California (“Los Angeles”).
The Company owns one commercial property, twelve apartment complexes, and three single-family houses in the general area of Los Angeles County, California (“Los Angeles County”).
Real estate property taxes for the year ended June 30, 2024 were approximately $1,083,000. In October 2021, the Company refinanced its 3.73% existing $15,900,000 mortgage note payable on the property and generated net proceeds of $12,938,000. The outstanding mortgage balance was $28,800,000 as of June 30, 2024.
Real estate property taxes for the year ended June 30, 2025 were approximately $1,190,000. In October 2021, the Company refinanced its 3.73% existing $15,900,000 mortgage note payable on the property and generated net proceeds of $12,938,000. The outstanding mortgage balance was $28,800,000 as of June 30, 2025.
The seventh Los Angeles apartment complex is a 4,500 square foot two-story apartment with 4 units. The Company acquired the property on July 28, 2000 at an initial cost of approximately $1,005,000. For the year ended June 30, 2024, real estate property taxes were approximately $19,000.
The seventh Los Angeles apartment complex is a 4,500 square foot two-story apartment with 4 units. The Company acquired the property on July 28, 2000 at an initial cost of approximately $1,005,000. For the year ended June 30, 2025, real estate property taxes were approximately $18,000.
In April 2020, the Company refinanced its 3.51% and 4.51% existing $8,737,000 and $2,512,000 mortgages and generated net proceeds of $6,814,000. The outstanding mortgage balance was approximately $16,807,000 at June 30, 2024 with a fixed interest rate of 3.17% per annum and the maturity date of the new mortgage is May 1, 2030. 18 St. Louis, Missouri. The St.
In April 2020, the Company refinanced its 3.51% and 4.51% existing $8,737,000 and $2,512,000 mortgages and generated net proceeds of $6,814,000. The outstanding mortgage balance was approximately $16,392,000 at June 30, 2025 with a fixed interest rate of 3.17% per annum and the maturity date of the new mortgage is May 1, 2030. 16 St. Louis, Missouri. The St.
The Company acquired the complex on September 15, 1967 at an initial cost of approximately $1,600,000. Real estate property taxes for the year ended June 30, 2024 were approximately $290,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the complex on September 15, 1967 at an initial cost of approximately $1,600,000. Real estate property taxes for the year ended June 30, 2025 were approximately $295,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Florence property is a three-story apartment complex with 157 units on approximately 6.0 acres. The Company acquired the property on December 20, 1972 at an initial cost of approximately $1,995,000. For the year ended June 30, 2024, real estate property taxes were approximately $64,000.
The Florence property is a three-story apartment complex with 157 units on approximately 6.0 acres. The Company acquired the property on December 20, 1972 at an initial cost of approximately $1,995,000. For the year ended June 30, 2025, real estate property taxes were approximately $62,000.
The Company acquired the property on August 9, 2000 at an initial cost of approximately $1,308,000. For the year ended June 30, 2024, real estate property taxes were approximately $24,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on August 9, 2000 at an initial cost of approximately $1,308,000. For the year ended June 30, 2025, real estate property taxes were approximately $25,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
Los Angeles, CA (15) 67 % 50 % The Company’s Los Angeles, California properties are subject to various rent control laws, ordinances and regulations which impact the Company’s ability to adjust and achieve higher rental rates.
Los Angeles, CA (15) 100 % 100 % The Company’s Los Angeles, California properties are subject to various rent control laws, ordinances and regulations which impact the Company’s ability to adjust and achieve higher rental rates.
The outstanding new mortgage balance was approximately $867,000 as of June 30, 2024 with a five-year fixed interest rate of 3.5% per annum adjustable rate thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
The outstanding mortgage balance was approximately $847,000 as of June 30, 2025 with a five-year fixed interest rate of 3.5% per annum and an adjustable rate thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
The outstanding new mortgage balance was approximately $2,585,000 at June 30, 2024 with a fixed interest rate of 3.05% per annum and the maturity date of the new mortgage is February 1, 2031. 19 The third Los Angeles apartment complex is a 10,500 square foot apartment with 9 units.
The outstanding mortgage balance was approximately $2,522,000 at June 30, 2025 with a fixed interest rate of 3.05% per annum and the maturity date of the mortgage is February 1, 2031. 17 The third Los Angeles apartment complex is a 10,500 square foot apartment with 9 units.
The outstanding new mortgage balance was approximately $1,088,000 at June 30, 2024 with a five-year fixed interest rate of 3.5% per annum and adjustable rate thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
The outstanding mortgage balance was approximately $511,000 as of June 30, 2025, with a five-year fixed interest rate of 3.5% per annum and an adjustable rate thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
The Hotel has a restaurant, a lounge, and a private dining room on 3,700 square feet; additionally, there are two kitchens to service the restaurant and banquets and a fully equipped gym. The third floor houses the Chinese Culture Center (the “CCC”), its administrative office, and a grand ballroom.
The Hotel has a restaurant, a lounge, and a private dining room totaling approximately 3,700 square feet; additionally, there are two kitchens that service both restaurant and banquet operations, and a fully equipped gym. The third floor houses the Chinese Culture Center (the “CCC”), its administrative office, and a grand ballroom.
Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. The outstanding mortgage balance was approximately $2,834,000 as of June 30, 2024 with a fixed interest rate of 3.875% per annum and the maturity date of the mortgage is April 1, 2025. Los Angeles, California.
Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. The outstanding mortgage balance was approximately $1,064,000 as of June 30, 2025 with a fixed interest rate of 3.50% per annum and the maturity date is July 1, 2051.
The Company acquired the property on May 1, 2001 at an initial cost of approximately $1,206,000. For the year ended June 30, 2024, real estate property taxes were approximately $22,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on May 26, 2000 at an initial cost of approximately $7,500,000. For the year ended June 30, 2025, real estate property taxes were approximately $131,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
As required by its senior lender, Operating will continue to make minimum payments into its furniture, fixtures, and equipment (“FF&E”) escrow account held by its senior lender of the greatest of 4% of annual revenues or a minimum of $1,952,000 per annum.
As required by its senior lender, Operating will continue to make minimum payments into its furniture, fixtures, and equipment (“FF&E”) escrow account held by its senior lender in an amount equal to the greater of four percent (4%) of annual revenues or a minimum of $1,952,000 per annum, as adjusted under the loan agreement.
On May 31, 2023, the Company refinanced its $4,823,000 mortgage with a new two-year $5,360,000 mortgage. Interest-only payments are due monthly and commencing on June 10, 2024, the Company will be required to make equal monthly principal installments of $5,500 up to the loan maturity of May 31, 2025.
On May 31, 2023, the Company refinanced its $4,823,000 mortgage with a new two-year $5,360,000 mortgage. Interest-only payments were due monthly for the first 12 months, and commencing June 10, 2024 the Company is required to make equal monthly principal installments of $5,500.
The Company acquired the property on August 22, 2003 at an initial cost of approximately $700,000. For the year ended June 30, 2024, real estate property taxes were approximately $14,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
For the year ended June 30, 2025, real estate property taxes were approximately $14,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%. The maturity date of the new mortgage is August 1, 2051. The second Los Angeles single-family house is a 2,201 square foot home.
Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%. The maturity date is August 1, 2051. The second Los Angeles single-family house is a 2,201 square foot home. The Company acquired the property on August 22, 2003 at an initial cost of approximately $700,000.
Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%. The maturity date of the new mortgage is August 1, 2051. The third Los Angeles single-family house is a 2,387 square foot home.
Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%. The maturity date is August 1, 2051. The third Los Angeles single-family house is a 2,387 square foot home. The Company acquired the property in July of 2015 as a strategic asset for $1,975,000.
The outstanding mortgage balance was approximately $733,000 as of June 30, 2024 with an interest rate of 4.125% and the maturity date of the mortgage is September 1, 2042. The ninth Los Angeles apartment complex is a 13,000 square foot two-story apartment with 8 units.
The outstanding mortgage balance was approximately $715,000 as of June 30, 2025 with an interest rate of 4.125% and the maturity date is September 1, 2042. The ninth Los Angeles apartment complex is a 13,000 square foot two-story apartment with 8 units. The Company acquired the property on May 1, 2001 at an initial cost of approximately $1,206,000.
Los Angeles, CA (10) 100 % 100 % 15. Los Angeles, CA (11) 98 % 100 % 16. Los Angeles, CA (12) 74 % 97 % 17. Los Angeles, CA (13) 100 % 100 % 18. Los Angeles, CA (14) 100 % 100 % 19.
Los Angeles, CA (10) 100 % 98 % 15. Los Angeles, CA (11) 96 % 98 % 16. Los Angeles, CA (12) 69 % 86 % 17. Los Angeles, CA (13) 100 % 100 % 18. Los Angeles, CA (14) 100 % 91 % 19.
In August 2004, the Company purchased an approximately two-acre parcel of unimproved land in Kihei, Maui, Hawaii for $1,467,000. Upon the recent wildfires in the area the land was not impacted. As of June 30, 2024, this property is not encumbered by a mortgage.
The maturity date is October 1, 2048. 19 Maui, Hawaii . In August 2004, the Company purchased an approximately two-acre parcel of unimproved land in Kihei, Maui, Hawaii for $1,467,000. As of June 30, 2025, this property is not encumbered by a mortgage.
The Company acquired the property on October 20, 1999 at an initial cost of approximately $2,150,000. For the year ended June 30, 2024, real estate property taxes were approximately $40,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
In an all-cash transaction, the Company acquired the property on May 14, 2021 at an initial cost of approximately $2,600,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. For the year ended June 30, 2025, real estate property taxes were approximately $34,000.
The company acquired the property in July of 2015 as a strategic asset for $1,975,000. For the year ended June 30, 2024, real estate property taxes were approximately $28,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
For the year ended June 30, 2025, real estate property taxes were approximately $28,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
Las Colinas, TX 83 % 91 % 2. Morris County, NJ 84 % 96 % 3. St. Louis, MO 31 % 37 % 4. Florence, KY 85 % 96 % 5. Los Angeles, CA (1) 88 % 96 % 6. Los Angeles, CA (2) 100 % 94 % 7. Los Angeles, CA (3) 96 % 94 % 8.
Las Colinas, TX 85 % 95 % 2. Morris County, NJ 89 % 97 % 3. St. Louis, MO 50 % 52 % 4. Florence, KY 83 % 91 % 5. Los Angeles, CA (1) 94 % 99 % 6. Los Angeles, CA (2) 100 % 94 % 7. Los Angeles, CA (3) 98 % 97 % 8.
Los Angeles, CA (4) 81 % 95 % 9. Los Angeles, CA (5) 99 % 99 % 10. Los Angeles, CA (6) 98 % 97 % 11. Los Angeles, CA (7) 97 % 92 % 12. Los Angeles, CA (8) 98 % 96 % 13. Los Angeles, CA (9) 89 % 87 % 14.
Los Angeles, CA (4) 85 % 96 % 9. Los Angeles, CA (5) 94 % 94 % 10. Los Angeles, CA (6) 95 % 92 % 11. Los Angeles, CA (7) 84 % 68 % 12. Los Angeles, CA (8) 89 % 87 % 13. Los Angeles, CA (9) 88 % 87 % 14.
The Company acquired the property on July 19, 2000 at an initial cost of approximately $1,070,000. For the year ended June 30, 2024, real estate property taxes were approximately $18,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
For the year ended June 30, 2025, real estate property taxes were approximately $41,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The Company acquired the property on April 29, 2011 at an initial cost of approximately $4,000,000. For the year ended June 30, 2024, real estate property taxes were approximately $61,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 27.5 years.
For the year ended June 30, 2025, real estate property taxes were approximately $23,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
The fifth Los Angeles apartment complex is a 27,600 square foot two-story apartment with 30 units. The Company acquired the property on July 7, 2000 at an initial cost of approximately $4,411,000. For the year ended June 30, 2024, real estate property taxes were approximately $82,000.
The mortgage loan matures in July 2052. The sixth Los Angeles apartment complex is a 3,000 square foot apartment with 4 units. The Company acquired the property on July 19, 2000 at an initial cost of approximately $1,070,000. For the year ended June 30, 2025, real estate property taxes were approximately $20,000.
InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The loan was extended to July 31, 2023. On December 16, 2020, the Partnership and InterGroup entered into a loan modification agreement which increased the Partnership’s borrowing from InterGroup as needed up to $10,000,000.
InterGroup also received a loan fee equal to 3% of the principal. The loan was prepayable at any time without penalty and was subsequently extended through July 31, 2023. On December 16, 2020, the Partnership and InterGroup executed a loan modification agreement that increased the borrowing capacity, as needed, to a maximum of $10,000,000.
Upon the dissolution of the Partnership in December 2021, Portsmouth assumed the Partnership’s note payable to InterGroup in the amount of $11,350,000. On December 31, 2021, Portsmouth and InterGroup entered into a loan modification agreement which increased Portsmouth’s borrowing from InterGroup as needed up to $16,000,000.
Subsequently, on December 31, 2021, Portsmouth and InterGroup entered into a separate loan modification agreement, raising Portsmouth’s borrowing limit to $16,000,000. Following the dissolution of the Partnership in December 2021, Portsmouth assumed the outstanding loan obligation to InterGroup in the amount of $11,350,000.
The outstanding mortgage balance was approximately $1,919,000 as of June 30, 2024 with a fixed interest rate of 3.59% per annum and the maturity date of the mortgage is June 23, 2026. The second Los Angeles apartment complex is a 12,700 square foot apartment with 14 units.
The outstanding mortgage balance was approximately $1,803,000 as of June 30, 2025 with a fixed interest rate of 3.05% per annum and the maturity date is December 1, 2030. The fourth Los Angeles apartment complex is a 26,100 square foot two-story apartment with 31 units.
Outstanding mortgage balance was approximately $783,000 as of June 30, 2024. The first Los Angeles single-family house is a 2,771 square foot home. The Company acquired the property on November 9, 2000 at an initial cost of approximately $660,000. For the year ended June 30, 2024, real estate property taxes were approximately $12,000.
The outstanding mortgage balance was approximately $766,000 as of June 30, 2025 with a fixed interest rate of 3.50% per annum and the maturity date is August 2051. The first Los Angeles single-family house is a 2,771 square foot home. The Company acquired the property on November 9, 2000 at an initial cost of approximately $660,000.
Outstanding mortgage balance was approximately $1,503,000 as of June 30, 2024. 20 The tenth Los Angeles apartment complex, is a 4,200 square foot two-story apartment with 2 units. For the year ended June 30, 2024, real estate property taxes were approximately $14,000. Depreciation is recorded on the straight-line method based upon an estimated useful life of 40 years.
For the year ended June 30, 2025, real estate property taxes were approximately $14,000. Depreciation is recorded on the straight-line method based upon an estimated useful life of 40 years. The outstanding mortgage balance was approximately $645,000 as of June 30, 2025, with an interest rate of 3.50% and the maturity date is July 2051.
In addition to the properties, the Company owns approximately 2 acres of unimproved land in Maui, Hawaii. As of June 30, 2024, all the Company’s operating real estate properties are managed in-house. Description of Properties Las Colinas, Texas.
These properties include sixteen apartment complexes, three single-family houses held as strategic investments, and one commercial real estate property. All properties are operating properties. In addition to the properties, the Company owns approximately 2 acres of unimproved land in Maui, Hawaii. As of June 30, 2025, all the Company’s operating real estate properties are managed in-house.
In June 2021, the Company refinanced its 3.75% existing $388,000 mortgage and generated net proceeds of $183,000. The outstanding new mortgage balance was approximately $523,000 as of June 30, 2024 with a five-year fixed interest rate of 3.5% per annum adjustable rate thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
The outstanding mortgage balance was approximately $886,000 as of June 30, 2025, with a five-year fixed interest rate of 3.5% per annum adjustable thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments. Semi-annual rate cap is 1.25% after the initial interest rate change with a floor equal to the start rate and ceiling of 9.95%.
In July 2023, the note maturity date was extended to July 31, 2025 and the borrowing amount available was increased to $20,000,000. In March 2024, Portsmouth and InterGroup entered in a loan modification agreement which increased Portsmouth’s borrowing amount to $30,000,000. Portsmouth agreed to a 0.5% loan modification fee for the increased borrowing of $10,000,000 payable to InterGroup.
In July 2023, the loan’s maturity date was extended to July 31, 2025, and the available borrowing capacity was increased to $20,000,000. In connection with this increase, the Company agreed to pay InterGroup a 0.5% loan modification fee applicable to the additional $10,000,000.
The fourth Los Angeles apartment complex is a 26,100 square foot two-story apartment with 31 units. The Company acquired the property on May 26, 2000 at an initial cost of approximately $7,500,000. For the year ended June 30, 2024, real estate property taxes were approximately $129,000.
The eleventh apartment in Marina del Rey, California, is a 6,316 square foot two-story apartment with 9 units. The Company acquired the property on April 29, 2011 at an initial cost of approximately $4,000,000. For the year ended June 30, 2025, real estate property taxes were approximately $62,000.
The outstanding mortgage balance was approximately $5,355,000 as of June 30, 2024. The floating interest rate is based on the one month term SOFR plus 310 bps floating with a SOFR cap of 5.5%.
In May 2025, the Company amended the agreement to extend the maturity to June 5, 2028 and made a $344,000 principal reduction. The outstanding mortgage balance was approximately $4,950,000 as of June 30, 2025. The floating rate is based on 30-day Term SOFR plus 3.10%, with a SOFR cap of 5.5%. Florence, Kentucky.
In July 2021, the Company refinanced its 3.75% existing $323,000 mortgage and generated net proceeds of $846,000. The outstanding new mortgage balance was approximately $1,088,000 as of June 30, 2024 with a fixed interest rate of 3.50% per annum and the maturity date of the new mortgage is July 1, 2051.
The outstanding mortgage balance was approximately $1,863,000 as of June 30, 2025 with a fixed interest rate of 3.59% per annum and the maturity date of the mortgage is June 23, 2026. In February 2025 the Company entered into a listing agreement to sell this property and began active marketing in April 2025.
RENTAL PROPERTIES As June 30, 2024, the Company’s investment in real estate consisted of twenty properties located throughout the United States, with a concentration in Texas and Los Angeles County, California. These properties include sixteen apartment complexes, three single-family houses as strategic investments and one commercial real estate property. All properties are operating properties.
Such actions would be subject to Board approval and, if required, shareholder approval under applicable corporate law and listing rules. RENTAL PROPERTIES As of June 30, 2025, the Company’s investment in real estate consisted of twenty properties located throughout the United States, with a concentration in Texas and Los Angeles County, California.
The outstanding new mortgage balance was approximately $8,102,000 at June 30, 2024 with a fixed interest rate of 2.52% per annum and the maturity date of the new mortgage is November 1, 2030. The new mortgage requires interest-only payments for the first two years and will amortize over 30 years thereafter.
The outstanding mortgage balance was approximately $7,907,000 at June 30, 2025 with a fixed interest rate of 2.52% per annum and the maturity date is November 1, 2030. The fifth Los Angeles apartment complex is a 27,600 square foot two-story apartment with 30 units. The Company acquired the property on July 7, 2000 at an initial cost of approximately $4,411,000.
The outstanding new mortgage balance was approximately $5,662,000 at June 30, 2024 with a fixed annual interest rate on the new mortgage at 4.40% for the first five years and 5.44% thereafter. The mortgage loan matures in July 2052. The sixth Los Angeles apartment complex is a 3,000 square foot apartment with 4 units.
For the year ended June 30, 2025, real estate property taxes were approximately $83,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. The outstanding mortgage balance was approximately $5,558,000 at June 30, 2025 with a fixed annual interest rate 4.40% for the first five years and 5.44% thereafter.
Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. On June 30, 2022, the Company refinanced its 5.97%, $5,283,000 mortgage note payable on this property and obtained a new mortgage note payable for $5,850,000. The Company received net proceeds of $584,000 because of the refinance.
For the year ended June 30, 2025, real estate property taxes were approximately $12,000. Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years.
In February 2022, the Los Angeles County Board of Supervisors extended the majority of the eviction moratorium to 2022 and parts of it until 2023. The County’s non-payment COVID-19 tenant eviction protection resolution expired on March 31, 2023.
The County’s non-payment COVID-19 tenant eviction protection resolution expired on March 31, 2023. In unincorporated Los Angeles County, annual rent increases for fully covered units are limited to 60% of CPI, capped at 3%, effective January 1, 2025.
Interest rate on the new mortgage is fixed at 3.50% for five years and the mortgage matures in July 2051. Outstanding mortgage balance was approximately $659,000 as of June 30, 2024. The eleventh apartment which is located in Marina del Rey, California, is a 6,316 square foot two-story apartment with 9 units.
The outstanding mortgage balance was approximately $1,469,000 as of June 30, 2025 with an interest rate of 3.50% and the maturity date is July 2051. 18 The tenth Los Angeles apartment complex is a 4,200 square foot two-story apartment with 2 units. The Company acquired the property on November 23, 2020 at an initial cost of approximately $1,530,000.
In September 2021, the Company refinanced the property’s existing 4.75% per annum mortgage and reduced the rate to five-year fixed at 3.5% per annum, adjustable thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. The outstanding mortgage balance was approximately $1,064,000 at June 30, 2025 with a five-year fixed interest rate of 3.5% per annum and adjustable rate thereafter at 2.5% over the 6-month LIBOR Index with semi-annual rate and payment adjustments.
The Mezzanine Loan is secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. On July 31, 2019, Mezzanine refinanced the Mezzanine Loan by entering into a new mezzanine loan agreement (“New Mezzanine Loan Agreement”) with Cred Reit Holdco LLC in the amount of $20,000,000.
The mezzanine loan was refinanced in July 2019 through a new agreement with CRED REIT Holdco LLC (“Mezzanine Lender”) in the amount of $20,000,000, at a reduced fixed interest rate of 7.25%, also maturing on January 1, 2024. As of June 30, 2024, the outstanding mortgage loan balance was $76,962,000. As of December 31, 2024, the outstanding balance was $75,789,000.
Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. In June 2021, the Company refinanced its 3.75% existing $563,000 mortgage and generated net proceeds of $619,000.
Depreciation is recorded on the straight-line method, based upon an estimated useful life of 40 years. The outstanding mortgage balance was approximately $9,800,000 as of June 30, 2025. In December 2024 the Company refinanced with new 10-year, interest-only loan at 5.40%, the maturity date is January 2035. Los Angeles, California.
Retroactive to January 1, 2024, Mezzanine will be required to accrue an additional 4% default interest and a 1% forbearance fee or $245,000. During the Forbearance Period, no payments will be due to the Mezz Lender until the new maturity date or loan prepayment.
Mezzanine Loan Forbearance Agreement (CRED REIT Holdco LLC): ● Provided forbearance through January 1, 2025, contingent on no termination event. ● Mezzanine Lender advanced $4.5 million to cover the senior loan principal paydown. ● Required 4% default interest accrual and a 1% forbearance fee ($245,000), both payable at final maturity or prepayment. ● No payments were required during the forbearance period. ● Guaranteed by Portsmouth.
The Company is the sole member of Mezzanine, and Mezzanine is the sole member of Operating. The Loan Agreements provide for a $97,000,000 Mortgage Loan and a $20,000,000 Mezzanine Loan. The proceeds of the Loan Agreements were used to fund the redemption of limited partnership interests and the pay-off of the prior mortgage.
Mortgage and Mezzanine Loan History In December 2013, Justice Investors Limited Partnership (“Justice”), then a consolidated subsidiary of Portsmouth Square, Inc. (“Portsmouth”), obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan to fund the redemption of limited partnership interests and repay a prior $42,940,000 mortgage loan.
Removed
In the opinion of management, the Hotel is adequately covered by insurance. 16 HOTEL FINANCING On December 18, 2013: (i) Justice Operating Company, LLC, a Delaware limited liability company (“Operating”), entered into a loan agreement (“Mortgage Loan Agreement”) with Bank of America (“Mortgage Lender”); and (ii) Justice Mezzanine Company, a Delaware limited liability company (“Mezzanine”), entered into a mezzanine loan agreement (“Mezzanine Loan Agreement” and, together with the Mortgage Loan Agreement, the “Loan Agreements”) with ISBI San Francisco Mezz Lender LLC (“Mezzanine Lender” and, together with Mortgage Lender, the “Lenders”).
Added
In the opinion of management, the Hotel is adequately covered by insurance, subject to customary deductibles, exclusions, and coverage limits. We believe the Hotel is suitable and adequate for its current use and is substantially utilized. 14 HOTEL FINANCING A.
Removed
The Mortgage Loan is secured by Portsmouth’s principal asset, the Hotel. The Mortgage Loan bears an interest rate of 5.275% per annum and matures in January 2024.
Added
The mortgage loan was secured by the Company’s principal asset, the Hilton San Francisco Financial District (the “Hotel”), and bore interest at a fixed rate of 5.275% per annum. The loan required interest-only payments through January 2017 and began amortizing thereafter on a 30-year schedule, maturing on January 1, 2024. The mortgage loan was guaranteed in part by Portsmouth.
Removed
The term of the loan is ten years with interest only due in the first three years and principal and interest payments to be made during the remaining seven years of the loan based on a thirty-year amortization schedule. The Mortgage Loan also requires payments for impounds related to property tax, insurance, and FF&E reserves.
Added
The mezzanine loan, originally bearing interest at 9.75% per annum and maturing concurrently with the senior loan, was secured by the membership interests of Justice Operating Company, LLC (“Operating”), held by Justice Mezzanine Company, LLC (“Mezzanine”), and was subordinated to the mortgage debt.
Removed
As additional security for the Mortgage Loan, there is a limited guaranty (“Mortgage Guaranty”) executed by Portsmouth in favor of the Mortgage Lender. On April 29, 2024, U.S. Bank National Association and other lenders (“Lender”) entered into a Forbearance Agreement (the “Mortgage Loan Forbearance Agreement”), all capitalized terms are used in this paragraph as defined in this agreement with Operating.
Added
B. Forbearance Agreements and Defaults Due to the maturity of both loans on January 1, 2024, and the absence of full repayment by that date, the Company negotiated forbearance agreements with both lenders on April 29, 2024. Mortgage Loan Forbearance Agreement (U.S.
Removed
Assuming no Termination Event occurs, Lender agrees to not take any action with respect to the loan facility set forth therein prior to January 1, 2025. During the Forbearance Period, Operating shall make all regularly scheduled payments to the Lender.
Added
Bank and others, the “Mortgage Lender”): ● Provided forbearance through January 1, 2025, assuming no termination event. ● Required a 10% principal paydown of $8,590,000. ● Included accrual of 4% default interest, retroactive to January 1, 2024, payable upon final maturity or prepayment. ● Included a 1% forbearance fee of $859,000, paid at execution. ● Operating continued timely monthly payments during the forbearance period. ● Guaranteed by Portsmouth.
Removed
The Mortgage Loan Forbearance Agreement also contains amended terms as to financial covenants and a 10% principal paydown in the amount of $8,589,706.44 to be applied by the Lender upon execution of the Mortgage Loan Forbearance Agreement.
Added
Both agreements contained customary covenants, events of default, and representations and warranties. On January 3, 2025, Justice Operating Company, LLC (“Operating”) received a Notice of Termination from the Mortgage Lender, citing a termination event for failure to repay the debt by the forbearance expiration.
Removed
Retroactive to January 1, 2024, Operating is required to accrue an additional 4% default interest, due and payable to Lender at the new maturity or loan prepayment. In addition, Operating paid 1% forbearance fee or $858,971 to Lender upon execution of the Forbearance Agreement.
Added
On January 14, 2025, the Mezzanine Lender issued a Notice of Default to Justice Mezzanine Company, LLC (“Mezzanine”), asserting its rights to pursue all remedies under the agreement. These defaults were the primary contributors to Portsmouth’s substantial doubt assessment under ASC 205-40, as disclosed in Note 2 – Liquidity. C.
Removed
The interest rate on the new mezzanine loan is 7.25% and the loan matures on January 1, 2024. Interest only payments are due monthly. As additional security for the new mezzanine loan, there is a limited guaranty executed by the Company in favor of Cred Reit Holdco LLC (the “Mezzanine Guaranty” and, together with the Mortgage Guaranty, the “Guaranties”).
Added
Debt Refinancing Completed on March 28, 2025 On January 21, 2025, Operating executed a non-binding term sheet with Prime Finance (“Prime”) for a new senior loan. On March 28, 2025, Operating closed on a senior mortgage loan and Mezzanine closed on a modified mezzanine loan (collectively, the “Loan Agreements”), fully retiring the prior debt with U.S.
Removed
On April 29, 2024, CRED REIT HOLDCO LLC (“Mezz Lender”) entered into a Forbearance Agreement (the “Mezz Forbearance Agreement”), all capitalized terms in this paragraph are used as defined in the Mezz Forbearance Agreement) with Mezzanine, an indirect subsidiary of the Company.
Added
Bank and CRED REIT Holdco LLC. The refinancing resulted in an increase in overall leverage of approximately $1.0 million. ● Mortgage Loan: Operating entered into a $67,000,000 Mortgage Loan Agreement with Prime. The loan bears interest at Term SOFR + 4.75%, with a Term SOFR cap of 4.50%, and is interest-only through maturity.
Removed
Assuming no Termination Event occurs, Mezz Lender agrees to not take any action with respect to the loan facility set forth therein prior to January 1, 2025. The Mezz Lender also has advanced $4.5 million for payment of the 10% principal paydown with respect to the Mortgage Loan Forbearance Agreement (defined below).

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The Company may be subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company will defend itself vigorously against any such claims. Management does not believe that the impact of such matters will have a material effect on the financial conditions or result of operations when resolved. Item 4.
Biggest changeItem 3. Legal Proceedings. The Company may, from time to time, be subject to legal proceedings, claims, and litigation arising in the ordinary course of business. As of June 30, 2025, the Company is not a party to any material pending legal proceedings, nor are any such proceedings known to be contemplated by governmental authorities.
Removed
Mine Safety Disclosures. Not applicable. 22 PART II
Added
Management believes that the outcome of any ordinary course matters, if they were to arise, would not have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.
Added
We are not a party to any governmental environmental proceedings required disclosure under Item 103 of Regulation S-K, including any proceeding involving potential monetary sanctions of $300,000 or more. We recognize and disclose loss contingencies in accordance with ASC 450; see Note 17 – Commitments and Contingencies.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS. This information appears in Part III, Item 12 of this report. 23 ISSUER PURCHASES OF EQUITY SECURITIES The following table reflects purchases of InterGroup’s common stock made by The InterGroup Corporation, for its own account, during the fourth quarter of its fiscal year ending June 30, 2024.
Biggest changeThe information required by Item 201(d) of Regulation S-K regarding securities authorized for issuance under equity compensation plans is incorporated by reference to Part III, Item 12 of this Annual Report on Form 10-K. 21 ISSUER PURCHASES OF EQUITY SECURITIES The Company did not repurchase any shares of its common stock during the fiscal quarter ended June 30, 2025; accordingly, no monthly repurchase table is presented pursuant to Item 703 of Regulation S-K.
Item 5. Market for Common Equity and Related Stockholder Matters. MARKET INFORMATION The Company’s Common Stock is listed and trades on the NASDAQ Capital Market tier of the NASDAQ Stock Market, LLC under the symbol: “INTG”. As of June 30, 2024, the approximate number of holders of record of the Company’s Common Stock was 150.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION The Company’s Common Stock is listed and trades on the NASDAQ Capital Market (“Nasdaq”) under the symbol: “INTG”.
The purchases will be made, in the discretion of management, from time to time, in the open market or through privately negotiated third party transactions depending on market conditions and other factors. The Company’s repurchase program has no expiration date and can be amended and increased, from time to time, in the discretion of the Board of Directors.
Repurchases, if any, may be made from time to time in the open market or through privately negotiated transactions, subject to market conditions and other factors, and the program has no stated expiration date. As of June 30, 2025, approximately 39,209 shares remained available for repurchase under the authorizations. Item 6. Reserved. Reserved.
Removed
Such number of owners was determined from the Company’s shareholders records and does not include beneficial owners of the Company’s Common Stock whose shares are held in names of various brokers, clearing agencies or other nominees. DIVIDENDS The Company has not declared any cash dividends on its common stock and does not foresee issuing cash dividends in the near future.
Added
As of June 30, 2025, the approximate number of holders of record of the Company’s Common Stock was 122 (the actual number of beneficial owners is higher because many shares are held in “street name” by brokers and other nominees).
Removed
SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES Fiscal 2024 Period (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of shares that May Yet be Purchased Under the Plans or Programs Month #1 (April 1- April 30) 3,454 $ 20.56 3,454 68,564 Month #2 (May 1- May 31) 2,788 $ 20.32 2,788 65,776 Month #3 (June 1- June 30) 2,017 $ 20.88 2,017 63,759 TOTAL: 8,259 $ 20.56 8,259 63,759 The Company has only one stock repurchase program.
Added
SUCCESSFUL RESULTS ON REMEDIATION OF NASDAQ LISTING STATUS As disclosed in our Current Report on Form 8-K filed in July 2025, on November 21, 2024 the Nasdaq Listing Qualifications Staff notified the Company of non-compliance with Nasdaq Listing Rule 5550(b)(2) (minimum $35 million market value of listed securities).
Removed
The program was initially announced on January 13, 1998 and was amended on February 10, 2003 and October 12, 2004. The total number of shares authorized to be repurchased pursuant to those prior authorizations was 870,000, adjusted for stock splits.
Added
On May 27, 2025, the Staff notified the Company that its securities were subject to delisting effective June 5, 2025 absent a timely appeal. The Company appealed, which stayed the delisting.
Removed
On June 3, 2009, the Board of Directors authorized the Company to purchase up to an additional 125,000 shares of Company’s common stock. On November 15, 2012, the Board of Directors authorized the Company to purchase up to an additional 100,000 shares of Company’s common stock.
Added
Following a hearing held on July 8, 2025, the Nasdaq Hearings Panel notified the Company on July 17, 2025 that it had granted an extension through September 30, 2025 to evidence compliance by achieving an MVLS of at least $35 million for a minimum of ten consecutive trading days.
Removed
On September 23, 2019, the Board of Directors authorized the Company to purchase up to an additional 120,000 shares of Company’s common stock. On December 20, 2021, the Board of Directors authorized the Company to purchase up to an additional 125,000 shares of Company’s common stock.
Added
On September 17, 2025, the Company received confirmation from Nasdaq that the Company has regained compliance with Listing Rule 5550(b)(2). Nasdaq’s notice stated that, as of September 15, 2025, the Company had demonstrated 11 consecutive business days with a market value of listed securities above $35 million, thereby satisfying the requirement.
Removed
No plan or program expired during the period covered by the table. Item 6. Reserved. Not applicable.
Added
As a result, the Panel granted the Company’s request for continued listing, and the matter is now closed. The Company’s common stock will continue to be listed and traded on The Nasdaq Capital Market under the symbol “INTG”.
Added
DIVIDENDS The Company has not declared any cash dividends on its common stock and currently intends to retain any future earnings to fund operations, invest in the business, and service debt.
Added
Any future determination to declare cash dividends will be at the discretion of the Board of Directors and subject to applicable law and any restrictions contained in the Company’s financing arrangements. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.
Added
The Company maintains a share repurchase program originally announced on January 13, 1998 and subsequently increased by the Board of Directors on February 10, 2023; October 12, 2004; November 15, 2012; September 23, 2019; and December 20, 2021.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved. 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 32 Item 8. Financial Statements and Supplementary Data. 33 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 66 Item 9A. Controls and Procedures. 66 Item 9B.
Biggest changeItem 6. Reserved. 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 31 Item 8. Financial Statements and Supplementary Data. 32 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 66 Item 9A. Controls and Procedures. 66 Item 9B.
Added
Other Information. 67 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 67 PART III Item 10. Directors, Executive Officers and Corporate Governance. 68 Item 11. Executive Compensation. 71 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 76 Item 13. Certain Relationships and Related Transactions, and Director Independence. 78 Item 14.
Added
Principal Accounting Fees and Services. 78 PART IV Item 15. Exhibits, Financial Statement Schedules. 89 Signatures 80 2 FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”).
Added
Forward-looking statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, including anticipated repayment of certain of the Company’s indebtedness, our expected future business condition, the effects of competition and the potential changes in laws, regulations, or government policy applicable to our operations, and other non-historical statements, including the impact of macroeconomic factors (including inflation, increases in interest rates, slowing economic growth or potential recessionary conditions and geopolitical conflicts).
Added
Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.
Added
You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect our results of operations, financial condition, cash flows, performance or future achievements or events.
Added
Statements regarding “intrinsic value,” potential market values, or capital recycling reflect management’s current beliefs and estimates, are not appraisals or guarantees of value, and are subject to risks and uncertainties.
Added
All such forward-looking statements are based on current expectations of management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, forecasted, or implied in these statements.
Added
You should not place undue reliance on any forward-looking statements, and we urge investors to carefully review the disclosures we make concerning risks and uncertainties in Item 1A: “Risk Factors” in this Annual Report on Form 10-K, and in Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission, which are accessible at www.sec.gov .
Added
Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The risk factors discussed in Item 1A: “Risk Factors” could cause our results to differ materially from those expressed in forward-looking statements.
Added
Additional risks and uncertainties, including those not currently known to us or that we presently consider immaterial, may also cause actual results to differ materially from those expressed or implied in forward-looking statements.
Added
Other factors that may cause actual results to differ materially from current expectations include, but are not limited to: ● risks associated with the lodging industry, including competition, increases in wages, labor relations, energy and fuel costs, pandemics or public health crises (whether actual or perceived), acts of terrorism, and downturns in domestic and international economic and market conditions, particularly in the San Francisco Bay Area; ● risks associated with the real estate industry, including changes in real estate and zoning laws or regulations, increases in real property taxes, rising insurance premiums, and increased costs or liabilities related to environmental, health, and safety laws, and other governmental requirements; ● the availability and terms of financing and capital and the general volatility of securities markets; ● increases in interest rates, or sustained periods of higher interest rate environments; ● changes in the competitive environment in the hotel industry; ● economic volatility and significant or prolonged economic slowdowns; ● natural disasters and extreme weather events, or other climate-related impacts; ● inflationary or hyperinflationary pressures; ● litigation, regulatory proceedings, or governmental investigations; and ● other risk factors discussed below in this Report. 3 PART I

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeMonth Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Fiscal Year Year 2023 2023 2023 2023 2023 2023 2024 2024 2024 2024 2024 2024 2023 – 2024 Average Occupancy % 81 % 89 % 93 % 83 % 79 % 80 % 80 % 78 % 76 % 73 % 78 % 87 % 82 % Year 2022 2022 2022 2022 2022 2022 2023 2023 2023 2023 2023 2023 2022 – 2023 Average Occupancy % 93 % 94 % 95 % 89 % 82 % 77 % 76 % 77 % 81 % 65 % 80 % 83 % 83 % Beginning in November 2022, the occupancy of our hotel has been reduced by approximately 13% - 18% every month to reflect the “out-of-order” rooms that were being renovated at any given time.
Biggest changeMonth Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Fiscal Year Year 2024 2024 2024 2024 2024 2024 2025 2025 2025 2025 2025 2025 2024 – 2025 Average Occupancy % 96 % 96 % 96 % 94 % 83 % 87 % 90 % 86 % 91 % 91 % 93 % 93 % 92 % Year 2023 2023 2023 2023 2023 2023 2024 2024 2024 2024 2024 2024 2023 – 2024 Average Occupancy % 81 % 89 % 93 % 83 % 79 % 80 % 80 % 78 % 76 % 73 % 78 % 87 % 82 % Total operating expenses increased by $1,492,000 due to increases in union salaries and wages, Hilton marketing and guest loyalty fees, credit card fees, and travel agent and group commissions.
A change in the assessment of the “more likely than not” standard with respect to a position could materially impact our consolidated financial statements. 31 DEFERRED INCOME TAXES – VALUATION ALLOWANCE We assess the realizability of our deferred tax assets quarterly and recognize a valuation allowance when it is more likely than not that some or all of our deferred tax assets are not realizable.
A change in the assessment of the “more likely than not” standard with respect to a position could materially impact our consolidated financial statements. 30 DEFERRED INCOME TAXES – VALUATION ALLOWANCE We assess the realizability of our deferred tax assets quarterly and recognize a valuation allowance when it is more likely than not that some or all of our deferred tax assets are not realizable.
During the years ended June 30, 2024 and 2023, the Company performed an impairment analysis of its other investments and determined that its investments had other than temporary impairment and recorded impairment losses of $5,000 and $0, respectively. The Company and its subsidiary Portsmouth compute and file income tax returns and prepare separate income tax provisions for financial reporting.
During the years ended June 30, 2025 and 2024, the Company performed an impairment analysis of its other investments and determined that its investments had other than temporary impairment and recorded impairment losses of $0 and $5,000, respectively. The Company and its subsidiary Portsmouth compute and file income tax returns and prepare separate income tax provisions for financial reporting.
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements, related notes included thereto and Item 1A., “Risk Factors,” appearing elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements, related notes included thereto and Item 1A - “Risk Factors,” appearing elsewhere in this Annual Report on Form 10-K.
Portsmouth’s primary asset is a 544-room hotel property located at 750 Kearny Street, San Francisco, California 94108, known as the “Hilton San Francisco Financial District” (the “Hotel” or the “Property”) and related facilities, including a five-level underground parking garage. The financial statements of Portsmouth have been consolidated with those of the Company.
Portsmouth’s primary asset is a 544-room hotel property located at 750 Kearny Street, San Francisco, California 94108, known as the “Hilton San Francisco Financial District” (the “Hotel” or the “Property”) and related facilities, including a five-level underground parking garage. The financial statements of Portsmouth are consolidated with those of the Company.
STOCK-BASED COMPENSATION We account for stock-based compensation by measuring and recognizing as compensation expense the fair value of all share-based payment awards made to employees, including employee stock options, restricted stock awards and employee stock purchases related to the Employee Stock Purchase Plan, or ESPP, based on estimated grant date fair values.
STOCK-BASED COMPENSATION We account for stock-based compensation by measuring and recognizing as compensation expense the fair value of all share-based payment awards made to employees, including employee stock options, restricted stock awards and employee stock purchases related to the Employee Stock Purchase Plan (“ESPP”) based on estimated grant date fair values.
The following table sets forth the monthly average occupancy percentage of the Hotel for the fiscal years ended June 30, 2024 and 2023.
The following table sets forth the monthly average occupancy percentage of the Hotel for the fiscal years ended June 30, 2025 and 2024.
Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiency.
Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiencies.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to the consolidation of our subsidiaries, to our revenues, allowances for bad debts, accruals, asset impairments, other investments, income taxes and commitments and contingencies.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to the consolidation of our subsidiaries, revenues, allowance for doubtful accounts, accruals, asset impairments, other investments, income taxes, and commitments and contingencies.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates, or our estimates may be affected by different assumptions or conditions.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates, and different assumptions or conditions could materially affect such estimates.
There were no indicators of impairment on its hotel investments or intangible assets and accordingly no impairment losses recorded for the years ended June 30, 2024 and 2023.
There were no indicators of Hotel investments or intangible assets, and accordingly there were no impairment losses recorded for the years ended June 30, 2025 and 2024.
For the year ended June 30, 2023, the Company had a net realized loss of $1,712,000 and a net unrealized gain of $2,838,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations.
For the year ended June 30, 2024, the Company had a net realized gain of $1,251,000 and a net unrealized loss of $1,736,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations.
However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.
However, the amount of gain or loss on marketable securities for any given period is not necessarily predictive, and variations from period to period may have limited analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.
Investment Transactions The Company had a net loss on marketable securities of $485,000 for the year ended June 30, 2024 compared to a net income on marketable securities of $1,126,000 for the year ended June 30, 2023. For the year ended June 30, 2024, the Company had a net realized gain of $1,251,000 and a net unrealized loss of $1,736,000.
Investment Transactions The Company had a net loss on marketable securities of $1,347,000 for the year ended June 30, 2025 compared to a net loss on marketable securities of $485,000 for the year ended June 30, 2024. For the year ended June 30, 2025, the Company had a net realized loss of $329,000 and a net unrealized loss of $1,018,000.
Fiscal Year Ended June 30, 2024, Compared to Fiscal Year Ended June 30, 2023 The Company had a net loss of $12,556,000 for the year ended June 30, 2024 compared to a net loss of $9,932,000 for the year ended June 30, 2023.
Fiscal Year Ended June 30, 2025, Compared to Fiscal Year Ended June 30, 2024 For the fiscal year ended June 30, 2025, the Company reported a net loss of $7,547,000, compared to a net loss of $12,556,000 for the year ended June 30, 2024.
The following table shows the composition of the Company’s marketable securities portfolio by selected industry groups: As of June 30, 2024 Industry Group Fair Value % of Total Investment Securities REITs and real estate companies $ 3,358,000 45.1 % Communication services 1,994,000 26.7 % T-Notes 933,000 12.5 % Energy 303,000 4.1 % Financial services 269,000 3.6 % Healthcare 179,000 2.4 % Utilities 163,000 2.2 % Industrial 159,000 2.1 % Basic materials 75,000 1.0 % Technology 21,000 0.3 % $ 7,454,000 100.0 % As of June 30, 2023 Industry Group Fair Value % of Total Investment Securities REITs and real estate companies $ 6,985,000 38.1 % Technology 2,779,000 15.1 % T-Notes 2,093,000 11.4 % Financial services 1,865,000 10.2 % Consumer cyclical 1,689,000 9.2 % Basic materials 1,047,000 5.7 % Healthcare 739,000 4.0 % Communication services 566,000 3.1 % Industrial 485,000 2.7 % Utilities 97,000 0.5 % $ 18,345,000 100.0 % As of June 30, 2024, the Company’s investment portfolio is diversified with 24 different equity positions.
The following table shows the composition of the Company’s marketable securities portfolio by selected industry groups: As of June 30, 2025 Industry Group Fair Value % of Total Investment Securities REITs and real estate companies $ 966,000 99.6 % Technology 3,000 0.4 % $ 969,000 100.0 % As of June 30, 2024 Industry Group Fair Value % of Total Investment Securities REITs and real estate companies $ 3,358,000 45.1 % Communication services 1,994,000 26.7 % T-Notes 933,000 12.5 % Energy 303,000 4.1 % Financial services 269,000 3.6 % Healthcare 179,000 2.4 % Utilities 163,000 2.2 % Industrial 159,000 2.1 % Basic materials 75,000 1.0 % Technology 21,000 0.3 % $ 7,454,000 100.0 % As of June 30, 2025 the Company’s investment portfolio was comprised of two different equity positions.
The Company’s residential rental properties provide income from short-term operating leases and no lease extends beyond one year. Rental increases are expected to offset anticipated increased property operating expenses.
For the two most recent fiscal years, the impact of inflation on the Company’s income has not been material. The Company’s residential rental properties provide income from short-term operating leases and no lease extends beyond one year. Rental increases are expected to offset anticipated increased property operating expenses.
The Company holds two equity securities that comprised more than 10% of the equity value of the portfolio. The two largest security positions represent 28% and 22% of the portfolio and consists of the common stock of American Realty Investors, Inc. (NASDAQ: ARL) and Alphabet Inc.
As of June 30, 2024, the Company’s investment portfolio was diversified with 24 different equity positions. The Company holds two equity securities that comprised more than 10% of the equity value of the portfolio. The two largest security positions represent 28% and 22% of the portfolio and consist of the common stock of American Realty Investors, Inc.
For the year ended June 30, 2024 2023 Hotel revenues: Hotel rooms $ 35,239,000 $ 35,684,000 Food and beverage 3,213,000 2,625,000 Garage 2,988,000 2,790,000 Other operating departments 446,000 928,000 Total hotel revenues 41,886,000 42,027,000 Operating expenses excluding depreciation and amortization (36,139,000 ) (34,457,000 ) Operating income interest, depreciation and amortization 5,747,000 7,570,000 Interest expense - mortgage (9,407,000 ) (6,467,000 ) Depreciation and amortization expense (3,494,000 ) (2,815,000 ) Net loss from Hotel operations $ (7,154,000 ) $ (1,712,000 ) For the year ended June 30, 2024, the Hotel had operating income of $5,747,000 before interest, depreciation, and amortization on total operating revenues of $41,886,000.
For the year ended June 30, 2025 2024 Hotel revenues: Hotel rooms $ 39,648,000 $ 35,239,000 Food and beverage 2,862,000 3,213,000 Garage 3,214,000 2,988,000 Other operating departments 639,000 446,000 Total Hotel revenues 46,363,000 41,886,000 Operating expenses excluding depreciation and amortization (37,631,000 ) (36,139,000 ) Operating income before interest, depreciation and amortization 8,732,000 5,747,000 Gain on extinguishment of debt 1,416,000 - Interest expense - mortgage (10,680,000 ) (9,407,000 ) Depreciation and amortization expense (3,634,000 ) (3,494,000 ) Net loss from Hotel operations $ (4,166,000 ) $ (7,154,000 ) For the year ended June 30, 2025, the Hotel had operating income of $8,732,000 before interest, depreciation, and amortization on total operating revenues of $46,363,000.
For the years ended June 30, 2024 2023 Net (loss) gain on marketable securities $ (485,000 ) $ 1,126,000 Impairment loss on other investments (5,000 ) - Dividend and interest income 405,000 485,000 Margin interest expense (1,013,000 ) (848,000 ) Trading expenses (535,000 ) (705,000 ) Net (loss) gain from marketable securities operations $ (1,633,000 ) $ 58,000 28 FINANCIAL CONDITION, LIQUIDITY AND CAPITAL SOURCES The Company had cash and cash equivalents of $4,333,000 and $5,960,000 as of June 30, 2024 and 2023, respectively.
For the years ended June 30, 2025 2024 Net loss on marketable securities $ (1,347,000 ) $ (485,000 ) Impairment loss on other investments - (5,000 ) Dividend and interest income 161,000 405,000 Margin interest expense (806,000 ) (1,013,000 ) Trading expenses (510,000 ) (535,000 ) Net loss from marketable securities operations $ (2,502,000 ) $ (1,633,000 ) 26 FINANCIAL CONDITION, LIQUIDITY AND CAPITAL SOURCES As of June 30, 2025, the Company had total cash, cash equivalents, and restricted cash $15,195,000 (including $53,000 classified as held for sale) compared to $8,694,000 as of June 30, 2024.
Since Aimbridge has the power and ability under the terms of its management agreement to adjust Hotel room rates on an ongoing basis, there should be minimal impact on partnership revenues due to inflation. For the two most recent fiscal years, the impact of inflation on the Company’s income is not viewed by management as material.
Room rates can be, and usually are, adjusted to account for inflationary cost increases. Since Aimbridge has the power and ability under the terms of its management agreement to adjust Hotel room rates on an ongoing basis, there is minimal expected impact on revenues due to inflation.
For the discussion and analysis of our 2023 financial condition and results of operations compared to 2024, refer to Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended June 30, 2024.
Under the SEC’s Item 303 modernization, we have omitted a discussion of the earlier year. For a comparison of fiscal 2024 to fiscal 2023, refer to Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report of Form 10-K for the year ended June 30, 2024, which is incorporated herein by reference.
For the Year Ended June 30, Average Daily Rate Average Occupancy % RevPAR 2024 $ 217 82 % $ 177 2023 $ 217 83 % $ 180 26 The Hotel’s revenues decreased by less than 1% year over year.
For the Year Ended June 30, Average Daily Rate Average Occupancy % RevPAR 2025 $ 218 92 % $ 200 2024 $ 217 82 % $ 177 24 The Hotel’s revenues increased by 10% year over year.
Income from operations was $1,454,000 for the year ended June 30, 2024 and income from operations was $4,336,000 for fiscal year ended June 30, 2023. The Company recorded losses of $1,633,000 from marketable securities transactions during fiscal year ended June 30, 2024 as compared to gains of $58,000 during fiscal year ended June 30, 2023.
Income from operations was $7,643,000 in fiscal 2025, an increase from $1,454,000 for the year ended June 30, 2024. Losses from marketable securities transactions totaled $2,502,000 for the year ended June 30, 2025, compared to losses of $1,633,000 for the year ended June 30, 2024.
Real Estate Operations Revenues from real estate operations increased for June 30, 2024 and 2023 at $16,254,000 and $15,580,000 primarily as the result of higher occupancy and increased rental rates. Real estate operating expenses decreased to $9,836,000 from $10,017,000 primarily due to decrease in salaries and related costs.
Real Estate Operations Revenues from real estate operations increased to $18,015,000 in fiscal 2025 and $16,254,000 in fiscal 2024, primarily as the result of higher occupancy and increased rental rates. Real estate operating expenses decreased to $9,550,000 from $9,836,000 primarily due to a decrease in vacancy at our Missouri property, which rebranding and is undergoing renovation.
The following table shows the net (loss) gain on the Company’s marketable securities and the associated margin interest and trading expenses for the respective years.
(NASDAQ: ARL) and Alphabet Inc. (NASDAQ: GOOG), which are included in the REITs and real estate companies and Communication Services, respectively The following table shows the net loss on the Company’s marketable securities and the associated margin interest and trading expenses for the respective years.
The Company could amend its by-laws and increase the number of authorized shares to issue additional shares to raise capital in the public markets if needed. During the fiscal year ending June 30, 2024, the Company obtained a second mortgage on its 358-unit apartment located in Las Colinas, Texas in the amount of $4,573,000.
During the fiscal year ending June 30, 2024, the Company obtained a second mortgage on its 358-unit apartment located in Las Colinas, Texas in the amount of $4,573,000. The term of the loan is approximately 7 years with an interest rate of 7.60%.
Total operating expenses increased by $1,682,000 due to increase in rooms, food and beverage, salaries and wages, utilities, credit card commissions, and franchise fees. The following table sets forth the average daily room rate, average occupancy percentage and room revenue per available room (“RevPAR”) of the Hotel for the year ended June 30, 2024 and 2023.
The following table sets forth the average daily room rate, average occupancy percentage and room revenue per available room (“RevPAR”) of the Hotel for the year ended June 30, 2025 and 2024.
The Company does not record an income tax benefit from its pre-tax losses due to its continued operating losses during the past three consecutive taxable years.
Portsmouth does not record an income tax benefit from its pre-tax losses due to its continued operating losses in each of the past three consecutive taxable years. 25 MARKETABLE SECURITIES AND OTHER INVESTMENTS As of June 30, 2025 and 2024, the Company had investments in marketable equity securities of $969,000 and $7,454,000, respectively.
IMPACT OF INFLATION Hotel room rates are typically impacted by supply and demand factors, not inflation, since rental of a hotel room is usually for a limited number of nights. Room rates can be, and usually are, adjusted to account for inflationary cost increases.
See Note 10 for obligor/recourse details. OFF-BALANCE SHEET ARRANGEMENTS As of June 30, 2025, the Company has no material off balance sheet arrangements. IMPACT OF INFLATION Hotel room rates are typically impacted by supply and demand factors, not inflation, since rental of a hotel room is usually for a limited number of nights.
Hotel Operations The Company had net loss of $7,154,000 from Hotel operations for the year ended June 30, 2024 compared to net loss of $1,712,000 for the year ended June 30, 2023. The change was primarily attributable to the increase of $1,682,000 in operating expenses and the $2,940,000 increase in interest expense.
Hotel Operations The Company had a loss of $4,166,000 from Hotel operations for the year ended June 30, 2025 compared to a loss of $7,154,000 for the year ended June 30, 2024.
Average daily rate remained the same, average occupancy decreased 1%, and RevPAR increased by $3 for the twelve months ended June 30, 2024 compared to the twelve months ended June 30, 2023. The Hotel started its’ full renovation of all guest rooms and suites mid-November 2022 and completed the renovation by June 30, 2024.
Average daily rate increased by $1, average occupancy increased 10%, and RevPAR increased by $23 for the twelve months ended June 30, 2025 compared to the twelve months ended June 30, 2024.
The Company had restricted cash of $4,361,000 and $6,914,000 as of June 30, 2024 and 2023, respectively. The Company had marketable securities, net of margin due to securities brokers and obligations for securities sold of $7,266,000 and $15,328,000 as of June 30, 2024 and 2023, respectively. These marketable securities are short-term investments and liquid in nature.
The Company also held marketable securities, net of margin balances, of $969,000, compared to $7,266,000 at June 30, 2024. These marketable securities are short-term and considered readily convertible to cash.
Removed
NEGATIVE EFFECTS OF THE PUBLIC PERCEPTION OF SAN FRANCISCO The San Francisco hospitality community continues to struggle with the perception that the city is plagued with homelessness, open air drug use, dirty streets, rampant crime, and an exodus of business and retail establishments.
Added
MARKET CONDITIONS IN SAN FRANCISCO We continue to monitor the San Francisco lodging market, including changes in business travel, convention activity, tourism, public safety initiatives, and broader economic conditions. Demand trends are influenced by the region’s technology sector, convention and group calendars, and overall macroeconomic conditions.
Removed
While these issues do exist, they are not anywhere near the levels at which people outside of the city believe them to be including those responsible for travel for organizations and individual leisure travelers.
Added
Management evaluates these trends and related uncertainties when planning pricing, sales and marketing, and capital allocation strategies. See “Risk Factors” for a discussion of factors that could adversely affect demand for our Hotel. REAL ESTATE Real estate carried at historical cost; book values may understate economic value. Our consolidated financial statements are prepared in accordance with U.S.
Removed
We know this to be true as our sales team along with the sales team of SF Travel report these concerns as the biggest impact on companies choosing not to bring their events to San Francisco.
Added
GAAP, which requires real estate to be carried at historical cost less accumulated depreciation and, where applicable, impairment. We do not record increases in the fair value of our properties to reflect market conditions or replacement cost. As a result, the carrying values of certain long-held assets may be significantly lower than their estimated market values.
Removed
The city has done a great job of cleaning up the streets and is just getting started on clearing out homeless encampments, that will take time but should help the perception of city to those looking at us as a potential destination.
Added
Management believes the intrinsic value of the Company—driven in part by the long holding periods of many properties and relatively modest mortgage balances on those assets—is not fully reflected in the historical cost basis presented on our balance sheet. These views are qualitative in nature; we have not obtained portfolio-wide third-party appraisals and do not undertake to do so.
Removed
Compounding the issue is a tight Mayoral race in which all the candidates, with the exception of one, the incumbent, are looking to play up these issues in an effort to get them elected by highlighting the shortcomings of the city.
Added
Actual realizable values are subject to market conditions, property-specific factors, transaction costs and taxes, and may differ materially from management’s views. 22 RESULTS OF OPERATIONS As of June 30, 2025, the Company owned approximately 75.9% of the common shares of Portsmouth Square, Inc.
Removed
Many of the positive stories coming out about the city and its recovery, including the explosion of AI and the companies at the forefront of it based out of San Francisco are helping to change the narrative back to one of innovation and the future of technology. 24 RESULTS OF OPERATIONS As of June 30, 2024, the Company owned approximately 75.7% of the common shares of Portsmouth Square, Inc.
Added
Interest expense increased to $13,556,000 for the year ended June 30, 2025, from $12,007,000 for the year ended June 30, 2024, an increase of $1,549,000, primarily due to higher interest costs associated with the Company’s Hotel operations.
Removed
Gain on insurance recovery of $2,692,000 was recorded during fiscal year ended June 30, 2023. The Company incurred interest expense of $12,007,000 and $8,585,000 during fiscal years ended June 30, 2024 and 2023, respectively, or an increase of $3,422,000 primarily as a result of additional interest being incurred in its hotel operation.
Added
The decrease in pre-tax loss for fiscal 2025 compared to fiscal 2024, was primarily attributable to increased hotel room revenues and to the refinancing-related waiver of default interest and forbearance fees from the mezzanine lender.
Removed
The Hotel had an income tax provision expense adjustment of $7,912,000 at June 30, 2023 mainly due to a valuation allowance on our deferred tax assets.
Added
In connection with the March 2025 refinancing, the mezzanine lender waived certain previously accrued default interest and forbearance amounts; the Company recognized a $1.416 million gain on extinguishment of debt in fiscal 2025 in accordance with ASC 405-20. 23 The following tables set forth a more detailed presentation of Hotel operations for the years ended June 30, 2025 and 2024.
Removed
The increase in pre-tax loss during June 30, 2024 over 2023, was as a result of increased operating expenses, increased mortgage interest expense from the 4% default additional interest rate on the senior and mezzanine loans as provided in the Forbearance Agreement entered into with its senior and mezzanine lenders retroactive to January 1, 2024 and an increase in related party accrued interest expense due to a higher balance due Intergroup. 25 The following tables set forth a more detailed presentation of Hotel operations for the years ended June 30, 2024 and 2023.
Added
The portfolio is concentrated, with one investment accounting for a significant majority of the total equity value. Specifically, the Company held common stock of American Realty Investors, Inc. (NASDAQ: ARL), which represented approximately 99% of the total equity investment portfolio as of the reporting date. American Realty Investors, Inc. is included in the REITs and real estate companies industry group.
Removed
As of June 30, 2024, the guestroom renovation was completed. Additionally, 14 guest rooms will be added during fiscal year 2025 to inventory as a result of renovating such rooms which had been repurposed for administrative offices in past years.
Added
Parent Company (InterGroup) — Liquidity and Capital Resources InterGroup’s liquidity is driven primarily by: (i) cash generated by its multifamily and commercial real estate portfolio; (ii) cash and cash equivalents held at the parent; (iii) proceeds from refinancings at InterGroup-owned properties; and (iv) limited amounts of marketable securities.
Removed
However, for the year ended June 30, 2023, an expense of $7,912,000 income tax expense was recorded due to the setup of a valuation allowance on deferred tax assets. 27 MARKETABLE SECURITIES AND OTHER INVESTMENTS As of June 30, 2024 and 2023, the Company had investments in marketable equity securities of $7,454,000 and $18,345,000, respectively.
Added
Key expected uses of cash at the parent include corporate G&A, parent-level income taxes, debt service on InterGroup property-level mortgages, and capital expenditures for its multifamily and other real estate assets.
Removed
(NASDAQ: GOOG), which are included in the REITs and real estate companies and Communication Services, respectively. As of June 30, 2023, the Company’s investment portfolio is diversified with 59 different equity positions. The Company holds one equity security that comprised more than 10% of the equity value of the portfolio.
Added
Parent cash sources and uses for the next twelve months include: ● Real estate operations: Net operating cash flows from apartment and commercial properties, primarily in Texas and Los Angeles County, California. ● Debt service and maturities: Scheduled principal and interest on InterGroup’s property-level mortgages, including recently modified loans in St.
Removed
The three largest security position represent 19%, 4%, and 4% of the portfolio and consists of the common stock of American Realty Investors, Inc. (NASDAQ: ARL), Ouster Inc – Common Stock (NASDAQ: OUST), and Bank Hawaii Corp (NASDAQ: BOH), which are included in the REITs and real estate companies, Financial Services, and Financial Services industry groups, respectively.
Added
Louis (maturity June 5, 2028) and Florence, Kentucky (maturity January 2035).
Removed
On December 16, 2020, Justice and InterGroup entered into a loan modification agreement which increased Justice’s borrowing from InterGroup as needed up to $10,000,000 and extended the maturity date of the loan to July 31, 2021. As of the date of this report, the maturity date was extended to July 31, 2025.
Added
InterGroup evaluates additional refinancing opportunities to optimize liquidity and interest costs. ● Capital expenditures: Routine unit turns and building systems maintenance; larger discretionary projects are prioritized based on expected returns and market conditions. ● Investments and other: Limited marketable securities activity; InterGroup may opportunistically recycle capital via selective asset sales or refinancings, subject to market conditions.
Removed
Upon the dissolution of Justice in December 2021, Portsmouth assumed Justice’s note payable to InterGroup in the amount of $11,350,000. On December 31, 2021, Portsmouth and InterGroup entered into a loan modification agreement which increased Portsmouth’s borrowing from InterGroup as needed up to $16,000,000.
Added
InterGroup also provides liquidity to Portsmouth through an unsecured related-party revolving credit facility (see “Related Party Credit Facility – InterGroup”). The availability of this facility depends on InterGroup’s own cash, cash flows from operations, and financing capacity. If InterGroup’s liquidity were to be constrained, Portsmouth’s ability to draw on the facility could be limited.
Removed
In July 2023, Portsmouth and InterGroup entered into a new loan modification agreement which increased Portsmouth’s borrowing from InterGroup up to $20,000,000. In March 2024, Portsmouth and InterGroup entered in a loan modification agreement which increased Portsmouth’s borrowing amount to $30,000,000. Portsmouth agreed to a 0.5% loan modification fee for the increased borrowing of $10,000,000 payable to InterGroup.
Added
InterGroup’s Board (or Audit Committee) oversees related-party transactions in accordance with the Company’s policies and applicable SEC rules. In February 2025, the Company initiated a plan to dispose of a non-core 12-unit multifamily property in Los Angeles and commenced active marketing in April 2025. The property was classified as held for sale at June 30, 2025.
Removed
During the fiscal year ending June 30, 2024 and 2023, InterGroup advanced to the Hotel $10,793,000 and $1,500,000, respectively, bringing the total amounts due to InterGroup were $26,493,000 and $15,700,000 as of June 30, 2024 and 2023. Portsmouth has not made any paid-downs to its note payable to InterGroup.
Added
If completed, the sale would provide additional liquidity; the Company currently expects to use any net proceeds for general corporate purposes, which may include debt reduction, reinvestment in the real estate portfolio, and working capital. There is no assurance as to the timing, terms, or completion of the transaction.
Removed
The term of the loan is approximately 7 years with interest rate at 7.60%. During the fiscal year ending June 30, 2023, the Company completed the refinancing on our St. Louis, Missouri property $4.9 million loan and obtain a $5,360,000 new two-year loan at a floating interest rate of 3.1% over the cap 5.5% SOFR.
Added
In the ordinary course of portfolio management, we may selectively dispose of non-core assets or recycle capital where we believe market pricing is attractive. Any such activity will depend on prevailing market conditions, property-level performance, tax consequences, and our capital allocation priorities. We can provide no assurance as to the timing, pricing, or completion of any disposition. Nasdaq Listing Compliance.
Removed
We are currently evaluating other refinancing opportunities and we could refinance additional multifamily properties should the need arise, or should management consider the interest rate environment favorable. On April 27, 2020, InterGroup entered into a loan agreement (“SBA Loan - InterGroup”) with CIBC Bank USA under the CARES Act and received loan proceeds in the amount of $453,000.
Added
As discussed under Item 1A and Item 5, in July 2025 the Nasdaq Hearings Panel granted the Company an extension through September 30, 2025 to regain compliance with Nasdaq Listing Rule 5550(b)(2) (minimum MVLS). On September 17, 2025, the Company received confirmation from Nasdaq that the Company has regained compliance with Listing Rule 5550(b)(2).
Removed
As of March 31, 2021, InterGroup had used all of the $453,000 loan proceeds in qualified payroll expenses. The SBA Loan – InterGroup was scheduled to mature on April 27, 2022 and had a 1.00% interest rate. The SBA Loans are subject to the terms and conditions applicable to loans administered by the U.S.
Added
Nasdaq’s notice stated that, as of September 15, 2025, the Company had demonstrated 11 consecutive business days with a market value of listed securities above $35 million, thereby satisfying the requirement. As a result, the Panel granted the Company’s request for continued listing, and the matter is now closed.
Removed
Small Business Administration under the CARES Act. If the SBA approves the forgiveness amount, all payments of principal and interest are deferred until the date the forgiveness amount is remitted by the SBA to CIBC. If the SBA does not forgive any amount of the loan, payments would start within 30 days.
Added
Related Party Credit Facility – InterGroup Portsmouth maintains an unsecured related-party revolving credit facility with its parent company, InterGroup, for contingency liquidity purposes; however, as of the date of this report Hotel operations have been self-funded and no incremental draws have been required to support operating needs.
Removed
All unforgiven portion of the principal and accrued interest will be due at maturity. In March of 2021 the SBA had forgiven the full $453,000 of the SBA Loan. In February 2024 InterGroup repaid the loan after an eligibility investigation took place concluding the type of business was ineligible for the loan.
Added
The facility, originally entered into in 2014 and subsequently modified, has undergone several amendments since inception.
Removed
The repayment of the SBA loan has been recorded as a loss on extinguishment of debt in the condensed consolidated statements of operations for the year ended June 30, 2024. 29 Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating and other expenditures, including management and franchise fees, corporate expenses, payroll and related costs, taxes, interest and principal payments on our outstanding indebtedness, and repairs and maintenance of the Hotel.
Added
Key modifications include: ● December 2021: Portsmouth assumed $11.35 million in outstanding debt upon the dissolution of Justice Investors L.P. ● July 2023: Increased available borrowings to $20,000,000 and extended maturity to July 31, 2025 with a 0.5% loan modification fee. ● March 2024: Increased available borrowings to $30,000,000 with a 0.5% loan modification fee ● March 2025: Further increased available borrowing capacity to $40,000,000 and extended the maturity to July 31, 2027. ● May 2025: Reduction of interest rate from 12% to 9%.
Removed
Our long-term liquidity requirements primarily consist of funds necessary to pay for scheduled debt maturities and capital improvements of the Hotel and our real estate properties. We will continue to finance our business activities primarily with existing cash, including from the activities described above, and cash generated from our operations.

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