Company: INTG
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021858
Chunk: 104

Company: INTERGROUP CORP
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 104
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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. The determination of fair value involves a number of significant
estimates. We use the Black Scholes option pricing model to estimate the value of employee stock options which requires a number of assumptions
to determine the model inputs. These include the expected volatility of our stock and employee exercise behavior which are based on historical
data as well as expectations of future developments over the term of the options.

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Item
3. Quantitative and Qualitative Disclosures about Market Risk

We
are a “smaller reporting company” and therefore we are not required to provide information required by this Item.

Item
4. Controls and Procedures.

EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES

The
Company’s management, with the participation of the Company’s Chief Executive Officer and Principal Financial Officer, evaluated
the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report
on Form 10-Q. Based upon that evaluation, management concluded that the Company’s disclosure controls and procedures were not effective
due to a material weakness in internal control over financial reporting.

A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is
a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected
on a timely basis. Management identified a material weakness related to the design and operation of controls over the interpretation
and accounting for stock compensation.

In
light of this material weakness, management performed additional analysis and other procedures to ensure the financial statements this
Form 10-Q are prepared in conformity with U.S. GAAP. Management believes the financial statements included in this report present fairly,
in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented.

Management
is in the process of remediating the material weakness and plans to: (i) formalize and implement a comprehensive stock-based compensation
accounting policy, including grant-date measurement, modification accounting, and related income-tax effects; (ii) enhance review controls
over the classification and valuation of awards, supported by a documented checklist and calendar; (iii) provide targeted