Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 12

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 the loan and foreclosure on the collateral. Similarly,
on January 14, 2025, the mezzanine lender issued a Notice of Default, stating that the forbearance had expired and that it, too, was
entitled to exercise all available legal and contractual remedies.

Despite
these challenges, Portsmouth and the Company (the “Companies) have made significant progress toward refinancing its existing debt.
On January 21, 2025, the Companies executed a non-binding term sheet with Prime Finance to refinance the senior mortgage loan and received
and accepted new terms from its current mezzanine lender, CRED Reit Holdco LLC. The Companies are in advanced discussions with both lenders
and believe that, based on the progress of negotiations, refinancing will be successfully completed by March 2025. While no absolute
assurance can be provided, the Companies remain highly focused on finalizing the transaction. Additionally, it is in discussions with
its existing lenders regarding a potential extension of the current debt terms, should more time be required.

Throughout
the term of the debt, Portsmouth has consistently made all required mortgage payments on time, and as of December 31, 2024, there were
no delinquent amounts due under either the senior or mezzanine loans. Operationally, Portsmouth has successfully completed major renovations
over the past two years, upgrading all guest rooms, public spaces, fitness center, corridors, and meeting spaces. The final phase of
the lobby renovation, including the Grab and Go Market, is expected to be completed in the quarter ending March 31, 2025, along with
the return of 14 additional guest rooms to active inventory.

    -9-

While
Portsmouth remains on track to complete the refinancing of the Hotel, failure to close the transaction as expected, secure alternative
financing, or obtain an extension of current loan terms could materially impact Portsmouth’s ability to meet its obligations. As
a result, substantial doubt remains regarding Portsmouth’s ability to continue as a going concern for one year following the issuance
of these financial statements.

The
condensed consolidated financial statements do not include any adjustments that might result from this uncertainty.

NOTE
2 - LIQUIDITY

Historically,
our cash flows have been primarily generated from our Hotel and real estate operations. However, the current state of affairs of the
City of San Francisco, its political challenges as well as the way its local government’s policies with regard to safety, drug
abuse, homelessness,