Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 43

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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 extension and modification fee payable to InterGroup.
In March 2024, Portsmouth and InterGroup entered into 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. As
of June 30, 2024, the balance of the loan was $26,493,000 net of loan amortization costs of zero. As of December 31, 2024, the balance
of the loan was $27,622,000 and the Company has not made any paid-downs to its note payable to InterGroup. All material intercompany
accounts and transactions have been eliminated in consolidation.

In
December 2024, the Company refinanced mortgage on its 157-unit apartment located in Florence, Kentucky in the amount of $9,800,000. The
term of the loan is approximately 10 years with an interest rate at 5.40%. The loan matures in January 2035.

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.

-26-

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. The objectives of our cash management policy are to increase
existing leverage levels and the availability of liquidity, while minimizing operational costs. However, there can be no guarantee that
management will be successful with its plan.

Going
Concern

The
condensed consolidated financial statements of Portsmouth have been prepared on a going concern basis, which assumes the realization
of assets and the satisfaction of liabilities in the normal course of business. However, as of December 31, 2024, certain factors raise
substantial doubt about Portsmouth’s ability to continue as a going concern within one year after the issuance of these financial
statements.

As
disclosed in Note 9 – Related Party and Other Financing Transactions, Portsmouth has a senior mortgage loan and a mezzanine loan
totaling $100,289,000, which matured on January 1, 2024. On