Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 57

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 57
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 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, crime, etc., have caused the City of San Francisco to be one of the slowest cities in the country to fully recover
from the COVID-19 pandemic. Additionally, since San Francisco is a top-heavy tech company city, the “remote work” initiatives
have caused a slowdown in business travel and in person meetings. Prior to the COVID-19 pandemic, our Hotel enjoyed most of its revenues
from business travel, conventions, self-contained groups, etc., and post pandemic, most revenues are generated from leisure travel which
is generally at a lower guest room rate. For the six months ended December 31, 2024, our net cash flow provided by operations was $2,579,000.
We have taken several steps to preserve capital and increase liquidity at our Hotel, including implementing strict cost management measures
to eliminate non-essential expenses, renegotiating certain reoccurring expenses, and temporarily closing certain hotel services and outlets.
As the hospitality and travel environment continues to recover, Portsmouth will continue to evaluate what services we bring back. During
the six months ended December 31, 2024, Portsmouth continued