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

Company: INTERGROUP CORP
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 11
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-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 training to
accounting personnel; and (iv) engage an external technical accounting resource to assist with complex or non-routine equity transactions
until internal expertise is fully established. Management will monitor the effectiveness of these actions and will consider the material
weakness remediated when the enhanced controls operate for a sufficient period and are tested successfully.

CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING 

There
were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2025 that have
materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

-28-

PART
II.

OTHER
INFORMATION

Item
1. LEGAL PROCEEDINGS

Portsmouth
Square, Inc., through Justice Investors Operating Company, LLC (the “Company”), owns the real property at 750 Kearny Street
in San Francisco, which is improved with a 27-story building that houses a Hilton-branded hotel (the “Property”). In connection
with City approvals in the early 1970s, the Company constructed an ornamental overhead pedestrian bridge spanning Kearny Street to the
City’s Portsmouth Square park and underground garage (the “Bridge”), pursuant in part to a Major Enc