Company: INTG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010724
Chunk: 78

Company: INTERGROUP CORP
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 78
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 contributors to Portsmouth’s substantial doubt assessment under ASC 205-40, as disclosed in Note 2 –
Liquidity.

    -19-

C.
Debt Refinancing Completed on March 28, 2025

On
January 21, 2025, Portsmouth executed a non-binding term sheet with Prime Finance (“Prime”) for a new senior loan. On March
28, 2025, Portsmouth closed on both a senior mortgage loan and modified mezzanine loan (collectively, the “Loan Agreements”),
fully retiring the prior debt with U.S. Bank and CRED REIT Holdco LLC.

●Mortgage
                                            Loan: Operating entered into a $67,000,000 Mortgage Loan Agreement with Prime. The loan bears
                                            interest at SOFR + 4.75%, with a SOFR cap of 4.50%, and matures in two years with three one-year
                                            extension options, subject to satisfaction of financial and operational covenants. The Interest Rate Cap caps Term SOFR at 4.50% and has a notional amount
equal to or greater than the outstanding principal balance of the loan. The Company paid a premium of approximately $136,000 for the cap
at inception. The loan
                                            is secured by the Hotel.

●Mezzanine
                                            Loan: Mezzanine executed a modified Mezzanine Loan Agreement with CRED REIT Holdco LLC for
                                            a principal amount of $36,300,000 at a fixed rate of 7.25% per annum, on matching terms to
                                            the senior loan. The loan is secured by Mezzanine’s membership interest in Operating.

Portsmouth
and the Company continue to provide a limited guaranty in connection with both facilities. The Company is also subject to customary
covenants, including financial ratios and affirmative obligations.

D.
DSCR and Lockbox Arrangements

Operating
has not maintained compliance with the required Debt Service Coverage Ratio (“DSCR”) under both the original and refinanced
loans. This condition ordinarily triggers a lender-imposed cash management lockbox. However, such a lockbox mechanism was in place from
inception, and remains in effect through loan maturity, regardless of DSCR performance. Cash receipts from the Hotel are deposited into
lender-controlled accounts, with controlled disbursements based on agreed-upon budget approvals.

E.
Governance and Related Party Disclosure

All
of Portsmouth’s directors serve as directors of InterGroup —