Company: INTG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010724
Chunk: 45

Company: INTERGROUP CORP
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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 and tax obligations,

●Interest
                                            payments and required loan maintenance under both senior and mezzanine debt agreements, and

●Routine
                                            repair and maintenance capital expenditures at the Hotel.

Long-term
liquidity requirements include:

●Scheduled
                                            debt maturities, including those disclosed in Note 11, and

●Capital
                                            improvements to maintain the competitiveness and operational standards of the Hotel under
                                            its Hilton franchise agreement.

The
Company intends to meet these obligations using a combination of:

●Available
                                            cash on hand,

●Operating
                                            cash flows,

●Draws
                                            under the InterGroup credit facility, and

●Other
                                            potential financing or equity alternatives.

Management’s
Liquidity Assessment

As
further discussed in Note 2 – Liquidity, the Company has taken proactive steps to stabilize its liquidity profile, including:

●Completion
                                            of a refinancing of its senior and mezzanine debt in March 2025,

●Continuing
                                            cost controls and selective capital expenditure deferrals,

●Strategic
                                            use of related party financing, and

●Maintenance
                                            of a lender-controlled lockbox cash management system.

While
management believes that current liquidity sources and available borrowing capacity will be sufficient to support near-term working capital
needs—even in the event of continued pressure on hotel performance indicators such as occupancy and RevPAR—there can be no
assurance that unforeseen market or operational conditions will not adversely affect the Company’s liquidity position.

The
Company continues to evaluate strategic alternatives and operational adjustments in response to ongoing macroeconomic and market-specific
challenges in San Francisco’s hospitality sector.

Going
Concern

The
condensed consolidated financial statements of Portsmouth for the quarter ended March 31, 2025, have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. However,
as described below, certain conditions and events raise substantial doubt about Portsmouth’s ability to continue as a going concern
within one year following the issuance of these financial statements.

As
of March 31, 2025, Portsmouth had outstanding obligations under a senior mortgage loan and mezzanine loan that had previously matured
on January 1, 2024, with an aggregate principal balance of $100.3 million. Following the maturity date, Portsmouth received default notices
from both the senior loan servicer, LNR Partners, LLC, and the mezzanine lender, CRED Reit Holdco LLC