Company: INTG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010724
Chunk: 59

Company: INTERGROUP CORP
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 59
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,
the accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this
uncertainty.

NOTE
2 - LIQUIDITY

Historically,
the Company has relied primarily on cash flows generated from operations at its hotel property, the Hilton San Francisco Financial District
(the “Hotel”), as its primary source of liquidity. However, the pace of recovery in the San Francisco hospitality market
remains slower than anticipated due to several factors, including a sustained decline in business travel driven by remote work trends,
as well as broader municipal challenges such as safety concerns, homelessness, and increased crime. These conditions have limited demand
in key customer segments and shifted the Hotel’s revenue base toward lower-yielding leisure travel.

As
a result, the Company experienced net cash provided for operating activities of $1,725,000 for the nine months ended March 31, 2025.
In response to ongoing market pressures, Portsmouth has adopted several capital preservation initiatives, including deferral of non-essential
capital projects, temporary suspension of certain Hotel services, renegotiation of vendor agreements, and reduction of controllable operating
expenses. During the nine months ended March 31, 2025, Portsmouth continued to invest in property enhancements, incurring capital expenditure
of $912,000. During the same period, the Company made capital improvements in the amount of $1,329,000 to its multi-family and commercial
real estate.

As
of March 31, 2025, the Company had:

●Cash
                                            and cash equivalents of $4,017,000 (compared to $4,333,000 as of June 30, 2024),

●Restricted
                                            cash of $9,377,000 (compared to $4,361,000 as of June 30, 2024), and

●Marketable
                                                                                                                                                                                                                                                                                    securities, net of margin balances, of $751,000 (compared to $7,266,000 as of June 30, 2024). These securities are considered liquid
                                                                                                                                                                                                                                                                                    and available for short-term needs.

Related
Party Financing

To
supplement its liquidity position, the Company maintains access to an unsecured loan facility with its subsidiary company, Portsmouth
Square, Inc (“Portsmouth”), a related party. The initial facility, dated July 2, 2014, has undergone several amendments.
In March 2025, the facility was amended to:

●Increase
                                            the available borrowing capacity to $40,