Company: INTG
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021858
Chunk: 52

Company: INTERGROUP CORP
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 52
---
 Effective June 2016, Mr. Winfield became the Managing Director of Justice and served in that position
until the dissolution of Justice in December 2021. Depending on certain market conditions and various risk factors, the Chief Executive
Officer and Portsmouth may, at times, invest in the same companies in which the Company invests. Such investments align the interests
of the Company with the interests of related parties because it places the personal resources of the Chief Executive Officer and the
resources of Portsmouth, at risk in substantially the same manner as the Company in connection with investment decisions made on behalf
of the Company.

NOTE
12 – MORTGAGE NOTES PAYABLE AND MEZZANINE FINANCING

For
management’s going-concern evaluation under ASC 205-40 (prior conditions/events, actions taken, assessment outcome, and risks),
see Note 1 – Basis of Presentation (Going Concern).

A.
Mortgage and Mezzanine Loan History

In
December 2013, Justice Investors Limited Partnership (“Justice”), then a consolidated subsidiary of Portsmouth Square, Inc.,
obtained a $97,000,000 senior mortgage loan (fixed 5.275%) and a $20,000,000 mezzanine loan (fixed 9.75%) to fund the redemption of limited
partnership interests and repay a prior $42,940,000 mortgage loan. The senior loan required interest-only payments through January 2017,
then amortized on a 30-year schedule to maturity on January 1, 2024.

The
mezzanine loan was secured by the membership interests of Justice Operating Company, LLC (“Operating”) held by Justice Mezzanine,
LLC (“Mezzanine”) and was subordinated to the senior mortgage. In July 2019, the mezzanine loan was refinanced with CRED
REIT Holdco LLC (“Mezzanine Lender”) at $20,000,000 fixed 7.25%, co-term with the senior loan (maturity January 1, 2024).

As
of June 30, 2024, the outstanding mortgage loan balance was $76,962,000. As of December 31, 2024, the outstanding balance was $75,789,000.

B.
Forbearance Agreements and Defaults Notices (2024-January 2025)

On
April 29, 2024, the Company entered into forbearance agreements, effective through January 1, 2025,