Company: INTG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010724
Chunk: 12

Company: INTERGROUP CORP
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 to a Franchise
License Agreement with HLT Franchise Holding LLC (“Hilton”) through January 31, 2030.

In
connection with the refinancing of the Hotel on March 28, 2025, the Company formed Justice Pledgor, LLC, a Delaware limited liability
company (“Pledgor”), which became the sole member of Operating. Mezzanine is the sole member of Pledgor.

The
Hotel is managed by Aimbridge Hospitality (“Aimbridge”) under a hotel management agreement (“HMA”) effective
February 3, 2017. The HMA has an initial term of ten years, automatically renewable for up to five additional one-year terms, subject
to certain conditions. Under the agreement, Aimbridge receives a base management fee equal to 1.70% of total Hotel revenue. Aimbridge
is also entitled to an annual incentive fee equal to 10% of the amount by which current-year Gross Operating Profit exceeds the prior
year’s Gross Operating Profit.

    -8-

However,
following discussions with Aimbridge regarding the impact of the COVID-19 pandemic on incentive fee eligibility, the parties agreed that
no incentive fees were payable for fiscal years 2019 through 2023. Specifically, Aimbridge agreed to waive $1,030,134 in previously recorded
incentive fees, and both parties established a performance threshold of $15,257,301 in earnings before interest, taxes, depreciation,
and amortization (“EBITDA”) for future incentive fee eligibility. As a result, the company recorded a reduction in Hotel
operating expenses of $1,030,134 for the nine months period ended March 31, 2025.

In
addition to the operations of the Hotel, the Company also generates income from the ownership of real estate. Properties include apartment
complexes, commercial real estate, and three single-family houses as strategic investments. The properties are located throughout the
United States but are concentrated in Texas and Southern California. The Company also has investments in unimproved real property. All
the Company’s residential rental properties and its commercial rental property are managed in-house.

There
have been no material changes to the Company’s significant accounting policies during the nine months ended March 31, 2025. Please
refer to the Company’s Annual Report on Form 10-K for the year ended June 30, 2024 for a summary of the significant accounting
policies.

Recently
Issued and Adopted Accounting Pronouncements