Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 11

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 the six months ended December 31, 2024. 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

Our
Annual Report on Form 10-K for the year ended June 30, 2024, filed with the SEC on September 30, 2024, contains a discussion on the recently
issued accounting pronouncements. As of December 31, 2024, there was no material impact from the recent adoption of new accounting pronouncements,
nor expected material impact from recently issued accounting pronouncements yet to be adopted, on the Company’s condensed consolidated
financial statements.

Going
Concern

The
condensed consolidated financial statements of Portsmouth have been prepared on a going concern basis, which assumes the realization
of assets and the satisfaction of liabilities in the normal course of business. However, as of December 31, 2024, certain factors raise
substantial doubt about Portsmouth’s ability to continue as a going concern within one year after the issuance of these financial
statements.

As
disclosed in Note 9 – Related Party and Other Financing Transactions, Portsmouth has a senior mortgage loan and a mezzanine loan
totaling $100,289,000, which matured on January 1, 2024. On January 3, 2024, Portsmouth received a Notice of Default from the senior
loan special servicer, LNR Partners, LLC, and on January 14, 2024, a Notice of Default from the mezzanine lender, CRED Reit Holdco LLC,
regarding the matured loans. These notices grant the lenders various rights and remedies, including but not limited to acceleration of
the debt and foreclosure on collateral.

To
address the maturity issue, on April 29, 2024, Portsmouth entered into forbearance agreements with both its senior and mezzanine lenders,
extending the maturity date to January 1, 2025, while actively pursuing long-term refinancing solutions. However, on January 3, 2025,
Portsmouth received a Notice of Termination from the senior loan special servicer, citing a termination event due to Portsmouth’s
failure to fully repay the debt by the forbearance expiration date. As a result, the forbearance agreement was terminated, allowing the
lender to immediately exercise all rights and remedies, including acceleration of