Company: INTG
Filing Date: 2025-09-30
Form Type: 10-K
Source: 0001493152-25-016154
Chunk: 25

Company: INTERGROUP CORP
Filing Date: 2025-09-30
Form: 10-K
Item: Item 1
Chunk 25
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, and representations and warranties. On January 3, 2025, Justice Operating
Company, LLC (“Operating”) received a Notice of Termination from the Mortgage Lender, citing a termination event for failure
to repay the debt by the forbearance expiration. On January 14, 2025, the Mezzanine Lender issued a Notice of Default to Justice Mezzanine
Company, LLC (“Mezzanine”), asserting its rights to pursue all remedies under the agreement. These defaults were the primary
contributors to Portsmouth’s substantial doubt assessment under ASC 205-40, as disclosed in Note 2 – Liquidity.

C.
Debt Refinancing Completed on March 28, 2025

On
January 21, 2025, Operating executed a non-binding term sheet with Prime Finance (“Prime”) for a new senior loan. On March
28, 2025, Operating closed on a senior mortgage loan and Mezzanine closed on a modified mezzanine loan (collectively, the “Loan
Agreements”), fully retiring the prior debt with U.S. Bank and CRED REIT Holdco LLC. The refinancing resulted in an increase in
overall leverage of approximately $1.0 million.

●Mortgage
                                            Loan: Operating entered into a $67,000,000 Mortgage Loan Agreement with Prime. The loan bears
                                            interest at Term SOFR + 4.75%, with a Term SOFR cap of 4.50%, and is interest-only through
                                            maturity. Matures April 9, 2027, with three one-year extension options, subject to satisfaction
                                            of financial and operational covenants. The Interest Rate Cap caps limits Term SOFR to 4.50%
                                            and has a notional amount equal to or greater than the outstanding principal balance of the
                                            loan. The Company paid a premium of approximately $136,000 for the cap at inception. The
                                            loan is secured by the Hotel.

●Mezzanine
                                            Loan: Mezzanine executed a modified Mezzanine Loan Agreement with CRED REIT Holdco LLC for
                                            a principal amount of $36,300,000 at a fixed rate of 7.25% per annum, on matching maturity
                                            and extension terms to the senior loan. The loan modifications were material in nature and
                                            therefore the transaction under ASC 470-50 accounted for as an extinguishment. The loan is
                                            secured by Mezzanine’s membership interest