Company: INTG
Filing Date: 2025-09-30
Form Type: 10-K
Source: 0001493152-25-016154
Chunk: 14

Company: INTERGROUP CORP
Filing Date: 2025-09-30
Form: 10-K
Item: Item 1
Chunk 14
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 substantial debt service obligations. Our substantial debt may negatively affect our business and operations in several ways, including:
requiring us to use a substantial portion of our funds from operations to make required payments on principal and interest, which will
reduce funds available for operations and capital expenditures, future business opportunities and other purposes; making us more vulnerable
to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; limiting
our flexibility in planning for, or reacting to, changes in the business and the industry in which we operate; placing us at a competitive
disadvantage compared to our competitors that have less debt; limiting our ability to borrow more money for operations, capital or to
finance acquisitions in the future; and requiring us to dispose of assets, if needed, in order to make required payments of interest
and principal. In addition, increases in interest rates, changes in credit market conditions, or a downgrade of our creditworthiness
could increase our borrowing costs or limit our access to additional financing. If we are unable to refinance existing debt on acceptable
terms or at all, we may need to reduce or delay capital expenditures, asset improvements, or strategic initiatives, which could negatively
affect our competitive position and financial performance.

Limited
guaranties and “springing recourse” events under the Hotel financing could expose InterGroup or Portsmouth to liability.

The
Hotel’s senior mortgage and amended mezzanine loans are generally non-recourse to the borrower subsidiaries, except for customary
non-recourse carve-outs (e.g., fraud, willful misconduct, misapplication of funds, certain prohibited transfers, and environmental indemnities)
and specified “springing recourse” events. Portsmouth and InterGroup have provided limited guaranties of these recourse obligations.
While no such events have occurred as of June 30, 2025, the occurrence of a defined recourse event could increase our exposure and have
a material adverse effect on liquidity or financial condition.

Our
business model involves high fixed costs, including property taxes and insurance costs, which we may be unable to adjust in a timely
manner in response to a reduction in our revenues.

The
costs associated with owning and operating the Hotel are significant. Some of these costs (such as property taxes and insurance costs)
are fixed, meaning that such costs may not be altered in a timely manner in response to changes in demand for services. Failure to adjust
our expenses may adversely affect our business and results of operations. Our real property taxes may increase as property