Company: INTG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010724
Chunk: 58

Company: INTERGROUP CORP
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 58
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 forbearance agreements with both lenders on April 29,
2024, which extended the maturity date to January 1, 2025, providing time to pursue a long-term refinancing solution. Upon the expiration
of the forbearance period in January 2025, both lenders issued default notices.

On
March 28, 2025, Portsmouth successfully refinanced its senior mortgage loan through a new $67.0 million agreement with PRIME Finance.
The new loan bears interest at a floating rate equal to the 30-day Secured Overnight Financing Rate (“SOFR”) plus 4.75%,
subject to an interest rate cap limiting SOFR to a maximum of 4.50% and provides for an initial two-year term with three successive one-year
extension options, subject to satisfaction of certain conditions. Concurrently, Portsmouth entered into a modification of the mezzanine
loan agreement, which provides for a $36.3 million principal balance at a fixed rate of 7.25% per annum, with maturity and extension
terms aligned with the senior loan.

The
successful completion of these refinancing transactions represents a significant step in enhancing Portsmouth’s financial flexibility
and addressing its near-term liquidity requirements. Since the refinancing, Portsmouth has remained current on all required debt service
payments. Additionally, Portsmouth has invested in extensive property improvements, including guest room, public area, and common space
renovations, which are expected to enhance the asset’s competitiveness and support revenue growth.

Nevertheless,
Portsmouth continues to operate in a challenging environment, particularly in the San Francisco market, which is characterized by elevated
interest rates, reduced business travel demand, and increased labor costs. While management is actively managing these headwinds, including
through cost control initiatives and revenue optimization strategies, these factors continue to impact operating performance.

    -9-

Management
believes the refinancing completed in March 2025, along with ongoing operational initiatives and forecasted performance improvements,
provide a viable path to meet Portsmouth’s obligations over the next twelve months. However, Portsmouth’s ability to continue
as a going concern will depend on its ability to achieve forecasted cash flows, maintain compliance with financial covenants, and secure
additional financing or extensions if necessary at or before the extended loan maturities. These conditions, while mitigated by Portsmouth’s
recent actions and current plans, continue to raise substantial doubt about the Portsmouth’s ability to continue as a going concern
within one year after the issuance of these financial statements.

Accordingly