UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C. 20549

                                 FORM 10-Q

 [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2010

 [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _____

Commission File Number: 0-4057


                          PORTSMOUTH SQUARE, INC.
                          -----------------------
           (Exact name of registrant as specified in its charter)


          CALIFORNIA                                           94-1674111
 ------------------------------                            ------------------
(State or other jurisdiction of                           (IRS Employer
 incorporation or organization)                            Identification No.)


    10940 Wilshire Blvd., Suite 2150, Los Angeles, California       90024
    ---------------------------------------------------------     --------
          (Address of principal executive offices)               (Zip Code)

                                 (310) 889-2500
                          -----------------------------
                         (Registrant's telephone number)


Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.  [x] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

   Large accelerated filer [ ]                 Accelerated filer [ ]

   Non-accelerated filer   [ ]                 Smaller reporting company [x]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.)   [ ] Yes [x] No

The number of shares outstanding of issuer's Common Stock, as of February 9,
2011, was 734,183.

<PAGE>

                                     INDEX

                             PORTSMOUTH SQUARE, INC.


PART I. FINANCIAL INFORMATION                                            PAGE

Item 1. Condensed Consolidated Financial Statements

 Condensed Consolidated Balance Sheets
  As of December 31, 2010(Unaudited) and June 30, 2010                    3

 Condensed Consolidated Statements of Operations (Unaudited)
  For the Three Months ended December 31, 2010 and 2009                   4

 Condensed Consolidated Statements of Operations (Unaudited)
  For the Six Months ended December 31, 2010 and 2009                     5

 Condensed Consolidated Statements of Cash Flows (Unaudited)
  For the Six Months ended December 31, 2010 and 2009                     6

 Notes to Condensed Consolidated Financial Statements (Unaudited)         7

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                              15

Item 4. Controls and Procedures                                          26


PART II. OTHER INFORMATION

Item 6. Exhibits                                                         26


SIGNATURES                                                               27

                                    -2-
<PAGE>

                                     PART 1
                              FINANCIAL INFORMATION

Item 1 - Condensed Consolidated Financial Statements

<TABLE>
                             PORTSMOUTH SQUARE, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS

                                                  December 31, 2010       June 30, 2010
                                                      (Unaudited)
                                                  ------------------      -------------
<S>                                                     <C>                <C>
Assets:
  Investment in hotel, net                              $ 32,297,000       $ 33,708,000
  Investment in real estate                                  973,000            973,000
  Investment in marketable securities                      5,550,000          2,323,000
  Other investments, net                                   6,137,000          2,513,000
  Cash and cash equivalents                                  588,000            522,000
  Accounts receivable, net                                 1,340,000          1,573,000
  Other assets, net                                        2,254,000          1,561,000
  Deferred tax asset                                       2,869,000          4,891,000
                                                        ------------       ------------
Total assets                                            $ 52,008,000       $ 48,064,000
                                                        ============       ============

Liabilities and Shareholders' Deficit

Liabilities:
  Accounts payable and other liabilities                $  6,853,000       $  7,763,000
  Due to securities broker                                 2,214,000            226,000
  Obligations for securities sold                                  -             79,000
  Other notes payable                                      3,593,000          3,688,000
  Mortgage notes payable                                  45,590,000         45,990,000
                                                        ------------       ------------
Total liabilities                                         58,250,000         57,746,000
                                                        ------------       ------------

Commitments and contingencies

Shareholders' deficit:

  Common stock, no par value; 750,000 authorized shares;
   734,183 shares issued and outstanding                   2,092,000          2,092,000
  Additional paid-in capital                                 916,000            916,000
  Accumulated deficit                                        333,000         (2,860,000)
                                                        ------------       ------------
  Total Portsmouth shareholders' equity                    3,341,000            148,000
  Noncontrolling interest deficit                         (9,583,000)        (9,830,000)
                                                         ------------       ------------
Total shareholders' deficit                               (6,242,000)        (9,682,000)
                                                        ------------       ------------
Total liabilities and shareholders' deficit             $ 52,008,000       $ 48,064,000
                                                        ============       ============
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                    -3-
<PAGE>
<TABLE>

                             PORTSMOUTH SQUARE, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

For the three months ended December 31,              2010           2009
                                                  ----------     ----------
<S>                                              <C>            <C>
Revenue - hotel                                  $ 9,142,000    $ 8,368,000
                                                  ----------     ----------
Costs and operating expenses:
 Hotel operating expenses                         (6,816,000)    (6,543,000)
 Depreciation and amortization expense            (1,210,000)    (1,199,000)
 General and administrative expense                 (150,000)      (150,000)
                                                  ----------     ----------
Total costs and operating expenses                (8,176,000)    (7,892,000)
                                                  ----------     ----------
Income from operations                               966,000        476,000
                                                  ----------     ----------
Other income(expense):
 Interest expense                                   (713,000)      (729,000)
 Net gain(loss) on marketable securities           1,395,000        (18,000)
 Net unrealized gain on other investments          3,823,000         85,000
 Impairment loss on other investments               (113,000)      (334,000)
 Dividend and interest income                        160,000         20,000
 Trading and margin interest expense                 (68,000)       (85,000)
                                                  ----------     ----------
Total other income(expense), net                   4,484,000     (1,061,000)
                                                  ----------     ----------

Income(loss) before income taxes                   5,450,000       (585,000)
Income tax (expense)benefit                       (2,063,000)       202,000
                                                  ----------     ----------
Net income(loss)                                   3,387,000       (383,000)
Less: Net (income)loss attributable to the
 noncontrolling interest                            (154,000)        87,000
                                                  ----------     ----------
Net income(loss) attributable to Portsmouth      $ 3,233,000    $  (296,000)
                                                  ==========     ==========

Basic and diluted income(loss) per share
 attributable to Portsmouth                      $      4.40    $     (0.40)
                                                  ==========     ==========
Weighted average number of common shares
 Outstanding                                         734,183        734,183
                                                  ==========     ==========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                    -4-
<PAGE>

                            PORTSMOUTH SQUARE, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

For the six months ended December 31,                2010           2009
                                                  ----------     ----------
Revenue - hotel                                  $18,668,000    $16,898,000
                                                  ----------     ----------
Costs and operating expenses:
 Hotel operating expenses                        (14,133,000)   (13,419,000)
 Depreciation and amortization expense            (2,448,000)    (2,331,000)
 General and administrative expense                 (276,000)      (274,000)
                                                  ----------     ----------
Total costs and operating expenses               (16,857,000)   (16,024,000)
                                                  ----------     ----------
Income from operations                             1,811,000        874,000
                                                  ----------     ----------
Other income(expense):
 Interest expense                                 (1,416,000)    (1,442,000)
 Net gain(loss) on marketable securities           1,333,000       (796,000)
 Net unrealized gain on other investments          3,837,000         85,000
 Impairment loss on other investments               (197,000)      (334,000)
 Dividend and interest income                        212,000         51,000
 Trading and margin interest expense                (118,000)      (173,000)
                                                  ----------     ----------
Total other income(expense), net                   3,651,000     (2,609,000)
                                                  ----------     ----------

Income(loss) before income taxes                   5,462,000     (1,735,000)
Income tax (expense)benefit                       (2,022,000)       611,000
                                                  ----------     ----------
Net income(loss)                                   3,440,000     (1,124,000)
Less: Net (income)loss attributable to the
 noncontrolling interest                            (247,000)       224,000
                                                  ----------     ----------
Net loss attributable to Portsmouth                3,193,000       (900,000)
                                                  ==========     ==========

Basic and diluted income(loss) per share
 attributable to Portsmouth                      $      4.35    $     (1.23)
                                                  ==========     ==========
Weighted average number of common shares
 Outstanding                                         734,183        734,183
                                                  ==========     ==========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                    -5-
<PAGE>
<TABLE>

                            PORTSMOUTH SQUARE, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)

For the six months ended December 31,                        2010           2009
                                                          ----------     ----------
<S>                                                      <C>            <C>
Cash flows from operating activities:
  Net income(loss)                                       $ 3,440,000    $(1,124,000)
  Adjustments to reconcile net income(loss)
   to net cash provided by operating activities:
    Net unrealized (gain)loss on marketable securities    (1,394,000)     2,910,000
    Net unrealized gain on other investments              (3,837,000)       (85,000)
    Impairment loss on other investments                     197,000        334,000
    Depreciation and amortization                          2,448,000      2,331,000
    Changes in assets and liabilities:
      Investment in marketable securities                 (1,833,000)       373,000
      Accounts receivable                                    233,000        (67,000)
      Other assets                                          (722,000)      (386,000)
      Accounts payable and other liabilities                (910,000)       341,000
      Due to securities broker                             1,988,000     (1,514,000)
      Obligations for securities sold                        (79,000)      (258,000)
      Deferred tax asset                                   2,022,000       (611,000)
                                                          ----------     ----------
  Net cash provided by operating activities                1,553,000      2,244,000
                                                          ----------     ----------

Cash flows from investing activities:
  Payments for hotel furniture, equipment
   and building improvements                              (1,008,000)      (926,000)
  Other investments                                           16,000       (300,000)
                                                          ----------     ----------
  Net cash used in investing activities                     (992,000)    (1,226,000)
                                                          ----------     ----------

Cash flows from financing activities:

  Draw on line of credit                                           -        689,000
  Payments on mortgage notes payable                        (400,000)      (378,000)
  Payment on other notes payable                             (95,000)      (201,000)
                                                          ----------     ----------
  Net cash (used in)provided by financing activities        (495,000)       110,000
                                                          ----------     ----------
Net increase in cash and cash equivalents                     66,000      1,128,000

Cash and cash equivalents at the beginning of the period     522,000        209,000
                                                          ----------     ----------
Cash and cash equivalents at the end of the period       $   588,000    $ 1,337,000
                                                          ==========     ==========
Supplemental information:

Interest paid                                            $ 1,447,000    $ 1,529,000
                                                          ==========     ==========
Assets acquired through capital lease                    $         -    $   700,000
                                                          ==========     ==========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                    -6-
<PAGE>

                        PORTSMOUTH SQUARE, INC.
       NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements included herein have been prepared by
Portsmouth Square, Inc. ("Portsmouth" or the "Company"), without audit,
according to the rules and regulations of the Securities and Exchange
Commission.  Certain information and footnote disclosures normally included in
the consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes the disclosures that are
made are adequate to make the information presented not misleading.  Further,
the consolidated financial statements reflect, in the opinion of management,
all adjustments (which included only normal recurring adjustments) necessary
for a fair statement of the financial position, cash flows and results of
operations as of and for the periods indicated. It is suggested that these
financial statements be read in conjunction with the audited financial
statements of Portsmouth and the notes therein included in the Company's Annual
Report on Form 10-K for the year ended June 30, 2010.  The June 30, 2010
Condensed Consolidated Balance Sheet was obtained from the Company's Form 10-K
for the year ended June 30, 2010.

The results of operations for the three and six months ended December 31, 2010
are not necessarily indicative of results to be expected for the full fiscal
year ending June 30, 2011.

As of December 31, 2010, Santa Fe Financial Corporation ("Santa Fe"), a public
company, owns approximately 68.8% of the outstanding common shares of
Portsmouth Square, Inc. ("Portsmouth" or the "Company"). Santa Fe is a 76%-
owned subsidiary of The InterGroup Corporation ("InterGroup"), a public
company. InterGroup also directly owns approximately 11.7% of the common stock
of Portsmouth.

Portsmouth's primary business is conducted through its general and limited
partnership interest in Justice Investors, a California limited partnership
("Justice" or the "Partnership"). Portsmouth has a 50.0% limited partnership
interest in Justice and serves as one of the two general partners. The other
general partner, Evon Corporation ("Evon"), served as the managing general
partner until December 1, 2008 at which time Portsmouth assumed the role of
managing general partner. The financial statements of Justice are consolidated
with those of the Company.

Justice owns a 544-room hotel property located at 750 Kearny Street, San
Francisco California, known as the Hilton San Francisco Financial District (the
"Hotel") and related facilities including a five level underground parking
garage. The Hotel is operated by the partnership as a full service Hilton brand
hotel pursuant to a Franchise License Agreement with Hilton Hotels Corporation.
Justice also has a Management Agreement with Prism Hospitality L.P. ("Prism")
to perform the day-to-day management functions of the Hotel.
Justice leased the parking garage to Evon through September 30, 2008.
Effective October 1, 2008, Justice and Evon entered into an Installment Sale
Agreement whereby Justice purchased all of Evon's right, title, and interest in
the remaining term of its lease of the parking garage, which was to expire on

                                    -7-
<PAGE>

November 30, 2010, and other related assets.  Justice also agreed to assume
Evon's contract with Ace Parking Management, Inc. ("Ace Parking") for the
management of the garage and any other liabilities related to the operation of
the garage commencing October 1, 2008.  The management agreement with Ace
Parking was extended for another 62 months, effective November 1, 2010. The
Partnership also leases a day spa on the lobby level to Tru Spa.  Portsmouth
also receives management fees as a general partner of Justice for its services
in overseeing and managing the Partnership's assets. Those fees are eliminated
in consolidation.

Due to the temporary closing of the Hotel to undergo major renovations from May
2005 until January 2006 to transition and reposition the Hotel from a Holiday
Inn to a Hilton, and the substantial depreciation and amortization expenses
resulting from the renovations and operating losses incurred as the Hotel
ramped up operations after reopening, Justice has recorded net losses. These
losses were anticipated and planned for as part of the Partnership's renovation
and repositioning plan for Hotel and management considers those net losses to
be temporary. The Hotel has been generating positive cash flows from operations
since June 2006 and net income is expected to improve in the future, especially
since depreciation and amortization expenses attributable to the renovation
will decrease substantially. Despite the significant downturn in the economy,
management believes that the revenues expected to be generated from the Hotel,
garage and the Partnership's leases will be sufficient to meet all of the
Partnership's current and future obligations and financial requirements.
Management also believes that there is significant equity in the Hotel to
support additional borrowings, if necessary.

Basic income (loss) per share is calculated based upon the weighted average
number of common shares outstanding during each fiscal year.  During the three
and six months ended December 31, 2010 and 2009, the Company did not have any
potentially dilutive securities outstanding.

In January 2010, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) 2010-06, "Improving Disclosures About Fair
Value Measurements." Effective January 1, 2010, ASU 2010-06 requires the
separate disclosure of significant transfers into and out of the Level 1 and
Level 2 categories and the reasons for such transfers, and also requires fair
value measurement disclosures for each class of assets and liabilities as well
as disclosures about valuation techniques and inputs used for recurring and
nonrecurring Level 2 and Level 3 fair value measurements.  Effective in fiscal
years beginning after December 31, 2010, ASU 2010-06 also requires Level 3
disclosure of purchases, sales, issuances and settlements activity on a gross
rather than a net basis. These amendments resulted in additional disclosures in
the Company's condensed consolidated financial statements.

The Consolidation Topic of the FASB ASC 810 provides a new accounting provision
regarding the consolidation of variable interest entities ("VIEs"). The new
accounting provision modifies the existing quantitative guidance used in
determining the primary beneficiary of a VIE by requiring entities to
qualitatively assess whether an enterprise is a primary beneficiary, based on
whether the entity has (i) power over the significant activities of the VIE,
and (ii) an obligation to absorb losses or the right to receive benefits that
could be potentially significant to the VIE. Additionally, the accounting
provision requires an ongoing reconsideration of the primary beneficiary and
provides a framework for the events that triggers a reassessment of whether an
entity is a VIE. The new accounting update became effective for the Company on
July 1, 2010. The adoption of this guidance did not have a material effect on
the Company's condensed consolidated financial statements.

                                    -8-
<PAGE>

The Company has evaluated subsequent events through the date the condensed
consolidated financial statements were issued.


NOTE 2 - INVESTMENT IN HOTEL, NET

Property and equipment consisted of the following:

                                                Accumulated      Net Book
As of December 31, 2010        Cost            Depreciation        Value
                            ------------       ------------     ------------
Land                        $  1,124,000       $          -     $  1,124,000
Furniture and equipment       19,030,000        (16,570,000)       2,460,000
Building and improvements     46,770,000        (18,057,000)      28,713,000
                            ------------       ------------     ------------
                            $ 66,924,000       $(34,627,000)    $ 32,297,000
                            ============       ============     ============

As of June 30, 2010                            Accumulated        Net Book
                               Cost            Depreciation        Value
                            ------------       ------------     ------------
Land                        $  1,124,000       $          -     $  1,124,000
Furniture and equipment       18,392,000        (14,711,000)       3,681,000
Building and improvements     46,400,000        (17,497,000)      28,903,000
                            ------------       ------------     ------------
                            $ 65,916,000       $(32,208,000)    $ 33,708,000
                            ============       ============     ============


NOTE 3 - INVESTMENT IN MARKETABLE SECURITIES

The Company's investment in marketable securities consists primarily of
corporate equities. The Company has also invested in corporate bonds and income
producing securities, which may include interests in real estate based
companies and REITs, where financial benefit could insure to its shareholders
through income and/or capital gain.

At December 31, 2010, all of the Company's marketable securities are classified
as trading securities.  The change in the unrealized gains and losses on these
investments are included in earnings.

Trading securities are summarized as follows:

<TABLE>

                              Gross            Gross             Net            Fair
Investment     Cost       Unrealized Gain  Unrealized Loss  Unrealized Gain     Value
----------  -----------   ---------------  ---------------  ---------------  ------------

As of December 31, 2010
<S>         <C>            <C>              <C>                <C>            <C>
Corporate
Equities    $ 3,716,000    $ 2,315,000      ($ 481,000)        $1,834,000     $ 5,550,000

As of June 30, 2010

Corporate
Equities   $  2,015,000    $ 544,000       ($ 236,000)        $ 308,000     $ 2,323,000

</TABLE>
                                    -9-
<PAGE>

As of December 31, 2010 and June 30, 2010, the Company had unrealized losses of
$312,000 and $165,000, respectively, related to securities held for over one
year.

Net gain(loss) on marketable securities on the statement of operations is
comprised of realized and unrealized gains(losses).  Below is the composition
of the net gain(loss) for the three and six months ended December 31, 2010 and
2009, respectively.

<TABLE>

For the three months ended December 31,                      2010             2009
                                                         -----------      -----------
<S>                                                      <C>              <C>
Realized (loss)gain on marketable securities             $   (40,000)     $ 2,107,000
Unrealized gain(loss) on marketable securities             1,435,000       (2,125,000)
                                                         -----------      -----------
Net gain(loss) on marketable securities                  $ 1,395,000      $   (18,000)
                                                         ===========      ===========

For the six months ended December 31,                        2010             2009
                                                         -----------      -----------
Realized (loss)gain on marketable securities             $   (61,000)     $ 2,114,000
Unrealized gain(loss) on marketable securities             1,394,000       (2,910,000)
                                                         -----------      -----------
Net gain(loss) on marketable securities                  $ 1,333,000      $  (796,000)
                                                         ===========      ===========
</TABLE>

NOTE 4 - OTHER INVESTMENTS, NET

The Company may also invest, with the approval of the Securities Investment
Committee and other Company guidelines, in private investment equity funds and
other unlisted securities, such as convertible notes through private
placements. Those investments in non-marketable securities are carried at cost
on the Company's balance sheet as part of other investments, net of other than
temporary impairment losses.

As of December 31, 2010 and June 30, 2010, the Company's other investments,
net, is comprised of the following:


            Type                       December 31, 2010     June 30, 2010
   ---------------------------        ------------------  ----------------
   Preferred stock - Comstock          $       4,410,000  $              -
   Private equity hedge fund                   1,155,000         1,352,000
   Corporate debt & equity instruments           201,000           925,000
   Warrants - at fair value                      371,000           236,000
                                       -----------------  ----------------
                                       $       6,137,000  $      2,513,000
                                       =================  ================

                                    -10-
<PAGE>

On October 20, 2010, as part of a debt restructuring of one of its investments,
the Company exchanged approximately $4,410,000 in notes, convertible notes and
debt instruments that it held in Comstock Mining, Inc. ("Comstock" - OTCBB:
LODE)) for 4,410 shares ($1,000 stated value) of newly created 7 1/2% Series A-
1 Convertible Preferred Stock (the "A-1 Preferred") of Comstock. Prior to the
exchange, those notes and convertible debt instruments had a carrying value of
$724,000, net of impairment adjustments. The Company accounted for the
transaction as an exchange of its debt securities and recorded the new
instruments (A-1 Preferred) received based on their fair value.  The Company
estimated the fair value of the A-1 Preferred at $1,000 per share, which was
the stated value of the instrument, for a total of $4,410,000.  The fair value
of the A-1 Preferred had a similar value to the Series B preferred stock
financing (stated value of $1,000 per share) by which Comstock concurrently
raised $35.7 million in new capital from other investors in October 2010.   The
Company recorded an unrealized gain of $3,686,000 related to the preferred
stock received as part of the debt restructuring. This unrealized gain is
included in the net unrealized gain on other investments in the Company's
condensed consolidated statements of operations.

As part of that transaction, the Company's parent companies, Santa Fe and
InterGroup Corporation, also exchanged approximately $2,249,000 and $6,572,000
in notes, convertible notes and debt instruments for 2,249 and 6,572 shares of
A-1 Preferred, respectively. The Company's Chairman and President
also exchanged approximately $7,681,000 in notes and convertible notes held
personally by him for 7,681 shares of A-1 Preferred. Together, the Company,
Santa Fe, InterGroup and Mr. Winfield will constitute all of the holders of the
A-1 Preferred.

Each share of A-1 Preferred has a stated value of $1,000 per share and a
liquidation and change of control preference equal to the stated value plus
accrued and unpaid dividends.  Commencing January 1, 2011, the holders are
entitled to semi-annual dividends at a rate of 7.5% per annum, payable in cash,
common stock, preferred stock or any combination of the foregoing, at the
election of Comstock. At the holder's election, each share of A-1 Preferred is
convertible at a fixed conversion rate (subject to anti-dilution) into 1,536
shares of common stock of Comstock, therefore converting into common stock at a
conversion price of $0.6510.  Each share of A-1 Preferred will entitle the
holder to vote with the holders of common stock as a single class on all
matters submitted to the vote of the common stock (on an as converted basis)
and, for purposes of voting only, each share of A-1 Preferred shall be entitled
to five times the number of votes per common share to which it would otherwise
be entitled. Each share of A-1 Preferred shall entitle its holder to one (1)
vote in any matter submitted to vote of holders of Preferred Stock, voting as a
separate class. The A-1 Preferred, in conjunction with the other series of
newly created Preferred Stock of Comstock, also has certain rights requiring
consent of the Preferred Stock holders for Comstock to take certain corporate
and business actions. The holders will have registration rights with respect to
the shares of common stock underlying the A-1 Preferred and also preemptive
rights.  The foregoing description of the A-1 Preferred and the specific terms
of the A-1 Preferred is qualified in its entirety by reference to the
provisions of the Series A Securities Purchase Agreement, the Certificate of
Designation of Preferences and Rights and Limitations of 7 1/2% Series A-1
Convertible Preferred Stock and the Registration Rights Agreement for the
Series A Preferred Stock, which were filed as exhibits to the Company's Current
Report on Form 8-K, dated October 20, 2010.

                                    -11-
<PAGE>

As of December 31, 2010, the Company had investments in corporate debt and
equity instruments which had attached warrants that were considered derivative
instruments.  These warrants have an allocated cost basis of $165,000 and a
fair market value of $371,000.  During the three and six months ended December
31, 2010, the Company had an unrealized gain of $137,000 and $151,000,
respectively, related to these warrants.


NOTE 5 - FAIR VALUE MEASUREMENTS

The carrying values of the Company's non-financial instruments approximate fair
value due to their short maturities(i.e., accounts receivable, other assets,
accounts payable and other liabilities, due to securities broker and
obligations for securities sold) or the nature and terms of the
obligation(i.e., other notes payable and mortgage note payable).

The assets measured at fair value on a recurring basis as of December 31, 2010
and June 30, 2010 are as follows:

<TABLE>

Assets:                                 Level 1      Level 2        Level 3      December 31, 2010
-----------                            ---------    ---------      ---------     ------------------
<S>                                   <C>           <C>             <C>              <C>
Cash                                  $  588,000    $       -       $      -         $  588,000
                                       ---------                                     ----------
Other investments - warrants                   -      371,000              -            371,000
                                                    ---------                        ----------
Investment in marketable securities
  Basic materials                      1,591,000                                      1,591,000
  Financial services                     956,000                                        956,000
  Services                               907,000                                        907,000
  Investment funds                       789,000                                        789,000
  REITs                                  529,000                                        529,000
  Other                                  778,000                                        778,000
                                       ---------                                     ----------
                                       5,550,000                                      5,550,000
                                       ---------     ---------       --------        ----------
                                      $6,138,000    $  371,000      $       -       $ 6,509,000
                                       =========     =========       ========        ==========
</TABLE>

The assets measured at fair value on a recurring basis as of June 30, 2010 are
as follows:

<TABLE>

Assets:                                 Level 1      Level 2        Level 3         June 30, 2010
-----------                            ---------    ---------      ---------       --------------
<S>                                   <C>           <C>            <C>               <C>
Cash                                  $ 522,000     $       -      $       -         $  522,000
                                       ---------                                      ---------
Other investments - warrants                   -      236,000              -            236,000
                                                     -------                          ---------
Investment in marketable securities
  Investment funds                       751,000                                        751,000
  REITs                                  493,000                                        493,000
  Healthcare                             276,000                                        276,000
  Services                               261,000                                        261,000
  Financial services                     214,000                                        214,000
  Other                                  328,000                                        328,000
                                       ---------                                      ---------
                                       2,323,000                                      2,323,000
                                       ---------     --------       --------          ---------
                                      $2,845,000    $ 236,000      $       -         $3,081,000
                                       =========     ========       ========          =========
</TABLE>
                                    -12-
<PAGE>

Financial assets that are measured at fair value on a non-recurring basis and
are not included in the tables above include "Other investments in non-
marketable securities," that were initially measured at cost and have been
written down to fair value as a result of impairment. The following table shows
the fair value hierarchy for these assets measured at fair value on a non-
recurring basis as follows:

<TABLE>
                                                                                         Net gain for the
                                                                                         six months ended
Assets:                           Level 1    Level 2      Level 3    December 31, 2010   December 31, 2010
-----------                      ---------  ---------    ---------   ------------------   ------------------
<S>                              <C>        <C>          <C>            <C>               <C>
Other non-marketable investments        -          -     $5,766,000     $5,766,000             $3,489,000

                                                                                            Loss for the
                                                                                          six months ended
Assets:                           Level 1    Level 2      Level 3      June 30, 2010      December 31, 2009
-----------                      ---------  ---------    ---------   ------------------   ------------------
Other non-marketable investments        -          -     $2,277,000     $2,277,000             $(334,000)

</TABLE>

Other investments in non-marketable securities are carried at cost net of any
impairment loss.  The Company has no significant influence or control over the
entities that issue these investments.  These investments are reviewed on a
periodic basis for other-than-temporary impairment. The Company reviews several
factors to determine whether a loss is other-than-temporary. These factors
include but are not limited to: (i) the length of time an investment is in an
unrealized loss position, (ii) the extent to which fair value is less than
cost, (iii) the financial condition and near term prospects of the issuer and
(iv) our ability to hold the investment for a period of time sufficient to
allow for any anticipated recovery in fair value.


NOTE 6 - SEGMENT INFORMATION

The Company operates in two reportable segments, the operation of the hotel
("Hotel Operations") and the investment of its cash in marketable securities
and other investments ("Investment Transactions"). These two operating
segments, as presented in the consolidated financial statements, reflect how
management internally reviews each segment's performance.  Management also
makes operational and strategic decisions based on this same information.
Information below represents reporting segments for the three and six months
ended December 31, 2010 and 2009, respectively.  Operating income(loss) from
Hotel operations consists of the operation of the hotel and operation of the
garage.  Operating income(loss) for investment transactions consist of net
investment gain (loss) and dividend and interest income.

<TABLE>

As of and for the
three months ended                Hotel       Investment
December 31, 2010              Operations   Transactions      Other          Total
                                -----------  ------------   -----------   ------------
<S>                             <C>           <C>           <C>           <C>
Revenues                        $ 9,142,000   $         -   $         -   $  9,142,000
Operating expenses               (8,026,000)            -      (150,000)    (8,176,000)
                                -----------   -----------   -----------   ------------
Income(loss)from operations       1,116,000             -      (150,000)       966,000
Interest expense                   (713,000)            -             -       (713,000)
Net income from investments               -     5,197,000             -      5,197,000
Income tax expense                        -             -    (2,063,000)    (2,063,000)
                                -----------   -----------   -----------   ------------
Net income(loss)                $   403,000   $ 5,197,000   $(2,213,000)  $  3,387,000
                                ===========   ===========   ===========   ============
Total assets                    $32,297,000   $11,687,000   $ 8,024,000   $ 52,008,000
                                ===========   ===========   ===========   ============

</TABLE>
                                    -13-
<PAGE>
<TABLE>

As of and for the
three months ended                Hotel       Investment
December 31, 2009               Operations   Transactions      Other          Total
                                -----------  ------------   -----------   ------------
<S>                             <C>           <C>           <C>           <C>
Revenues                        $ 8,368,000   $         -   $         -   $  8,368,000
Expenses                         (7,742,000)            -      (150,000)    (7,892,000)
                                -----------   -----------   -----------   ------------
Income(loss)from operations         626,000             -      (150,000)       476,000
Interest expense                   (729,000)            -             -       (729,000)
Net loss from investments                 -      (332,000)            -       (332,000)
Income tax benefit                        -             -       202,000        202,000
                                -----------   -----------   -----------   ------------
Net income(loss)                $  (103,000)  $  (332,000)  $    52,000   $   (383,000)
                                ===========   ===========   ===========   ============
Total assets                    $35,637,000   $ 5,164,000   $10,038,000   $ 50,839,000
                                ===========   ===========   ===========   ============


As of and for the
six months ended                  Hotel       Investment
December 31, 2010               Operations   Transactions      Other          Total
                                -----------  ------------   -----------   ------------
Revenues                        $18,668,000   $         -   $         -   $ 18,668,000
Operating expenses              (16,581,000)            -      (276,000)   (16,857,000)
                                -----------   -----------   -----------   ------------
Income(loss)from operations       2,087,000             -      (276,000)     1,811,000
Interest expense                 (1,416,000)            -             -     (1,416,000)
Net income from investments               -     5,067,000             -      5,067,000
Income tax expense                        -             -    (2,022,000)    (2,022,000)
                                -----------   -----------   -----------   ------------
Net income(loss)                $   671,000   $ 5,067,000   $(2,298,000)  $  3,440,000
                                ===========   ===========   ===========   ============
Total assets                    $32,297,000   $11,687,000   $ 8,024,000   $ 52,008,000
                                ===========   ===========   ===========   ============


As of and for the
six months ended                  Hotel       Investment
December 31, 2009               Operations   Transactions      Other          Total
                                -----------  ------------   -----------   ------------
Revenues                        $16,898,000   $         -   $         -   $ 16,898,000
Expenses                        (15,750,000)            -      (274,000)   (16,024,000)
                                -----------   -----------   -----------   ------------
Income(loss)from operations       1,148,000             -      (274,000)       874,000
Interest expense                 (1,442,000)            -             -     (1,442,000)
Net loss from investments                 -    (1,167,000)            -     (1,167,000)
Income tax benefit                        -             -       611,000        611,000
                                -----------   -----------   -----------   ------------
Net income(loss)                $  (294,000)  $(1,167,000)  $   337,000   $ (1,124,000)
                                ===========   ===========   ===========   ============
Total assets                    $35,637,000   $ 5,164,000   $ 10,038,000   $50,839,000
                                ===========   ===========   ===========   ============

</TABLE>
                                    -14-
<PAGE>

NOTE 7 - RELATED PARTY TRANSACTIONS

Certain shared costs and expenses, primarily administrative expenses, rent and
insurance are allocated among the Company, the Company's parent, Santa Fe and
InterGroup, the parent of Santa Fe, based on management's estimate of the pro
rata utilization of resources.  For the three months ended December 31, 2010
and 2009, these expenses were approximately $18,000 for each respective period.
For the six months ended December 31, 2010 and 2009, these expenses were
approximately $36,000 for each respective period.

Four of the Portsmouth directors serve as directors of Intergroup. Three of
those directors also serve as directors of Santa Fe.  The three Santa Fe
directors also serve as directors of Intergroup.

During the three and six months ended December 31, 2010, the Company received
management fees from Justice Investors totaling $93,000 and $172,000,
respectively.  These amounts were eliminated in consolidation.

John V. Winfield serves as Chief Executive Officer and Chairman of the Company,
Santa Fe, and InterGroup.  Depending on certain market conditions and various
risk factors, the Chief Executive Officer, his family, Santa Fe and InterGroup
may, at times, invest in the same companies in which the Company invests.  The
Company encourages such investments because it places personal resources of the
Chief Executive Officer and his family members, and the resources of Santa Fe
and InterGroup, at risk in connection with investment decisions made on behalf
of the Company.


Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

The Company may from time to time make forward-looking statements and
projections concerning future expectations.  When used in this discussion, the
words "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "may," "could," "might" and similar expressions, are intended to
identify forward-looking statements.  These statements are subject to certain
risks and uncertainties, such as national and worldwide economic conditions,
including the impact of recessionary conditions on tourism, travel and the
lodging industry, the impact of terrorism and war on the national and
international economies, including tourism and securities markets, energy and
fuel costs, natural disasters, general economic conditions and competition in
the hotel industry in the San Francisco area, seasonality, labor relations and
labor disruptions, actual and threatened pandemics such as swine flu,
partnership distributions, the ability to obtain financing at favorable
interest rates and terms, securities markets, regulatory factors, litigation
and other factors discussed below in this Report and in the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 2010, that could cause
actual results to differ materially from those projected.  Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof.  The Company undertakes no obligation
to publicly release the results of any revisions to those forward-looking
statements, which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

                                    -15-
<PAGE>

RESULTS OF OPERATIONS

The Company's principal business is conducted through its general and limited
partnership interest in the Justice Investors limited partnership ("Justice" or
the "Partnership"). The Company has a 50.0% limited partnership interest in
Justice and serves as the managing general partner of Justice. Evon Corporation
("Evon") serves as the other general partner. Justice owns the land,
improvements and leaseholds at 750 Kearny Street, San Francisco, California,
known as the Hilton San Francisco Financial District (the "Hotel"). The
financial statements of Justice have been consolidated with those of the
Company.

The Hotel is operated by the Partnership as a full service Hilton brand hotel
pursuant to a Franchise License Agreement with Hilton Hotels Corporation. The
term of the Agreement is for a period of 15 years commencing on January 12,
2006, with an option to extend the license term for another five years, subject
to certain conditions. Justice also has a Management Agreement with Prism
Hospitality L.P. ("Prism") to perform the day-to-day management functions of
the Hotel.

Until September 30, 2008, the Partnership also derived income from the lease of
the parking garage to Evon.  Effective October 1, 2008, Justice entered into an
installment sale agreement with Evon to purchase the remaining term of the
garage lease and related garage assets, and assumed the contract with Ace
Parking for the operations of the garage. Justice also leases a portion of the
lobby level of the Hotel to a day spa operator.  Portsmouth also receives
management fees as a general partner of Justice for its services in overseeing
and managing the Partnership's assets. Those fees are eliminated in
consolidation.

Recent Developments

On October 20, 2010, as part of a debt restructuring of one of its investments,
the Company exchanged approximately $4,410,000 in notes, convertible notes and
debt instruments that it held in Comstock Mining, Inc. ("Comstock" - OTCBB:
LODE)) for 4,410 shares ($1,000 stated value) of newly created 7 1/2% Series A-
1 Convertible Preferred Stock (the "A-1 Preferred") of Comstock. Prior to the
exchange, those notes and convertible debt instruments had a carrying value of
$724,000, net of impairment adjustments. The Company accounted for the
transaction as an exchange of its debt securities and recorded the new
instruments (A-1 Preferred) received based on their fair value.  The Company
estimated the fair value of the A-1 Preferred at $1,000 per share, which was
the stated value of the instrument, for a total of $4,410,000.  The fair value
of the A-1 Preferred had a similar value to the Series B preferred stock
financing (stated value of $1,000 per share) by which Comstock concurrently
raised $35.7 million in new capital from other investors in October 2010.   The
Company recorded an unrealized gain of $3,686,000 related to the preferred
stock received as part of the debt restructuring.

On October 31, 2010, Justice Investors entered into an amendment to its Parking
Facilities Management Agreement with Ace Parking to extend the term of the
agreement for a period of sixty two (62) months, commencing on November 1, 2010
and terminating December 31, 2015, subject to either party's right to terminate
the agreement without cause on ninety (90) days written notice. The amendment
also modified how an "Excess Profit Fee" to be paid to Ace would be calculated.
The amendment provides that, if net operating income ("NOI") from the garage
operations exceeds $1,800,000 but is less than $2,000,000, then Ace will be

                                    -16-
<PAGE>

entitled to an Excess Profit Fee of one percent (1%) of the total annual NOI.
If the annual NOI is $2,000,000 or higher, Ace will be entitled to an Excess
Profit Fee equal to two percent (2%) of the total annual NOI. The prior Excess
Profit Fee entitled Ace to receive three percent of NOI in excess of $150,000.

Effective November 30, 2010, the general and limited partners of Justice
Investors entered into an Amended and Restated Agreement of Limited
Partnership, which was approved and ratified by more than 97% of the limited
partnership interests of Justice. The Partnership Agreement was amended and
restated in its entirety to comply with the new provisions of the California
Corporations Code known as the "Uniform Limited Partnership Act of 2008". The
amendment did not result in any material modifications of the rights or
obligations of the general and limited partners.


Three Months Ended December 31, 2010 Compared to Three Months
Ended December 31, 2009

The Company had net income of $3,387,000 for the three months ended December
31, 2010 compared to a net loss of $383,000 for the three months ended December
31, 2009.  The change is primarily attributable to the significant income
generated from investing activities and to a lesser extent, the increase in
income from hotel operations.

The Company had income from hotel operations of $403,000 for the three months
ended December 31, 2010, compared to a loss of $103,000 for the three months
ended December 31, 2009. The following table sets forth a more detailed
presentation of Hotel operations for the three months ended December 31, 2010
and 2009.

<TABLE>

For the three months ended December 31,                         2010            2009
---------------------------------------                      ----------      ----------
<S>                                                         <C>             <C>
Hotel revenues:
 Hotel rooms                                                $ 6,701,000     $ 6,474,000
 Food and beverage                                            1,502,000       1,118,000
 Garage                                                         645,000         598,000
 Other                                                          294,000         178,000
                                                             ----------      ----------
  Total hotel revenues                                        9,142,000       8,368,000

Operating expenses, excluding interest, depreciation and
 amortization                                                (6,816,000)     (6,543,000)
                                                             ----------      ----------
Operating income before interest, depreciation and
 amortization                                                 2,326,000       1,825,000
Interest expense                                               (713,000)       (729,000)
Depreciation and amortization expense                        (1,210,000)     (1,199,000)
                                                             ----------      ----------
Income (loss) from hotel operations                         $   403,000     $ (103,000)
                                                             ==========      ==========
</TABLE>

For the three months ended December 31, 2010, the Hotel generated operating
income of $2,326,000 before interest, depreciation and amortization, on
operating revenues of $9,142,000 compared to operating income of $1,825,000
before interest, depreciation and amortization, on operating revenues of
$8,368,000 for the three months ended December 31, 2009. The increase in income
from Hotel operations is primarily attributable to increases in room, food and

                                    -17-
<PAGE>

beverage, garage and other revenues in the current period, partially offset by
an increase in operating expenses due to higher labor costs and increased
staffing to improve guest satisfaction.

Room revenues increased by $227,000 for the three months ended December 31,
2010 compared to the three months ended December 31, 2009 and food and beverage
revenues increased by $384,000 for the same period. The increase in room
revenues was primarily attributable to a significant increase in average daily
room rates during the three months ended December 31, 2010 as the Hotel
continued to see an increase in higher rated corporate and group business
travel, which also resulted in higher in food and beverage revenues. The
increase in garage revenues was primarily attributable to increased demand in
the area around the Hotel and a modest increase in transient parking rates. The
increase in other revenues was primarily attributable group business that
either canceled or was less than guaranteed, as well as greater revenues from
Internet services.

The following table sets forth the average daily room rate, average occupancy
percentage and room revenue per available room ("RevPar") of the Hotel for the
three months ended December 31, 2010 and 2009.

Three Months Ended         Average           Average
   December 31,           Daily Rate        Occupancy%         RevPar
-----------------         ----------        ---------         --------
      2010                   $186              82%              $153
      2009                   $164              86%              $141

The operations of the Hotel continued to experience an increase in the higher
rated business and group travel segments as the hospitality industry began to
see some recovery. As a result, the Hotel's average daily rate increased by $22
for the three months ended December 31, 2010 compared to the three months ended
December 31, 2009. The modest decrease in occupancy of 4% was due to the Hotel
being able to reduce the amount of discounted Internet business that it was
forced to take in the prior period to maintain occupancy in a very competitive
market. As a result, the Hotel was able to achieve a RevPar number that was $12
higher than the prior period.

During the past year we have seen our management team guide our Hotel through a
difficult economic period by taking bold steps to reduce expenses and implement
innovative strategies in order to improve operations and enhance our
competitiveness in the market. As a result, we believe that the Hotel is now
well positioned to take advantage of a recovery in the hotel industry. We will
continue in our efforts to upgrade our guest rooms and facilities and explore
new and innovative ways to differentiate the Hotel from its competition. Moving
forward, we will also focus on cultivating more international business,
especially from China, and capturing a higher percentage of corporate and group
travel. During the last quarter, we saw continued improvement in business
travel. If that trend in the hotel industry continues, it should translate into
an increase in room revenues and profitability.

The Company had a net gain on marketable securities of $1,395,000 for the three
months ended December 31, 2010 compared to a net loss on marketable securities
of $18,000 for the three months ended December 31, 2009. For the three months
ended December 31, 2010, the Company had a net realized loss of $40,000 and a
net unrealized gain of $1,435,000.  For the three months ended December 31,
2009, the Company had a net realized gain of $2,107,000 and a net unrealized
loss of $2,125,000.  Gains and losses on marketable securities may fluctuate

                                    -18-
<PAGE>

significantly from period to period in the future and could have a significant
impact on the Company's results of operations.  However, the amount of gain or
loss on marketable securities for any given period may have no predictive value
and variations in amount from period to period may have no analytical value.
For a more detailed description of the composition of the Company's marketable
securities see the Marketable Securities section below.

The Company may also invest, with the approval of the Securities Investment
Committee and other Company guidelines, in private investment equity funds and
other unlisted securities, such as convertible notes through private
placements. Those investments in non-marketable securities are carried at cost
on the Company's balance sheet as part of other investments, net of other than
temporary impairment losses.  As of December 31, 2010, the Company had net
other investments of $6,137,000.  On October 20, 2010, as part of a debt
restructuring of one of its investments, the Company exchanged approximately
$4,410,000 in notes, convertible notes and debt instruments that it held in
Comstock Mining, Inc. ("Comstock" - OTCBB: LODE)) for 4,410 shares ($1,000
stated value) of newly created 7 1/2% Series A-1 Convertible Preferred Stock
(the "A-1 Preferred") of Comstock. Prior to the exchange, those notes and
convertible debt instruments had a carrying value of $724,000, net of
impairment adjustments. The Company accounted for the transaction as an
exchange of its debt securities and recorded the new instruments (A-1
Preferred) received based on their fair value.  The Company estimated the fair
value of the A-1 Preferred at $1,000 per share, which was the stated value of
the instrument, for a total of $4,410,000.  The fair value of the A-1 Preferred
had a similar value to the Series B preferred stock financing (stated value of
$1,000 per share) by which Comstock concurrently raised $35.7 million in new
capital from other investors in October 2010.   The Company recorded an
unrealized gain of $3,686,000 related to the preferred stock received as part
of the debt restructuring.

During the three months ended December 31, 2010 and 2009, the Company performed
an impairment analysis of its other investments and determined that one of its
investments had other than temporary impairment and recorded impairment losses
of $113,000 and $334,000, for each respective period.

Dividend and interest income increased to $160,000 for the quarter ended
December 31, 2010 from $20,000 for the quarter ended December 31, 2009
primarily as the result of receiving a stock dividend of $116,000 from Comstock
during the most recent quarter.

The provision for income tax (expense)benefit as a percentage of the
income(loss) was relatively consistent for the three months ended December 31,
2010 as compared to the three months ended December 31, 2009.


Six Months Ended December 31, 2010 Compared to Six Months
Ended December 31, 2009

The Company had net income of $3,440,000 for the six months ended December 31,
2010 compared to a net loss of $1,124,000 for the six months ended December 31,
2009.  The change is primarily attributable to the significant income generated
from investing activities and to a lesser extent, the increase in income from
hotel operations.

                                    -19-
<PAGE>

The Company had income from hotel operations of $671,000 for the six months
ended December 31, 2010, compared to a loss of $294,000 for the six months
ended December 31, 2009. The following table sets forth a more detailed
presentation of Hotel operations for the six months ended December 31, 2010 and
2009.

<TABLE>

For the six months ended December 31,                           2010            2009
--------------------------------------                       ----------      ----------
<S>                                                         <C>              <C>
Hotel revenues:
 Hotel rooms                                                $ 14,216,000     $ 13,206,000
 Food and beverage                                             2,683,000        2,069,000
 Garage                                                        1,281,000        1,266,000
 Other                                                           488,000          357,000
                                                             -----------      -----------
  Total hotel revenues                                        18,668,000       16,898,000

Operating expenses, excluding interest, depreciation and
 amortization                                                (14,133,000)     (13,419,000)
                                                             -----------      -----------
Operating income before interest, depreciation and
 amortization                                                  4,535,000        3,479,000
Interest expense                                              (1,416,000)      (1,442,000)
Depreciation and amortization expense                         (2,448,000)      (2,331,000)
                                                             -----------      -----------
Income (loss) from hotel operations                         $    671,000     $   (294,000)
                                                             ===========      ===========
</TABLE>

For the six months ended December 31, 2010, the Hotel generated operating
income of $4,535,000 before interest, depreciation and amortization, on
operating revenues of $18,668,000 compared to operating income of $3,479,000
before interest, depreciation and amortization, on operating revenues of
$16,898,000 for the six months ended December 31, 2009. The increase in income
from Hotel operations is primarily attributable to increases in room, food and
beverage, and other revenues in the current period, partially offset by an
increase in operating expenses due to higher labor costs and increased staffing
to improve guest satisfaction.

Room revenues increased by $1,010,000 for the six months ended December 31,
2010 compared to the six months ended December 31, 2009 and food and beverage
revenues increased by $614,000 for the same period. The increase in room
revenues was primarily attributable to a significant increase in average daily
room rates during the six months ended December 31, 2010 as the Hotel began to
see an increase in higher rated corporate and group business travel, which also
resulted in higher in food and beverage revenues. The increase in other
revenues was primarily attributable group business in the last three months
that either canceled or was less than guaranteed, as well as greater revenues
from Internet services.

The following table sets forth the average daily room rate, average occupancy
percentage and room revenue per available room ("RevPar") of the Hotel for the
six months ended December 31, 2010 and 2009.

Six Months Ended           Average           Average
   December 31,           Daily Rate        Occupancy%         RevPar
-----------------         ----------        ---------         --------
      2010                   $188              85%              $161
      2009                   $160              88%              $143

                                    -20-
<PAGE>

The operations of the Hotel continued to experience an increase in the higher
rated business and group travel segments as the hospitality industry began to
see some recovery. As a result, the Hotel's average daily rate increased
significantly by $28 for the six months ended December 31, 2010 compared to the
six months ended December 31, 2009. The modest decrease in occupancy of 3% was
due to the Hotel being able to reduce the amount of discounted Internet
business that it was forced to take in the prior period to maintain occupancy
in a very competitive market. As a result, the Hotel was able to achieve a
RevPar number that was $18 higher than the prior six month period.

During the past year we have seen our management team guide our Hotel through a
difficult economic period by taking bold steps to reduce expenses and implement
innovative strategies in order to improve operations and enhance our
competitiveness in the market. As a result, we believe that the Hotel is now
well positioned to take advantage of a recovery in the hotel industry. We will
continue in our efforts to upgrade our guest rooms and facilities and explore
new and innovative ways to differentiate the Hotel from its competition. Moving
forward, we will also focus on cultivating more international business,
especially from China, and capturing a higher percentage of corporate and group
travel. During the last six months, we have seen continued improvement in
business travel. If that trend in the hotel industry continues, it should
translate into an increase in room revenues and profitability.

The Company had a net gain on marketable securities of $1,333,000 for the six
months ended December 31, 2010 compared to a net loss on marketable securities
of $796,000 for the six months ended December 31, 2009. For the six months
ended December 31, 2010, the Company had a net realized loss of $61,000 and a
net unrealized gain of $1,394,000.  For the six months ended December 31, 2009,
the Company had a net realized gain of $2,114,000 and a net unrealized loss of
$2,910,000.  Gains and losses on marketable securities may fluctuate
significantly from period to period in the future and could have a significant
impact on the Company's results of operations.  However, the amount of gain or
loss on marketable securities for any given period may have no predictive value
and variations in amount from period to period may have no analytical value.
For a more detailed description of the composition of the Company's marketable
securities see the Marketable Securities section below.

The Company may also invest, with the approval of the Securities Investment
Committee and other Company guidelines, in private investment equity funds and
other unlisted securities, such as convertible notes through private
placements. Those investments in non-marketable securities are carried at cost
on the Company's balance sheet as part of other investments, net of other than
temporary impairment losses.  As of December 31, 2010, the Company had net
other investments of $6,137,000.   Prior to the exchange, those notes and
convertible debt instruments had a carrying value of $724,000, net of
impairment adjustments. The Company accounted for the transaction as an
exchange of its debt securities and recorded the new instruments (A-1
Preferred) received based on their fair value.  The Company estimated the fair
value of the A-1 Preferred at $1,000 per share, which was the stated value of
the instrument, for a total of $4,410,000.  The fair value of the A-1 Preferred
had a similar value to the Series B preferred stock financing (stated value of
$1,000 per share) by which Comstock concurrently raised $35.7 million in new
capital from other investors in October 2010.   The Company recorded an
unrealized gain of $3,686,000 related to the preferred stock received as part
of the debt restructuring.  During the six months ended December 31, 2010 and
2009, the Company performed an impairment analysis of its other investments and

                                    -21-
<PAGE>

determined that one of its investments had other than temporary impairment and
recorded impairment losses of $197,000 and $334,000, for each respective
period.

Dividend and interest income increased to $212,000 for the six months ended
December 31, 2010 from $51,000 for the six months ended December 31, 2009
primarily as the result of receiving a stock dividend of $116,000 from Comstock
during the most recent period.

Margin interest and trading expenses decreased to $118,000 for the six months
ended December 31, 2009 from $173,000 for the six months ended December 31,
2009 primarily as the result of the decrease in margin interest expense related
to the decrease in the use of margin.

The provision for income tax (expense)benefit as a percentage of the
income(loss) was relatively consistent for the six months ended December 31,
2010 as compared to the six months ended December 31, 2009.


MARKETABLE SECURITIES AND OTHER INVESTMENTS

As of December 31, 2010 and June 30, 2010, the Company had investments in
marketable equity securities of $5,550,000 and $2,323,000, respectively.  The
following table shows the composition of the Company's marketable securities
portfolio by selected industry groups as December 31, 2010 and June 30, 2010.

   As of December 31, 2010:
                                                             % of Total
                                                              Investment
   Industry Group                       Fair Value            Securities
   --------------                      ------------           ----------
   Basic materials                     $  1,591,000               28.7%
   Financial services                       956,000               17.2%
   Services                                 907,000               16.3%
   Investment funds                         789,000               14.2%
   REITs                                    529,000                9.5%
   Other                                    778,000               14.1%
                                       ------------           ----------
                                       $  5,550,000              100.0%
                                       ============           ==========

   As of June 30, 2010                                        % of Total
                                                              Investment
   Industry Group                       Fair Value            Securities
   --------------                      ------------           ----------
   Investment funds                         751,000               32.3%
   REITs                                    493,000               21.2%
   Healthcare                               276,000               11.9%
   Services                                 261,000               11.2%
   Financial services                       214,000                9.2
   Other                                    328,000               14.2%
                                         ----------              ------
                                       $  2,323,000              100.0%
                                         ==========              ======

As of December 31, 2010, the Company's investment portfolio is diversified with
39 different equity positions.  The portfolio contains two individual equity
securities that are more than 5% of the equity value of the portfolio with the

                                    -22-
<PAGE>

largest security being 26.6% of the value of the portfolio. The amount of the
Company's investment in any particular issuer may increase or decrease, and
additions or deletions to its securities portfolio may occur, at any time.
While it is the internal policy of the Company to limit its initial investment
in any single equity to less than 5% of its total portfolio value, that
investment could eventually exceed 5% as a result of equity appreciation or
reduction of other positions.


LIQUIDITY AND SOURCES OF CAPITAL

The Company's cash flows are primarily generated from its Hotel operations and
general partner fees from Justice. The Company also receives revenues generated
from the investment of its cash and marketable securities and other
investments. Since the operations of the Hotel were temporarily suspended on
May 31, 2005, and significant amounts of money were expended to renovate and
reposition the Hotel as a Hilton, Justice did not pay any partnership
distributions until the end of March 2007. As a result, the Company had to
depend more on the revenues generated from the investment of its cash and
marketable securities during that transition period.

The Hotel started to generate cash flows from its operations in June 2006. For
the fiscal year ended June 30, 2009, Justice paid a total of $850,000 in
limited partnership distributions, of which the Company received $425,000. The
fiscal 2009 distributions were paid in September 2008, after which the San
Francisco hotel market began to feel the full impact of the significant
downturn in domestic and international economies that continued throughout
fiscal 2009 and 2010. As a result, no Partnership distributions were paid in
fiscal 2010. Since only a modest improvement in economic conditions is expected
in the lodging industry in calendar 2011, no limited partnership distributions
are anticipated in fiscal 2011. The general partners will continue to monitor
and review the operations and financial results of the Hotel and to set the
amount of any future distributions that may be appropriate based on operating
results, cash flows and other factors, including establishment of reasonable
reserves for debt payments and operating contingencies.

The new Justice Compensation Agreement that became effective on December 1,
2008, when Portsmouth assumed the role of managing general partner of Justice,
has provided additional cash flows to the Company. Under the new Compensation
Agreement, Portsmouth is now entitled to 80% of the minimum base fee to be paid
to the general partners of $285,000, while under the prior agreement,
Portsmouth was entitled to receive only 20% of the minimum base fee.  During
the six months ended December 31, 2010 and 2009, the Company received
management fees from Justice Investors totaling $172,000 and $151,000,
respectively.

To meet its substantial financial commitments for the renovation and transition
of the Hotel to a Hilton, Justice had to rely on borrowings to meet its
obligations. On July 27, 2005, Justice entered into a first mortgage loan with
The Prudential Insurance Company of America in a principal amount of
$30,000,000 (the "Prudential Loan").  The term of the Prudential Loan is for
120 months at a fixed interest rate of 5.22% per annum. The Prudential Loan
calls for monthly installments of principal and interest in the amount of
approximately $165,000, calculated on a 30-year amortization schedule. The Loan
is collateralized by a first deed of trust on the Partnership's Hotel property,
including all improvements and personal property thereon and an assignment of

                                    -23-
<PAGE>

all present and future leases and rents. The Prudential Loan is without
recourse to the limited and general partners of Justice. The principal balance
of the Prudential Loan was $27,453,000 as of December 31, 2010.

On March 27, 2007, Justice entered into a second mortgage loan with Prudential
(the "Second Prudential Loan") in a principal amount of $19,000,000. The term
of the Second Prudential Loan is for 100 months and matures on August 5, 2015,
the same date as the first Prudential Loan. The Second Prudential Loan is at a
fixed interest rate of 6.42% per annum and calls for monthly installments of
principal and interest in the amount of $119,000, calculated on a 30-year
amortization schedule. The Second Prudential Loan is collateralized by a second
deed of trust on the Partnership's Hotel property, including all improvements
and personal property thereon and an assignment of all present and future
leases and rents. The Second Prudential Loan is also without recourse to the
limited and general partners of Justice. The principal balance of the Second
Prudential Loan was $18,137,000 as of December 31, 2010.

Effective April 29, 2010, the Partnership obtained a modification of its
$2,500,000 unsecured revolving line of credit facility with East West Bank
(formerly United Commercial Bank) that was to mature on April 30, 2010, and
converted that line of credit facility to an unsecured term loan. The
Partnership also obtained a waiver of any prior noncompliance with financial
covenants and paid a loan modification fee of $10,000.

The modification provides that Justice will pay the $2,500,000 balance on its
line of credit facility over a period of four years, to mature on April 30,
2014. This term loan calls for monthly principal and interest payments of
$41,000, calculated on a six-year amortization schedule, with interest only
from May 1, 2010 to August 31, 2010. Pursuant to the modification, the annual
floating interest rate was reduced by 0.5% to the Wall Street Journal Prime
Rate plus 2.5% (with a minimum floor rate of 5.0% per annum). The modification
includes financial covenants written to reflect financial conditions that all
hotels are facing. The covenants include specific financial ratios and a return
to minimum profitability by June 2011. Management believes that the Partnership
has the ability to meet the specific covenants and the Partnership was in
compliance with the covenants as of December 31, 2010. As of December 31, 2010
the outstanding balance was $2,382,000.

Despite the downturns in the economy, the Hotel has continued to generate
positive cash flows. While the debt service requirements related to the two
Prudential loans, as well as the new term loan to pay off the line of credit,
may create some additional risk for the Company and its ability to generate
cash flows in the future since the Partnership's assets had been virtually debt
free for a number of years, management believes that cash flows from the
operations of the Hotel and the garage will continue to be sufficient to meet
all of the Partnership's current and future obligations and financial
requirements. Management also believes that there is sufficient equity in the
Hotel assets to support future borrowings, if necessary, to fund any new
capital improvements and other requirements.

The Company has invested in short-term, income-producing instruments and in
equity and debt securities when deemed appropriate.  The Company's marketable
securities are classified as trading with unrealized gains and losses recorded
through the consolidated statements of operations.

Management believes that its cash, marketable securities, and the cash flows
generated from those assets and from partnership distributions and management
fees, will be adequate to meet the Company's current and future obligations.

                                    -24-
<PAGE>


MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary of the Company's material financial
obligations which also includes interest.

<TABLE>

                                   Total        Year 1       Year 2       Year 3       Year 4       Year 5      Thereafter
                                 -----------   ----------   ----------   ----------   ----------   ----------   -----------
<S>                              <C>           <C>          <C>          <C>          <C>          <C>          <C>
Mortgage notes payable           $45,590,000   $  411,000   $  858,000   $  907,000   $  960,000   $1,015,000   $41,439,000
Other notes payable                3,593,000      784,000      651,000      569,000    1,557,000       32,000             -
Interest                          12,049,000    1,408,000    2,721,000    2,628,000    2,522,000    2,396,000       374,000
                                  ----------    ---------    ---------    ---------    ---------    ---------    ----------
Total                            $61,232,000   $2,603,000   $4,230,000   $4,104,000   $5,039,000   $3,443,000   $41,813,000
                                  ----------    ---------    ---------    ---------    ---------    ---------    ----------
</TABLE>

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off balance sheet arrangements.


IMPACT OF INFLATION

Hotel room rates are typically impacted by supply and demand factors, not
inflation, since rental of a hotel room is usually for a limited number of
nights.  Room rates can be, and usually are, adjusted to account for
inflationary cost increases.  Since Prism has the power and ability under the
terms of its management agreement to adjust hotel room rates on an ongoing
basis, there should be minimal impact on partnership revenues due to inflation.
Partnership revenues are also subject to interest rate risks, which may be
influenced by inflation.  For the two most recent fiscal years, the impact of
inflation on the Company's income is not viewed by management as material.


CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are most significant to the
presentation of our financial position and results of operations and require
judgments by management in order to make estimates about the effect of matters
that are inherently uncertain. The preparation of these condensed financial
statements requires us to make estimates and judgments that affect the reported
amounts in our consolidated financial statements. We evaluate our estimates on
an on-going basis, including those related to the consolidation of our
subsidiaries, to our revenues, allowances for bad debts, accruals, asset
impairments, other investments, income taxes and commitments and contingencies.
We base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities. The actual results may differ from these estimates or our
estimates may be affected by different assumptions or conditions.

                                    -25-
<PAGE>

Item 4. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company's management, with the participation of the Company's Chief
Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the
quarterly period covered by this Quarterly Report on Form 10-Q.  Based upon
such evaluation, the Chief Executive Officer and Principal Financial Officer
have concluded that, as of the end of such period, the Company's disclosure
controls and procedures are effective in ensuring that information required to
be disclosed in this filing is accumulated and communicated to management and
is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission rules and forms.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in the Company's internal control over financial
reporting during the last quarterly period covered by this Quarterly Report on
Form 10-Q that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.


                                PART II.
                           OTHER INFORMATION

Item 6.  Exhibits.

    10.1   Amended and Restated Agreement of Limited Partnership of Justice
            Investors, effective November 30, 2010.

    31.1   Certification of Chief Executive Officer of Periodic Report
            Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

    31.2   Certification of Principal Financial Officer of Periodic Report
            Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

    32.1   Certification of Chief Executive Officer Pursuant to 18
            U.S.C. Section 1350.

    32.2   Certification of Principal Financial Officer Pursuant to 18
            U.S.C. Section 1350.

                                    -26-
<PAGE>


                                SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                               PORTSMOUTH SQUARE, INC.
                                                     (Registrant)


Date:  February 11, 2011                   by /s/ John V. Winfield
                                              ---------------------------
                                              John V. Winfield, President,
                                              Chairman of the Board and
                                              Chief Executive Officer

Date:  February 11, 2011                   by /s/ Michael G. Zybala
                                              ---------------------------
                                              Michael G. Zybala,
                                              Vice President and Secretary

Date:  February 11, 2011                   by /s/ David T. Nguyen
                                              --------------------------
                                              David Nguyen, Treasurer
                                             (Principal Financial Officer)

                                    -27-