UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                          ----------------------

                               FORM 10-QSB/A
                              Amendment No. 1


    [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

    For the quarterly period ended September 30, 2007

                         OR

    [ ]  Transition Report Pursuant to Section 13 or 15(d) of the Exchange Act

    For the transition period from _______ to ________


    Commission File Number 0-4057

                              PORTSMOUTH SQUARE, INC.
                              -----------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)

           California                               94-1674111
           ----------                               ----------
   (State or Other Jurisdiction of                 (IRS Employer
    Incorporation or Organization)                Identification No.)


           820 Moraga Drive
           Los Angeles, CA                               90049
---------------------------------------               ----------
(Address of Principal Executive Offices)              (Zip Code)

                                  (310) 889-2500
                                  --------------
                (Registrant's Telephone Number, Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been
subject to such filing requirements for the past 90 days.  Yes (X)  No ( )

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

     State the number of shares outstanding of each of the issuer's classes of
Common equity, as of the latest practicable date: 734,183 shares of issuer's No
Par Value Common Stock were outstanding as of November 13, 2007.

Transitional Small Business Disclosure Format (check one): Yes ( ) No (X)

<PAGE>


                                EXPLANATORY NOTE

This Amendment No. 1 on Form 10-QSB/A (the "Amendment") is filed by Portsmouth
Square, Inc. (the "Company") to amend the Company's Quarterly Report on Form
10-QSB for the period ended September 30, 2007 as filed on November 14, 2007.
The purpose of the Amendment is to restate our comparative prior period
unaudited financial statements for the period ended September 30, 2006, due to
an error in those financial statements related to the accounting for tax
effects on the minority interest of a consolidated limited partnership entity
as described in Note 1 to the Consolidated Financial Statements. The error does
not affect the Company's reported revenues, expenses, net income(loss) before
income taxes or cash flows, and does not impact the Company's operations.

No attempt has been made in this Form 10-QSB/A to modify or update other
disclosures presented in the original report on Form 10-QSB, except as required
to reflect the effects of the restatement. Information not affected by the
restatement is unchanged and reflects the disclosures made at the time of the
original filing of the Form 10-QSB on November 14, 2007. Accordingly, this Form
10-QSB/A should be read in conjunction with our filings made with the
Securities and Exchange Commission subsequent to the filing of the original
Form 10-QSB, including any amendments to those filings. The following items
have been amended as a result of the restatement:

     *  Part I. Item 1. Financial Information

     *  Part I. Item 2. Management's Discussion and Analysis of Financial
                        Condition and Results of Operations

     *  Part I. Item 3. Controls and Procedures

In addition, this Amendment includes updated certifications from the Company's
Chief Executive Officer and Principal Financial Officer as Exhibits 31.1, 31.2,
32.1 and 32.1 as of the date of this filing.

                                    -2-
<PAGE>

                                    INDEX

                             PORTSMOUTH SQUARE, INC.

PART I. FINANCIAL INFORMATION                                            PAGE

Item 1. Consolidated Financial Statements

 Consolidated Balance Sheet
   As of September 30, 2007 (Unaudited)                                    4

 Consolidated Statements of Operations (Unaudited)
   For the Three Months ended September 30, 2007 and 2006                  5

 Consolidated Statements of Cash Flows (Unaudited)
   For the Three Months ended September 30, 2007 and 2006                  6

  Notes to Consolidated Financial Statements                               7

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                               14

Item 3. Controls and Procedures                                           20


PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                                 21

Item 6. Exhibits                                                          22

SIGNATURES                                                                22

                                    -3-
<PAGE>

                        PART 1 - FINANCIAL INFORMATION

Item 1 - Consolidated Financial Statements

                             PORTSMOUTH SQUARE, INC.
                           CONSOLIDATED BALANCE SHEET
                                  (UNAUDITED)
As of September 30,                                           2007
                                                          ----------
Assets
  Cash and cash equivalents                             $    837,000
  Restricted cash                                          1,500,000
  Investment in marketable securities                      4,663,000
  Other investments                                        2,425,000
  Accounts receivable, net                                 1,167,000
  Other assets                                             1,406,000
  Deferred tax asset                                       2,696,000
  Minority interest of Justice Investors                   5,545,000
  Investment in real estate                                  973,000
  Investment in hotel, net                                40,992,000

                                                          ----------
Total assets                                            $ 62,204,000
                                                          ==========
Liabilities and Shareholders' Equity

Liabilities
  Accounts payable and other liabilities                $  9,591,000
  Due to securities broker                                 1,131,000
  Obligations for securities sold                            158,000
  Mortgage notes payable                                  48,000,000
                                                          ----------
Total liabilities                                         58,880,000
                                                          ----------
Commitments and contingencies

Shareholders' equity:
  Common stock, no par value; 750,000 authorized shares;
   734,183 shares issued and outstanding                   2,092,000
  Additional paid-in capital                                 916,000
  Retained earnings                                          316,000
                                                          ----------

Total shareholders' equity                                 3,324,000
                                                          ----------

Total liabilities and shareholders' equity              $ 62,204,000
                                                          ==========

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

                                    -4-
<PAGE>

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

For the three months ended September 30,             2007           2006
                                                               (As Restated)
                                                  ----------     ----------
Hotel operations:
 Hotel and garage revenue                       $  9,786,000    $ 7,592,000
 Operating expenses                               (8,335,000)    (6,360,000)
 Interest expense                                   (702,000)      (749,000)
 Real estate taxes                                  (177,000)      (180,000)
 Depreciation and amortization                    (1,083,000)    (1,034,000)
                                                  ----------     ----------
Loss from Justice Investors operations              (511,000)      (731,000)
                                                  ----------     ----------

General and administrative expense                  (150,000)      (130,000)
Other income                                           3,000          3,000
                                                  ----------     ----------
                                                    (145,000)      (127,000)
                                                  ----------     ----------
Investment transactions:
 Net losses on marketable securities                (672,000)      (397,000)
 Impairment loss on other investments                (65,000)             -
 Dividend and interest income                         24,000         25,000
 Margin interest and trading expense                 (93,000)      (107,000)
                                                  ----------     ----------
                                                    (806,000)      (479,000)
                                                  ----------     ----------
Loss before income taxes and minority interest    (1,464,000)    (1,337,000)

Minority interest - Justice Investors, pre-tax       278,000        373,000
                                                   ---------      ---------
Loss before income taxes                          (1,186,000)      (964,000)
Provision for income tax benefit                     478,000        379,000
                                                  ----------     ----------
Net loss                                         $  (708,000)   $  (585,000)
                                                  ==========     ==========

Basic loss per share                             $     (0.96)   $     (0.80)
                                                  ==========     ==========
Weighted average number of shares outstanding        734,183        734,183
                                                  ==========     ==========

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

                                    -5-
<PAGE>

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

For the three months ended September 30,             2007           2006
                                                                (As Restated)
                                                  ----------     ----------

Cash flows from operating activities:
  Net loss                                       $  (708,000)   $  (585,000)
  Adjustments to reconcile net loss
   to net cash provided by operating activities:
    Net unrealized losses on marketable securities   460,000        256,000
    Impairment loss on other investments              65,000              -
    Depreciation and amortization                  1,083,000      1,034,000
    Minority interest                               (278,000)      (373,000)
    Changes in assets and liabilities:
      Investment in marketable securities          4,591,000      2,364,000
      Other investments and other assets             133,000       (767,000)
      Accounts payable and other liabilities       1,192,000        411,000
      Due to securities broker                    (2,907,000)    (1,489,000)
      Obligations for securities sold               (623,000)        (9,000)
      Deferred tax asset                            (478,000)      (379,000)
                                                  ----------     ----------
  Net cash provided by operating activities        2,530,000        463,000
                                                  ----------     ----------

Cash flows from investing activities:
  Capital expenditures for furniture, equipment
   and building improvements                      (1,348,000)      (350,000)
  Investment in real estate                         (973,000)             -
                                                  ----------     ----------
  Net cash used in investing activities           (2,321,000)      (350,000)
                                                  ----------     ----------
Cash flows from financing activities:

  Principal payments on mortgage note payable       (168,000)      (102,000)
                                                  ----------     ----------
  Net cash provided by financing activities         (168,000)      (102,000)
                                                  ----------     ----------
Net increase in cash and cash equivalents             41,000         11,000

Cash and cash equivalents at the beginning
 of the period                                       796,000      2,460,000
                                                  ----------     ----------
Cash and cash equivalents at the end of the
 period                                          $   837,000    $ 2,471,000
                                                  ==========     ==========

Supplemental information:

Margin interest paid                             $    45,000    $    64,000
Mortgage interest paid                           $   702,000    $   749,000


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

                                    -6-
<PAGE>

                      PORTSMOUTH SQUARE, INC.
               NOTES TO THE 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 flow and results of
operations as of and for the periods indicated.

The Company has a 50.0% interest in Justice Investors ("Justice" or the
"Partnership"), a California limited partnership in which Portsmouth serves as
both a general and limited partner. The other general partner, Evon Corporation
("Evon"), serves as the managing general partner of Justice. In accordance with
guidance set forth in the Financial Accounting Standards Board directed Staff
Position (FSP) SOP 78-9-1, Portsmouth has applied the principles of accounting
applicable for investments in subsidiaries due to its "kick out rights" and
"substantive participating rights" arising from its limited partnership and
general partnership interest and has consolidated the financial statements of
Justice with those of the Company, effective with the first reporting period of
its fiscal year beginning July 1, 2006.

Portsmouth is a 68.8%-owned subsidiary of Santa Fe Financial Corporation
("Santa Fe"), which is also a public company.  Santa Fe is an approximately
75.1%-owned subsidiary of The InterGroup Corporation ("InterGroup"), a public
company.  InterGroup also directly owns approximately 10.9% of the common stock
of Portsmouth.

Minority interest on the balance sheet represents the 50% interest in Justice
Investors not owned by the Company.  Minority interest on the statement of
operations represents the minority owner's share of income.  As of September
30, 2007, the Company had a minority interest asset balance on the balance
sheet as the result of the accumulated deficit at Justice Investors.
Management believes the accumulated deficit is considered temporary as the
Hotel was temporary closed to undergo major renovations from May 2005 to
January 2006.  The Company expects the Hotel to be profitable, thereby
reversing the accumulated deficit in the future.

Certain prior quarter balances have been reclassified to conform with the
current quarter presentation.

It is suggested that these financial statements be read in conjunction with the
audited financial statements and the notes therein included in the Company's
Form 10-KSB for the year ended June 30, 2007.

The results of operations for the three months ended September 30, 2007 are not
necessarily indicative of results to be expected for the full fiscal year
ending June 30, 2008.

                                    -7-
<PAGE>

In July 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109,
which clarifies the accounting for uncertainty in tax positions. FIN 48
requires that the Company recognize the impact of a tax position in the
Company's financial statements if that position is more likely than not of
being sustained on audit, based on the technical merits of the position. The
provisions of FIN 48 are effective as of the beginning of the Company's 2008
fiscal year, with the cumulative effect of the change in accounting principle
recorded as an adjustment to opening retained earnings. The adoption of FIN 48
did not to have a material impact on the Company's consolidated financial
statements. The Company recognizes interest and penalties related to uncertain
income tax positions in income tax expense.  There were no interest and
penalties related to uncertain income tax positions that were accrued as of
September 30, 2007 and during the period there were no changes in individual or
aggregate unrecognized tax positions.  The Company's income tax returns for the
years ended June 30, 2004 up to present are subject to examination by major
taxing authorities.

In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
("SFAS 157"), which defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements.  SFAS 157 is
effective for as of the beginning of the Company's 2009 fiscal year.  In
February 2007, the FASB issued Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities -
Including an amendment of FASB Statement No. 115" ("SFAS 159"), which permits
entities to choose to measure many financial instruments and certain other
items at fair value.  SFAS 159 is effective as of the beginning of the
Company's 2009 fiscal year.  The Company is still evaluating the impact of SFAS
157 and 159 on the Company's consolidated financial statements.

RESTATEMENTS

As disclosed in Item 4.02(a) of the Company's Form 8-K dated February 13, 2008,
as filed with the Securities and Exchange Commission ("SEC") on February 19,
2008, the Company detected an error in the calculation and presentation of the
tax effects on the minority interest related to Justice Investors in the
comparative three and six month periods ended December 31, 2006 as presented in
the Company's previously issued Quarterly Report on Form 10-QSB for the period
ended December 31, 2006. Specifically, the minority interest line item in the
Consolidated Statement of Operations was mistakenly recorded and presented as
"net of tax" instead of pre-tax. The errors resulted in an overstatement of the
tax benefit related to the minority interest for the three and six months ended
December 31, 2006. After further review, the Company determined that similar
errors occurred in the quarterly periods ended September 30, 2006 and March 31,
2007.

The errors do not affect the Company's reported revenues, expenses, income
(loss) before income taxes or cash flows, and do not impact the Company's
operations. There were no such errors in the Company's audited financial
statements included in its Annual Report on Form 10-KSB for the fiscal year
ended June 30, 2007, and as such that Annual Report will not be amended.

                                    -8-
<PAGE>

The Company will restate its unaudited financial information for the three and
six month periods ended December 31, 2006 in its Quarterly Report on Form 10-
QSB for the period ended December 31, 2007, which will be filed on February 19,
2008. Upon completion of this filing of the Company's Form 10-QSB/A for the
three months ended September 30, 2007, we will file an amended Quarterly Report
on Form 10-QSB/A for the three and nine months ended March 31, 2007.

Within the current filing, we are restating the Consolidated Statement of
Operations for the three months ended September 30, 2006.

The table below presents the changes to the Consolidated Statement of
Operations for the three months ended September 30, 2006 and the changes to the
Consolidated Balance Sheet as of September 30, 2006.

<TABLE>

For the three months ended September 30, 2006       As Reported      As Restated
                                                    -----------      -----------
<S>                                                 <C>              <C>
Income tax benefit                                  $   526,000      $   379,000
Net loss                                            $  (438,000)     $  (585,000)
Basic loss per share                                $     (0.60)     $     (0.80)


Balance Sheet Line Items as of September 30, 2006   As Reported      As Restated
                                                    -----------      -----------
Other assets                                        $ 2,767,000      $ 2,620,000
Retained earnings                                   $ 2,081,000      $ 1,934,000

</TABLE>

NOTE 2 - INVESTMENT IN HOTEL, NET

Justice owns a 544 room hotel property located at 750 Kearny Street, San
Francisco, California 94108, known as the "Hilton San Francisco Financial
District" (the "Hotel") and related facilities, including a five level
underground parking garage.  Justice serves as the owner/operator of the Hotel
with the assistance of a third party management company. The Partnership also
derives income from the lease of the garage portion of the property to Evon and
from a lease with Tru Spa for a portion of the lobby level of the Hotel.

For the three months ended September 30, 2007 and 2006, the results of
operations for Justice were consolidated with those of the Company.  For
comparative purposes, the statement of operations for the Hotel (on a
standalone basis) for the three months ended September 30, 2007 and 2006, are
included below.

                                    -9-



For the three months ended September 30,       2007            2006
                                            ----------      ----------
Revenues:
 Hotel rooms                              $  7,915,000     $ 5,881,000
 Food and beverage                           1,289,000       1,015,000
 Other operating departments                   146,000         178,000
                                            ----------      ----------
  Total revenues                             9,350,000       7,074,000
                                            ----------      ----------
Operating expenses:
 Hotel rooms                                (2,211,000)     (1,917,000)
 Food and beverage                          (1,447,000)     (1,300,000)
 General and administrative                   (679,000)       (489,000)
 Advertising and sales                        (614,000)       (410,000)
 Franchise fees                               (554,000)       (412,000)
 Repairs and maintenance                      (529,000)       (395,000)
 Utilities                                    (323,000)       (265,000)
 Insurance                                    (239,000)       (286,000)
 CEP fee                                      (373,000)       (213,000)
 Other operating departments                  (300,000)       (185,000)
 Credit card commissions                      (222,000)       (172,000)
 Property taxes                               (177,000)       (180,000)
 Management fees                              (162,000)       (124,000)
 Other expenses                                (83,000)        (14,000)
 Start-up costs - reopening of Hotel                 -         (69,000)
                                            ----------      ----------
  Total operating expenses                  (7,913,000)     (6,431,000)
                                            ----------      ----------
Hotel net income                             1,437,000         643,000

Income (expense) at Justice
 Garage rent                                   415,000         430,000
 General and administrative                 (1,083,000)       (334,000)
 Interest expense                             (702,000)       (749,000)
 Depreciation and amortization expense      (1,083,000)     (1,034,000)
 Other income                                  505,000         313,000
                                            ----------      ----------
Justice net loss                          $   (511,000)    $  (731,000)
                                            ==========      ==========


Property and equipment as of September 30, 2007 consisted of the following:

                                             Accumulated        Net Book
                               Cost          Depreciation        Value
                          ------------       ------------     ------------
Land                      $  1,124,000       $          -     $  1,124,000
Furniture and equipment     15,699,000         (5,595,000)      10,104,000
Building and improvements   44,030,000        (14,266,000)      29,764,000
                          ------------       ------------     ------------
                          $ 60,853,000       $(19,861,000)    $ 40,992,000
                          ------------       ------------     ------------

                                    -10-
<PAGE>



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 inure to its shareholders
through income and/or capital gain.

At September 30, 2007, all of the Company's marketable securities are
classified as trading securities.  In accordance with SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," the change in the
unrealized gains and losses on these investments are included in earnings.

Trading securities are summarized as follows:

<TABLE>

As of September 30, 2007:
                              Gross            Gross             Net            Market
Investment     Cost       Unrealized Gain  Unrealized Loss  Unrealized Gain     Value
----------  -----------   ---------------  ---------------  ---------------  ------------
<S>         <C>              <C>             <C>               <C>           <C>
Corporate
Equities    $ 2,602,000      $2,923,000      ($  862,000)      $2,061,000    $ 4,663,000

</TABLE>

As of September 30, 2007, the Company had $28,000 of unrealized losses related
to securities held for over one year.

As part of the investment strategies, the Company may assume short positions
against its long positions in marketable securities.  Short sales are used by
the Company to potentially offset normal market risks undertaken in the course
of its investing activities or to provide additional return opportunities.  The
Company has no naked short positions.  As of September 30, 2007, the Company
had obligations for securities sold (equities short) of $158,000.

Net gains on marketable securities on the statement of operations are comprised
of realized and unrealized gains (losses).  Below is the composition of the two
components for the three months ended September 30, 2007 and 2006,
respectively.

For the three months ended September 30,              2007             2006
                                                  -----------      -----------
Realized loss on marketable securities            $  (212,000)     $  (141,000)
Unrealized loss on marketable securities             (460,000)        (256,000)
                                                  -----------      -----------
Net losses on marketable securities               $  (672,000)     $  (397,000)
                                                  ===========      ===========


NOTE 4 - INVESTMENT IN REAL ESTATE

In August 2007, the Company agreed to acquire 50% interest in Intergroup
Uluniu, Inc., a Hawaiian corporation ("Uluniu") and a 100% owned subsidiary of
InterGroup, for $973,000, which represents an amount equal to the costs paid by
InterGroup for the acquisition and carrying costs of approximately 2 acres of
unimproved land located in Maui, Hawaii owned by Uluniu.  In September 2007,
the Company paid $758,000 of the $973,000.  With the proceeds, Uluniu paid off
the $750,000 mortgage note on the land including accrued interest.  As a
related party transaction, the fairness of the financial terms of the

                                    -11-
<PAGE>

transaction were reviewed and approved by the independent director of the
Company.  As of September 30, 2007, the Company has an unpaid balance in the
amount of $215,000 related to this transaction.  This amount is included in
accounts payable and other liabilities.  As Portsmouth is a controlled
subsidiary of InterGroup and Portsmouth does not have any independent directors
on the board of Uluniu, that entity will continue to be consolidated into
InterGroup.


NOTE 5 - SEGMENT INFORMATION

The Company operates in two reportable segments, the operation of Justice
Investors and the investment of its cash and securities assets. These two
operating segments, as presented in the 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 months ended
September 30, 2007 and 2006, respectively.  Operating income from Justice
Investors consists of the operations of the hotel and garage.  Operating income
(loss) for investment transactions consist of net investment gains (losses) and
dividend and interest income.

<TABLE>

Three months ended             Hotel       Investment
September 30, 2007           Operations   Transactions      Other          Total
                            -----------  ------------   -----------   ------------
<S>                         <C>           <C>           <C>          <C>
Operating income            $ 9,786,000   $  (713,000)  $         -  $   9,073,000
Operating expenses          (10,297,000)      (93,000)            -    (10,390,000)
                            -----------   -----------   -----------   ------------
Net operating loss             (511,000)     (806,000)            -     (1,317,000)

General and admin. expense                                 (150,000)      (150,000)
Other income                      3,000             -             -          3,000
Income tax benefit                    -             -       478,000        478,000
Minority interest               278,000             -             -        278,000
                            -----------   -----------   -----------   ------------
Net income (loss)           $  (230,000)  $  (806,000)  $   328,000   $   (708,000)
                            ===========   ===========   ===========   ============
Total Assets                $51,625,000   $ 7,088,000   $ 3,491,000   $ 62,204,000
                            ===========   ===========   ===========   ============

</TABLE>
<TABLE>

Three months ended             Hotel      Investment
September 30, 2006           Operations   Transactions      Other          Total
(As Restated)               -----------  ------------   -----------   ------------
<S>                         <C>           <C>           <C>          <C>
Operating income(loss)      $ 7,592,000   $  (372,000)  $         -  $   7,220,000
Operating expenses           (8,323,000)     (107,000)            -     (8,430,000)
                            -----------   -----------   -----------   ------------
Net operating loss             (731,000)     (479,000)            -     (1,210,000)

General and admin. expense                                 (130,000)      (130,000)
Amortization - Justice            3,000             -             -          3,000
Income tax benefit                    -             -       379,000        379,000
Minority interest               373,000             -             -        373,000
                            -----------   -----------   -----------   ------------
Net income (loss)           $  (355,000)  $  (479,000)  $   249,000  $    (585,000)
                            ===========   ===========   ===========   ============
Total Assets                $42,586,000   $11,623,000   $ 9,066,000   $ 63,275,000
                            ===========   ===========   ===========   ============

</TABLE>
                                    -12-
<PAGE>

NOTE 6 - 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
Financial Corporation ("Santa Fe"), and The InterGroup Corporation
("InterGroup"), parent of Santa Fe, based on management's estimate of the pro
rata utilization of resources.  For the three months ended September 30, 2007
and 2006, these expenses were approximately $18,000 for each respective period.

Four of the Company's Directors serve as directors of InterGroup and three of
the Company's Directors serve on the Board of Santa Fe.

The garage lessee, Evon, is the Partnership's managing general partner.  Evon
paid the Partnership $415,000 and $430,000 for the three months ended September
30, 2007 and 2006, respectively, under the terms of the lease agreement.

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.

                                    -13-
<PAGE>

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 the impact of terrorism and war on the
national and international economies, including tourism and securities markets,
natural disasters, general economic conditions and competition in the hotel
industry in the San Francisco area, seasonality, labor relations and labor
disruptions, 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 Form 10-KSB Report for the fiscal year ended June 30, 2007, 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.


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 one of the general partners. Justice owns the land,
improvements and leaseholds at 750 Kearny Street, San Francisco, California,
known as the Hilton San Francisco Financial District hotel (the "Hotel"). The
financial statements of Justice have been consolidated with those of the
Company, effective as of July 1, 2006.  See Note 1 to the Consolidated
Financial Statements.

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.

The Partnership also derives income from the lease of the garage portion of the
property to Evon Corporation ("Evon"), the managing general partner of Justice,
and from a lease with Tru Spa for a portion of the lobby level of the Hotel.
The Company 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.

                                    -14-
<PAGE>

Recent Developments

On October 1, 2007, Justice paid a special distribution to its limited partners
in a total amount of $400,000, of which $200,000 was received by Portsmouth.
The general partners expect to conduct regular reviews to set the amount of any
future distributions that may be appropriate based on the results of operations
of the Hotel and other factors.

On August 29, 2007, the Board of Directors authorized an investment of $973,000
for Portsmouth to acquire a 50% equity interest in Intergroup Uluniu, Inc., a
Hawaii corporation ("Uluniu") in a related party transaction. Uluniu is a 100%
owned subsidiary of The InterGroup Corporation ("InterGroup"). Uluniu owns an
approximately two-acre parcel of unimproved land located in Kihei, Maui, Hawaii
which is held for development. The Company's investment in Uluniu represents an
amount equal to the costs paid by InterGroup for the acquisition and carrying
costs of the property through August 2007. The fairness of the financial terms
of the transaction were reviewed and approved by the independent director of
the Company.

Uluniu intends to obtain the entitlements and permits necessary for the joint
development of the parcel with an adjoining landowner into residential units.
After the completion of this predevelopment phase, the Uluniu will determine
whether it more advantageous to sell the entitled property or to commence with
construction. In September 5, 2007, $758,000 of the investment amount had been
paid by Portsmouth and the proceeds were used by Uluniu to retire the mortgage
on the property in the approximate amount of $750,000. The balance of the
proceeds is expected to be used to fund predevelopment costs and to meet other
requirements to try to enhance the value of the property.  As of September 30,
2007, the Company has an unpaid balance in the amount of $215,000 related to
this transaction.  This amount is included in accounts payable and other
liabilities.


Three Months Ended September 30, 2007 Compared to Three Months
Ended September 30, 2006

The Company had a net loss of $708,000 for the three months ended September 30,
2007 compared to a net loss of $585,000 for the three months ended September
30, 2006.  As discussed below, the increase in the loss was primarily due to
the increase in the net losses from marketable securities partially offset by
the reduction in the net loss from the operations of Justice Investors.

The net loss from the operations of Justice Investors was $511,000 for the
three months ended September 30, 2007, compared to a net loss of $731,000 for
the three months ended September 30, 2006. The decrease in the net loss was
primarily attributable to greater net income generated from the operations of
the Hotel during the current period, partially offset by higher general and
administrative expenses at the Justice level primarily due to certain
nonrecurring legal and consulting fees in the current period related to the
Allied litigation and zoning issues in the approximate amount of $577,000.

For the three months ended September 30, 2007, the operations of the Hotel on a
standalone basis (see Note 2) generated net income of $1,437,000 on total
operating revenues of approximately $9,350,000 compared to net income from
Hotel operations of $643,000 on total operating revenues of $7,074,000 for the
three months ended September 30, 2006 primarily due to higher average daily
room rates and higher average occupancy rates.

                                    -15-
<PAGE>

The following table sets forth the average daily room rate ("ADR"), average
occupancy percentage and room revenue per available room ("RevPar") of the
Hotel for the three months ended September 30, 2007 and 2006.

Three Months Ended        Average           Average
  September 30,          Daily Rate        Occupancy%         RevPar
-----------------        ----------        ----------        ---------
      2007                $177.31            88.8%            $157.75
      2006                $151.03            77.0%            $116.68

Average daily room rates and occupancy have continued to improve since the
Hotel's reopening in January 2006. As a result, the Hotel was able to achieve
an approximately $41 increase in RevPar for the three months ended September
30, 2007 compared the three months ended September 30, 2006.  We believe that
many of the new programs implemented to increase revenues and efficiencies at
the Hotel, as well as certain management personnel changes, have helped improve
operations. While the Hotel's food and beverage operations remain challenging,
management was able to reduce losses in that department during the current
period to approximately $158,000 from approximately $285,000 for the comparable
period in 2006. Due to brand requirements of maintaining a three-meal, full
service restaurant, the associated costs of union labor, and the intense
competition in the San Francisco market for restaurants, food and beverage
operations will continue to be challenging.  Management will continue to work
to address those issues and to explore all options, including new concepts, to
improve the operations of the Hotel.

We expect that the operating results of the Hotel will continue to improve over
fiscal 2007 as the Hotel approaches full stabilization and gets further
penetration into the Financial District hotel market.  We anticipate a
reduction in Partnership general and administrative expenses for legal and
consulting fees in fiscal 2008, as many of those expenses were attributable to
certain nonrecurring legal matters that originated in fiscal 2007 and which we
expect to be resolved in fiscal 2008. If cash flows from the Hotel operations
continue to improve, we also expect that the Partnership will start making more
regular distributions to its limited partners in fiscal 2008.

Net losses on marketable securities increased to $672,000 for the three months
ended September 30, 2007 from $397,000 for the three months ended September 30,
2006. For the three months ended September 30, 2007, the Company had net
realized losses of $212,000 and net unrealized losses of $460,000.  For the
three months ended September 30, 2006, the Company had net realized losses of
$141,000 and net unrealized losses of $256,000.  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 net income.  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 please see the Marketable Securities section
below.

During the three months ended September 30, 2007, the Company performed an
impairment analysis of its other investments and determined that one of its
investments had an other than temporary impairment and recorded an impairment
loss on other investments of $65,000. There was no impairment loss recorded for
the three months ended September 30, 2006.

                                    -16-
<PAGE>

Minority interest decreased to $278,000 for the three months ended September
30, 2007 from $373,000 for the three months ended September 30, 2006, primarily
as the result of the lower loss incurred by Justice Investors.

The provision for income tax benefit increased to $478,000 for the three months
ended September 30, 2007 from $379,000 for the three months ended September 30,
2006 primarily as the result of the increase in the pre-tax loss to $1,186,000
from $964,000, respectively.


MARKETABLE SECURITIES

As of September 30, 2007, the Company had investments in marketable equity
securities of $4,663,000.  The following table shows the composition of the
Company's marketable securities portfolio by selected industry groups as of
September 30, 2007.

                                                              % of Total
                                                              Investment
   Industry Group                      Market Value           Securities
   --------------                      ------------           ----------

   Technology                          $ 1,109,000               23.8%
   Services                                910,000               19.5%
   Dairy products                          819,000               17.6%
   Insurance, banks and brokers            581,000               12.5%
   Telecommunications and media            492,000               10.6%
   Holding companies                       377,000                8.1%
   Building materials                      134,000                2.9%
   Other                                   241,000                5.0%
                                       ------------           ----------
                                       $ 4,663,000              100.0%
                                       ============           ==========

The Company's investment portfolio is diversified with 17 different equity
positions.  The portfolio contains six individual equity securities that are
more than 5% of the equity value of the portfolio with the largest security
being 23.8% 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 the operations of Justice
Investors. The Company also receives revenues generated from its real estate
operations and from the investment of its cash and securities assets. Since the
operations of the Hotel were temporarily closed down 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 its real estate operations and the investment of its cash and
securities assets during that transition period.

                                    -17-
<PAGE>

Prior to operating the hotel as a Hilton, the Partnership was required to make
substantial renovations to the hotel to meet Hilton standards in accordance
with a product improvement plan agreed upon by Hilton and the Partnership, as
well as complying with other brand standards. The total cost of the
construction-renovation project of the Hotel was approximately $37,030,000,
which includes approximately $630,000 in interest costs incurred during the
construction phase that were capitalized.

To meet its substantial financial commitments for the renovation project 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
Prudential 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 all present and future leases and rents. The Prudential Loan is
without recourse to the limited and general partners of Justice. As of
September 30, 2007, the total amount outstanding of the Prudential Loan was
approximately $29,088,000.

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 approximately 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 approximately
$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 without recourse to the limited and general partners of Justice. As of
September 30, 2007, the total amount outstanding of the Second Prudential Loan
was approximately $18,912,000.

From the proceeds of the Second Prudential Loan, Justice retired its existing
line of credit facility with United Commercial Bank ("UCB") paying off the
outstanding balance of principal and interest of approximately $16,403,000 on
March 27, 2007. The Partnership also obtained a new unsecured $3,000,000
revolving line of credit facility from UCB to be utilized by the Partnership to
meet any emergency or extraordinary cash flow needs arising from any disruption
of business due to labor issues, natural causes affecting tourism and other
unexpected events. The term of the new line of credit facility is for 60 months
at an annual interest rate, based on an index selected by Justice at the time
of advance, equal to the Wall Street Journal Prime Rate or the Libor Rate plus
two percent. As of September 30, 2007, there were no amounts borrowed by
Justice under the new line of credit; however, $1,500,000 of that line was
utilized in the form of a standby letter of credit related for the Allied
Litigation. The annual fee for the letter of credit is one and one half percent
of $1,500,000, which fee is to be paid in quarterly installments for the
periods in which the letter of credit is in effect.

                                    -18-
<PAGE>

The Hotel started to generate net income from its operations in June 2006,
which continued to improve during the Company's fiscal year ended June 30,
2007.  As a result, Justice was able to pay a special limited partnership
distribution in a total amount of $1,000,000 on March 28, 2007, of which
Portsmouth received $500,000. The general partners believed that operations of
the Hotel had stabilized under the Hilton brand and new management, and that
cash flows were sufficient to warrant that special distribution, especially
with the new financings in place to meet any additional capital needs. On
October 1, 2007, Justice paid an additional special limited partnership
distribution in the amount of $400,000, of which $200,000 was received by
Portsmouth. The general partners expect to conduct regular reviews to set the
amount of any future distributions that may be appropriate based on the results
of operations of the Hotel and other factors.

While the debt service requirements related to the two Prudential loans, as
well as any utilization of the UCB 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 an number of years,
management believes that cash flows from the operations of the Hotel and the
garage lease 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 statement of operations.

Management believes that its cash, securities assets, 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.

MATERIAL CONTRACTUAL OBLIGATIONS

The Company does not have any material contractual obligations or commercial
commitments other than Justice's mortgage loans with Prudential.

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.

                                    -19-
<PAGE>

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are most significant to the
portrayal 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 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.


Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

The Company's management, with the participation of the Company's Chief
Executive Officer and the 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
fiscal period covered by this Quarterly Report on Form 10-QSB/A.  In connection
with the restatement described in Note 1, to our Consolidated Financial
Statements, management determined that there were material weaknesses in our
internal control over financial reporting in the areas of accounting for
minority interest and tax provisions related to the consolidation of a
partnership entity in prior comparative periods. In light of these material
weaknesses, the Company performed additional analyses and other review
procedures to ensure the Company's Consolidated Financial Statements are
prepared in accordance with generally accepted accounting principles.
Accordingly, management believes that the financial statements included in this
report fairly represent in all material respects the Company's financial
condition, results of operations and cash flows for the periods presented.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a control deficiency, or combination of control
deficiencies, that result in a more than remote likelihood that a material
misstatement of the annual or interim financial statements will not be
prevented or detected. As of September 30, 2007, we did not maintain effective
controls over the accuracy for our accounting for the minority interest and tax
provisions related to our consolidated partnership entity. These control
deficiencies resulted in the restatement of our consolidated financial
statements for the comparative quarterly period ended September 30, 2006. In
addition, due to these control deficiencies, restatements of our consolidated
financial statements for the three and six months ended December 31, 2006 and
for the three and nine months ended March 31, 2007 will also be necessary.

                                    -20-
<PAGE>

(b) 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-QSB/A that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

Remediation of Material Weakness

As noted above, management determined that there were material weaknesses in
our internal controls over financial reporting in the areas of accounting for
the minority interest and tax provisions related to the consolidation of a
partnership entity. In connection with the material weaknesses in internal
controls over financial reporting the Company intends to take the following
steps to alleviate the material weaknesses in these areas:

       *  An additional layer of review of the Company's tax provisions and
          consolidation processes will be performed at the corporate level;

       *  The Company will engage tax consultants to review the Company's tax
          provisions on a quarterly and annual basis; and

       *  The Company will review staffing levels, job assignments, and
          processes to identify other process weaknesses, if any, in order
          to mitigate the risk of reporting errors within the tax process for
          future periods.

Management will continue to monitor internal control over financial reporting
and will modify or implement if necessary, any additional controls or
procedures that may be required to ensure the continued integrity of our
financial statements.


                               PART II.

                          OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

Bacon Plumbing Co., Inc. and Golden Electric Company v. Allied Construction, et
al., San Francisco County Superior Court, Case No. 06-455440.

This is to update matters previously reported in the Company's Form 10-KSB for
its fiscal year ended June 30, 2007, regarding the litigation and lien claims
filed by Allied Construction Management, Inc. ("Allied") and eight
subcontractors arising out of the renovation work performed on the San
Francisco Hotel property. All of those claims were consolidated into the above
entitled action.  On October 23, 2007, the Superior Court entered an order
approving settlements reached by Justice Investor with all of the
subcontractors that filed liens against the Hotel property. The aggregate
amount of those settlements was approximately $1,580,000 and the total amount
of the liens filed by the subcontractors was approximately $1,756,000. The
Court also reduced the lien claim of Allied from $2,061,544 to $1,166,649.
Justice, Evon and Portsmouth dispute the amounts alleged to be owed to Allied
and will vigorously defend the balance of this action against the Allied
claims.

                                    -21-
<PAGE>

Item 6.  Exhibits.

    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.



                                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 25, 2008                   by /s/ John V. Winfield
                                              ---------------------------
                                              John V. Winfield, President,
                                              Chairman of the Board and
                                              Chief Executive Officer


Date:  February 25, 2008                   by /s/ Michael G. Zybala
                                              ---------------------------
                                              Michael G. Zybala,
                                              Vice President and Secretary


Date:  February 25, 2008                   by /s/ David Nguyen
                                              --------------------------
                                              David Nguyen, Treasurer
                                             (Principal Accounting Officer)

                                    -22-