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LIQUIDITY | 12 Months Ended
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Jun. 30, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
LIQUIDITY | NOTE 2 – LIQUIDITY Historically, the Company has relied primarily on cash flows generated by its multi-family and commercial real estate portfolio and, to a lesser extent, returns from its investment portfolio. Cash generated by the Hilton San Francisco Financial District (the “Hotel”) is owned by our consolidated subsidiary, Portsmouth Square, Inc. (“Portsmouth”), is subject to lender-controlled cash-management arrangements, and is not available for InterGroup’s general corporate purposes. Portsmouth has not paid dividends to its shareholders in over a decade. Although conditions in the San Francisco hospitality market remain a headwind for Portsmouth—reflecting the pace of business-travel recovery and certain municipal factors—those trends affect consolidated results but do not represent InterGroup’s source of liquidity. For the year ended June 30, 2025, consolidated net cash provided by operating activities was $5,893,000. In response to ongoing market pressures at the Hotel, Portsmouth continued capital-preservation initiatives (including deferral of non-essential projects, selective service reductions, vendor negotiations and other controllable cost actions) while investing in property enhancements, incurring $2,252,000 of Hotel capital expenditures, including the renovation of 14 rooms previously used as administrative offices back to guest-room inventory. During the same period, InterGroup made $1,739,000 of capital improvements across its multi-family and commercial real estate portfolio. As of June 30, 2025, the Company had:
| ● | Cash and cash equivalents of $5,092,000 (including $8,000 classified as held for sale) (compared to $4,333,000 as of June 30, 2024),
| ● | Restricted cash of $10,103,000 (including $45,000 classified as held for sale) (compared to $4,361,000 as of June 30, 2024), and
| ● | Marketable securities, net of margin balances, of $969,000 (compared to $7,266,000 as of June 30, 2024).
Marketable securities are considered liquid and available for near-term needs, subject to market risk and any account-level margin requirements. Restricted cash primarily reflects lender-controlled reserves at Portsmouth (e.g., taxes, insurance, FF&E) and funds held under the Hotel’s cash-management arrangements and is not available for InterGroup’s general corporate purposes. Related Party Financing InterGroup maintains access to an unsecured related-party facility with Portsmouth as previously disclosed; however, the Hotel is currently self-funded under its lender-controlled cash-management structure, and no additional borrowings were required by Portsmouth to fund Hotel operations following the March 28, 2025 refinancing. The initial facility, dated July 2, 2014, has undergone several amendments. In March 2025, the facility was amended to:
| ● | Increase the available borrowing capacity to $40,000,000, and
| ● | Extend the maturity date to July 31, 2027.
In May 2025, the facility was amended to:
| ● | Reduce the interest rate from 12% to 9%.
During the year ended June 30, 2025, Portsmouth borrowed an additional $11,615,000 under the facility primarily to reduce its senior loan balance and established a $5.0 million cash operating reserve required by the new senior lender in connection with the March 28, 2025 refinancing. As of June 30, 2025, the outstanding intercompany balance was $38,108,000, with no principal repayments made to date. The facility is interest-only, prepayable without penalty, and bears interest at 9% per annum; principal and accrued interest are due at maturity All material intercompany accounts and transactions have been eliminated in consolidation. Cash Management and Distribution Restrictions (Hotel Subsidiary) Under Portsmouth’s March 28, 2025 refinancing, a lender-controlled lockbox and ongoing DSCR requirements apply to hotel cash flows. Until DSCR thresholds are met for two consecutive quarters, substantially all hotel receipts are deposited into lender-controlled accounts and disbursed pursuant to lender-approved budgets for operating expenses, debt service, and required reserves (e.g., taxes, insurance, and FF&E). During the fiscal year ending June 30, 2025, the Company refinanced the mortgage on its 157-unit apartment located in Florence, Kentucky in the amount of $9,800,000. The term of the loan is approximately 10 years with an interest rate at 5.40%. The loan matures in January 2035. In May 2025 the Company amended the agreement on its St. Louis, Missouri property to a new loan maturity of June 5, 2028. In May 2025 the Company made a principal reduction payment of $344,000. Liquidity Outlook and Going Concern Management has concluded there are no conditions or events, considered in the aggregate and know or reasonably knowable, that raise substantial doubt about Portsmouth’s ability to continue as a going concern within one year after the date these financial statements are issued (ASC 205-40). This conclusion is based on the successful refinancing of the senior mortgage loan and modification of the mezzanine debt on March 28, 2025, resulting in improved maturity profiles, covenant compliance, and a stable capital structure. Portsmouth remains current on all debt service obligations, and management’s forecasts indicate adequate liquidity for the twelve-month period following the issuance of these financial statements. Forward-looking risks remain primarily tied to the performance of the San Francisco hospitality market, including:
| ● | The pace of recovery in business travel,
| ● | Competitive dynamics among local hotels,
| ● | Broader municipal issues affecting the city’s perception among travelers, and
| ● | Potential impacts from macroeconomic trends on leisure travel demand.
Management will continue to monitor these market-specific conditions and adjust operations, capital allocation, and marketing strategies to maintain the Hotel’s competitive position. The Hotel debt and cash-management/lockbox reside at Portsmouth’s subsidiaries; while these provisions may limit distributions upstream to InterGroup while in effect, they do not encumber InterGroup’s non-Hotel properties or parent-level liquidity. InterGroup’s exposure to the Hotel financing is limited to its guaranties of specified non-recourse carve-outs and defined springing recourse events (see Note 10; ASC 460). Material Cash Requirements – Contractual Obligations The following table provides a summary as of June 30, 2025 of the Company’s material contractual financial obligations, including estimated interest payments. SCHEDULE OF MATERIAL FINANCING OBLIGATION
|  |  |  |  | Year |  |  | Year |  |  | Year |  |  | Year |  |  | Year |  |  |  |
|  | Total |  |  | 2026 |  |  | 2027 |  |  | 2028 |  |  | 2029 |  |  | 2030 |  |  | Thereafter |
Mortgage and subordinated notes payable |  | $ | 197,760,000 |  |  | $ | 1,229,000 |  |  | $ | 106,663,000 |  |  | $ | 6,588,000 |  |  | $ | 1,845,000 |  |  | $ | 16,032,000 |  |  | $ | 65,403,000 |
Other notes payable |  |  | 1,979,000 |  |  |  | 567,000 |  |  |  | 463,000 |  |  |  | 317,000 |  |  |  | 317,000 |  |  |  | 315,000 |  |  |  | - |
Interest |  |  | 40,807,000 |  |  |  | 11,665,000 |  |  |  | 13,418,000 |  |  |  | 2,645,000 |  |  |  | 2,580,000 |  |  |  | 2,436,000 |  |  |  | 8,063,000 |
Total |  | $ | 240,546,000 |  |  | $ | 13,461,000 |  |  | $ | 120,544,000 |  |  | $ | 9,550,000 |  |  | $ | 4,742,000 |  |  | $ | 18,783,000 |  |  | $ | 73,466,000 |

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- Definition The entire disclosure when substantial doubt is raised about the ability to continue as a going concern. Includes, but is not limited to, principal conditions or events that raised substantial doubt about the ability to continue as a going concern, management's evaluation of the significance of those conditions or events in relation to the ability to meet its obligations, and management's plans that alleviated or are intended to mitigate the conditions or events that raise substantial doubt about the ability to continue as a going concern. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 40 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-40/tableOfContent + Details
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