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LIQUIDITY | 6 Months Ended
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Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
LIQUIDITY | NOTE 2 - LIQUIDITY Historically, the Company has relied primarily on cash flows generated from its real estate operations, including its multifamily properties, as its primary source of liquidity. The Company’s consolidated results also include Hotel operations conducted through Portsmouth, which owns and operates the Hilton San Francisco Financial District (the “Hotel”). The discussion of the San Francisco hospitality market below describes trends affecting the Hotel’s operating results and Portsmouth’s liquidity within the Company’s consolidated group. However, the pace of recovery in the San Francisco hospitality market remains slower than anticipated due to several factors, including a sustained decline in business travel driven by remote work trends, as well as broader municipal challenges such as safety concerns, homelessness, and increased crime. These conditions have limited demand in key customer segments and shifted the Hotel’s revenue base toward lower-yielding leisure travel. Net cash used in operating activities was $319,000 for the six months ended December 31, 2025 and reflects the Company’s consolidated results, including cash flows from its real estate operations, Hotel operations conducted through Portsmouth, and working capital changes. In response to ongoing market pressures affecting the San Francisco hospitality market, Portsmouth has implemented several capital preservation initiatives, including deferral of non-essential capital projects, temporary suspension of certain Hotel services, renegotiation of vendor agreements, and reduction of controllable operating expenses. During the six months ended December 31, 2025, Portsmouth continued to invest in property enhancements, incurring capital expenditure of $1,432,000. These expenditures included the renovation of 14 guest rooms, which had previously been utilized as administrative offices and other uses, and were returned to the Hotel’s available room inventory upon completion in September 2025 (See Note 4). During the same period, the Company made capital improvements in the amount of $521,000 to its multi-family and commercial real estate. As of December 31, 2025, the Company had:
| ● | Cash and cash equivalents of $6,576,000 (compared to $5,092,000 including $8,000 classified as held for sale, as of June 30, 2025);
| ● | Restricted cash of $8,391,000 (compared to $10,103,000, including $45,000 classified as held for sale, as of June 30, 2025);
| ● | Marketable securities, net of margin balances, of $926,000 (compared to $969,000 as of June 30, 2025). These marketable securities are considered liquid and available for short-term needs.
Related Party Financing See Note 12 – Related Party Transactions Real Estate In December 2025, the Company disposed of a non-core 12-unit multifamily property in Los Angeles for $4,850,000. The property had been classified as held for sale at June 30, 2025. Net cash proceeds from the sale were approximately $2,577,000 after the payoff of mortgage debt of approximately $1,834,000. During the six months ended December 31, 2025, the Company did not enter into any new financing arrangements, modifications, or refinancings related to its real estate properties, and there were no material changes to the terms, maturities, or covenants of its existing debt instruments. Liquidity Outlook The Company’s liquidity position remains stable following Portsmouth’s refinancing completed on March 28, 2025 of its senior mortgage and mezzanine debt. See Portsmouth’s Annual Report on Form 10-K for the year ended June 30, 2025 for additional information regarding the refinancing, including maturities, interest terms, covenants, and cash-management provisions. During the six months ended December 31, 2025, the Company did not enter into any additional financing arrangement or refinancings and all debt obligations were current and in compliance with applicable covenants. The Company remains current on all debt service obligations, and management’s forecasts indicate adequate liquidity for the twelve-month period following the issuance of these condensed consolidated 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 arrangements are maintained at Portsmouth’s subsidiary level; 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 Portsmouth’s Annual Report on Form 10-K for the year ended June 30, 2025). The following table summarizes the Company’s material contractual cash obligations as of December 31, 2025, including principal and estimated interest payments, by contractual maturity. Estimated interest amounts are based on contractual terms in effect as of December 31, 2025 and assume scheduled payments are made when due. The table does not reflect potential extension options, prepayments, refinancings, or other modifications that could affect the timing or amounts of future payments. SCHEDULE OF MATERIAL FINANCING OBLIGATION
|  |  |  |  | 6 Months |  |  | Year |  |  | Year |  |  | Year |  |  | Year |  |  |  |
|  | Total |  |  | 2026 |  |  | 2027 |  |  | 2028 |  |  | 2029 |  |  | 2030 |  |  | Thereafter |
Mortgage and subordinated notes payable |  | $ | 195,315,000 |  |  | $ | 594,000 |  |  | $ | 104,858,000 |  |  | $ | 6,589,000 |  |  | $ | 1,846,000 |  |  | $ | 16,033,000 |  |  | $ | 65,395,000 |
Other notes payable |  |  | 1,696,000 |  |  |  | 283,000 |  |  |  | 463,000 |  |  |  | 317,000 |  |  |  | 317,000 |  |  |  | 316,000 |  |  |  | - |
Interest |  |  | 36,235,000 |  |  |  | 5,775,000 |  |  |  | 14,761,000 |  |  |  | 2,643,000 |  |  |  | 2,578,000 |  |  |  | 2,434,000 |  |  |  | 8,044,000 |
Total |  | $ | 233,246,000 |  |  | $ | 6,652,000 |  |  | $ | 120,082,000 |  |  | $ | 9,549,000 |  |  | $ | 4,741,000 |  |  | $ | 18,783,000 |  |  | $ | 73,439,000 |

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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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