INTERGROUP CORP

Item 1. LEGAL PROCEEDINGS

Portsmouth Square, Inc., through Justice Operating Company, LLC (the “Company”), owns the real property at 750 Kearny Street in San Francisco, which is improved with a 27-story building that houses a Hilton-branded hotel (the “Property”). In connection with City approvals for the development of the Property in the early 1970s, the Company constructed an ornamental concrete overhead pedestrian bridge spanning Kearny Street to the City’s Portsmouth Square park and an underground garage (the “Bridge”), pursuant in part to a Major Encroachment Permit (the “Permit”).

On May 24, 2022, the City purported to revoke the Permit and, on June 13, 2022, directed the Company to submit a general bridge removal and site restoration plan (the “Plan”), and remove the Bridge, at the Company’s expense. The Company disputes the legality of the purported revocation of the Permit and the existence of any obligation to fund removal of the Bridge. Company representatives had participated in meetings with the City on and after August 1, 2019 regarding a potential collaborative Bridge removal process; but until the 2022 purported revocation of the Permit, City representatives repeatedly represented indicated that the City would bear the costs of any removal.

Without waiving any rights, and to evaluate available options and respond to the City’s directives, the Company has engaged a project manager, structural engineer, and architect to advise on the Plan for Bridge removal and reconstruction of the Property’s Kearny Street frontage. The Company continues to work with the City on approvals and permits and is discussing both process and financial responsibility. Those discussions are expected to continue at least through the calendar first two quarters of 2026. A final Plan is not expected to be completed and approved until the first calendar quarter 2026; permits for Bridge demolition are unlikely to be obtained until the second calendar quarter of 2026, and demolition is unlikely to commence before August 2026.

At this time, the Company cannot reasonably estimate a loss or range of loss related to this matter, and no liability has been recorded. The Company disputes that it has any obligation to fund Bridge removal and continues to engage the City regarding process and financial responsibility. No liability has been recorded in the accompanying financial statements.