INTERGROUP CORP

Previous wording

The Company had net income of $962,000 for the three months ended December 31, 2025 compared to net loss of $3,697,000 for the three months ended December 31, 2024. Net income attributable to The InterGroup Corporation was $1,515,000 for the three months ended December 31, 2025 compared to a net loss attributable to The InterGroup Corporation of $2,725,000 for the three months ended December 31, 2024. The year-over-year improvement was primarily attributable to the $3,508,000 gain on sale of real estate and improved operating results (income from operations increased to $2,015,000 from $853,000), other expenses (expense), net was $12,000 compared to other expense of $4,431,000 in the prior-year period), partially offset by higher income tax expense. The change in other income (expense), net was primarily driven by a smaller net loss on marketable securities (net unrealized loss of $39,000 in 2025 compared to a net unrealized loss of $1,002,000 in 2024, which also included net realized gains of $404,000), partially offset by higher mortgage interest expense and trading and margin interest expense. Net loss attributable to the noncontrolling interest was $553,000 for the three months ended December 31, 2025 compared to $972,000 for the three months ended December 31, 2024.

Current wording

The Company had net income of $595,000 for the three months ended March 31, 2026 compared to net loss of $750,000 for the three months ended March 31, 2025. Net income attributable to The InterGroup Corporation was $457,000 for the three months ended March 31, 2026 compared to a net loss attributable to The InterGroup Corporation of $578,000 for the three months ended March 31, 2025. The year-over-year improvement was primarily attributable to improved operating results (income from operations increased to $4,260,000 from $2,350,000), and lower net losses on marketable securities.

Previous wording

Revenue from real estate operations increased to $4,640,000 for the three months ended December 31, 2025 from $4,476,000 for the three months ended December 31, 2024, primarily reflecting higher rental revenues in the Company’s multifamily portfolio, including improved occupancy. Operating expenses increased to $2,419,000 from $2,208,000, reflecting higher labor-related costs and continued investments in property-level operational efficiency.

Current wording

Revenue from real estate operations decreased to $3,875,000 for the three months ended March 31, 2026 from $4,614,000 for the three months ended March 31, 2025, primarily reflecting higher rental revenues in the Company’s multifamily portfolio, including improved occupancy. Operating expenses decreased to $2,355,000 from $2,431,000, primarily reflecting cost control initiatives at the property level.

Previous wording

The Company had a net loss on marketable securities of $39,000 for the three months ended December 31, 2025 compared to a net loss of $598,000 for the three months ended December 31, 2024. For the three months ended December 31, 2025, the Company recorded a net unrealized loss of $39,000. Given the Company’s relatively modest marketable securities balances ($926,000 at December 31, 2025), period-to-period gains and losses are not expected to be material to consolidated results of operations or liquidity. See Note 6 – Investment in Marketable Securities. For the three months ended December 31, 2024, the Company had a net realized gain of $404,000 and a net unrealized loss of $1,002,000.

Current wording

The Company had a net loss on marketable securities of $49,000 for the three months ended March 31, 2026 compared to a net loss of $1,097,000 for the three months ended March 31, 2025. For the three months ended March 31, 2026, the Company recorded a realized loss of $2,000 and unrealized loss of $47,000. See Note 6 – Investment in Marketable Securities.

Previous wording

The Company had net loss of $197,000 for the six months ended December 31, 2025 compared to net loss of $4,549,000 for the six months ended December 31, 2024. Net income attributable to The InterGroup Corporation was $980,000 for the six months ended December 31, 2025 compared to a net loss attributable to The InterGroup Corporation of $3,123,000 for the six months ended December 31, 2024. The year-over-year improvement was primarily attributable to the $3,508,000 gain on sale of real estate and improved operating results (including an increase in income from operations to $4,747,000 from $3,982,000), partially offset by income tax expense and higher Hotel operating expenses due in part to the absence of a prior-year Hotel management incentive fee waiver (approximately $1.030 million) that reduced Hotel operating expenses during the six months ended December 31, 2024. The improvement also reflected lower mortgage interest expense. The Company’s consolidated results for the six months ended December 31, 2025 also reflect net income attributable to the noncontrolling interest of $1,177,000 compared to $1,426,000 in the prior-year period.

Current wording

The Company had net income of $398,000 for the nine months ended March 31, 2026 compared to net loss of $5,299,000 for the nine months ended March 31, 2025. Net income attributable to The InterGroup Corporation was $1,437,000 for the nine months ended March 31, 2026 compared to a net loss attributable to The InterGroup Corporation of $3,701,000 for the nine months ended March 31, 2025. The year-over-year improvement was primarily attributable to the $3,508,000 gain on sale of real estate and improved operating results (including an increase in income from operations to $9,007,000 from $6,332,000) and lower losses from investments, partially offset by income tax expense and higher Hotel operating expenses due in part to the absence of a prior-year Hotel management incentive fee waiver (approximately $1.030 million) that reduced Hotel operating expenses during the nine months ended March 31, 2025.

Previous wording

The following table sets forth the ADR, occupancy, and RevPAR of the Hotel for the six months ended December 31, 2025 and 2024.

Current wording

The following table sets forth the ADR, occupancy, and RevPAR of the Hotel for the nine months ended March 31, 2026 and 2025.

Previous wording

Revenue from real estate operations increased to $10,135,000 for the six months ended December 31, 2025 from $9,562,000 for the six months ended December 31, 2024, primarily driven by stronger multifamily occupancy and rental rate trends across the portfolio. Operating expenses increased to $4,757,000 from $4,665,000, reflecting higher labor-related costs and property-level operating and maintenance costs.

Current wording

Revenue from real estate operations decreased to $14,010,000 for the nine months ended March 31, 2026 from $14,176,000 for the nine months ended March 31, 2025, primarily driven by stronger multifamily occupancy and rental rate trends across the portfolio. Operating expenses were $7,112,000 for the nine months ended March 31, 2026 compared to $7,096,000 for the nine months ended March 31, 2025.

Previous wording

During the three months ended December 31, 2025, the Company recorded a $3,508,000 gain on the sale of a non-core multifamily property in Los Angeles County, which is included in gain on sale of real estate (see Note 15).

Current wording

During the nine months ended March 31, 2026, the Company recorded a gain on the sale of a non-core multifamily property in Los Angeles County of $3,508,000 (see Note 15).

Previous wording

The Company and Portsmouth compute and file income tax returns separately and, for financial reporting purposes, each entity records a discrete income tax provision. Income tax expense for the six months ended December 31, 2025 and December 31, 2024 primarily reflects the combined income tax effect of Portsmouth’s pretax loss (including Hotel operations) and InterGroup’s standalone pretax income.

Current wording

The Company and Portsmouth compute and file income tax returns separately and, for financial reporting purposes, each entity records a discrete income tax provision. Income tax expense for the nine months ended March 31, 2026 and March 31, 2025 primarily reflects the combined income tax effect of Portsmouth’s pretax loss (including Hotel operations) and InterGroup’s standalone pretax income.

Previous wording

As of December 31, 2025, the Company had cash and cash equivalents of $6,576,000, restricted cash of $8,391,000, and marketable securities (net of margin balances) of $926,000, compared to $5,092,000, $10,103,000, and $969,000, respectively, as of June 30, 2025 (each of the June 30, 2025 amounts includes balances classified as held for sale).

Current wording

As of March 31, 2026, the Company had cash and cash equivalents of $9,283,000, restricted cash of $8,040,000, and marketable securities (net of margin balances) of $1,096,000, compared to $5,092,000, $10,103,000, and $969,000, respectively, as of June 30, 2025. For the comparative period, cash, cash equivalents, and restricted cash include amounts associated with assets classified as held for sale.

Previous wording

InterGroup’s parent-level liquidity is generated primarily from cash flows from its multifamily and commercial real estate operations and cash on hand, and is for corporate overhead, income taxes, debt service on non-hotel mortgages, and capital expenditures across its real estate portfolio. InterGroup does not rely on Portsmouth for parent-level liquidity.

Current wording

InterGroup’s parent-level liquidity is generated primarily from cash flows from its multifamily and commercial real estate operations and cash on hand, and is for corporate overhead, income taxes, debt service on non-hotel mortgages, and capital expenditures across its real estate portfolio. InterGroup does not rely on Portsmouth for parent-level liquidity. In December 2025, the Company sold a non-core 12-unit multifamily property in Los Angeles County that had been classified as held for sale at June 30, 2025. Net proceeds from the sale of approximately $2.6 million were used for general corporate purposes, including working capital.

Previous wording

For additional information regarding Portsmouth’s prior going-concern evaluation and the March 2025 refinancing, see the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 and Portsmouth’s Annual Report on Form 10-K for the year ended June 30, 2025.

Current wording

See the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 and Portsmouth’s Annual Report on Form 10-K for the year ended June 30, 2025 for additional information regarding the March 2025 refinancing and related cash-management provisions.

Previous wording

As of December 31, 2025, the Company’s material contractual obligations (including estimated interest) totaled $233,246,000, consisting of $195,315,000 of mortgage and subordinated notes payable, $1,696,000 of other notes payable, and $36,235,000 of interest. The largest concentration of these obligations occurs in fiscal year 2027, reflecting scheduled maturities and payments totaling $120,082,000. The Company expects to address these obligations through a combination of property-level cash flows, cash on hand, and, as applicable, refinancing or extension alternatives consistent with the terms of its debt arrangements. There can be no assurance that refinancing or extension alternatives will be available on acceptable terms, if at all.

Current wording

As of March 31, 2026, the Company’s material contractual obligations (including estimated interest) totaled $230,598,000, consisting of $195,017,000 of mortgage and subordinated notes payable, $1,554,000 of other notes payable, and $34,027,000 of interest. The largest concentration of these obligations occurs in fiscal year 2027, reflecting scheduled maturities and payments totaling $120,740,000. The Company expects to address these obligations through a combination of property-level cash flows, cash on hand, and, as applicable, refinancing or extension alternatives consistent with the terms of its debt arrangements. There can be no assurance that refinancing or extension alternatives, as applicable, under its debt arrangements.

Previous wording

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. Since Aimbridge has the power and ability under the terms of its management agreement to adjust hotel room rates on an ongoing basis, management believes there has not been a material adverse impact on the Hotel’s revenues due to inflation. For the two most recent fiscal years, the impact of inflation on the Company’s income is not viewed by management as material. However, inflationary pressures on wages, utilities, food and beverage costs, and other operating expenses could adversely affect operating margins to the extent such increases cannot be offset through pricing actions or operating efficiencies.

Current wording

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. Under the Aimbridge management agreement, Aimbridge may adjust hotel room rates on an ongoing basis, and management believes there has not been a material adverse impact on the Hotel’s revenues due to inflation. For the two most recent fiscal years, the impact of inflation on the Company’s income is not viewed by management as material. However, inflationary pressures on wages, utilities, food and beverage costs, and other operating expenses could adversely affect operating margins to the extent such increases cannot be offset through pricing actions or operating efficiencies.

Previous wording

The Company’s residential rental properties provide income from short-term operating leases and no lease extends beyond one year. Accordingly, management believes the Company generally has the ability to adjust rental rates over time to reflect changes in operating costs, although there can be no assurance that rental-rate increases will fully offset inflationary costs pressures.

Current wording

The Company’s residential rental properties provide income from short-term operating leases and no lease extends beyond one year. Accordingly, management believes the Company generally has the ability to adjust rental rates over time to reflect changes in operating costs, although there can be no assurance that rental-rate increases will fully offset inflationary costs pressure.

Previous wording

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 to make estimates about the effect of matters that are inherently uncertain. The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, including those related consolidation, revenue recognition, allowance for credit losses, accrued liabilities, impairment assessments, investments, income taxes, and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, and use the results of those assumptions to form judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. There have been no material changes to the Company’s critical accounting policies during the six months ended December 31, 2025. For a discussion of the Company’s critical accounting policies and estimates, see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Current wording

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 to make estimates about the effect of matters that are inherently uncertain. The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, including those related to consolidation, revenue recognition, allowance for credit losses, accrued liabilities, impairment assessments, investments, income taxes, and contingencies. Actual results could differ from those estimates. There have been no material changes to the Company’s critical accounting policies during the nine months ended March 31, 2026. For a discussion of the Company’s critical accounting policies and estimates, see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Previous wording

We apply ASC 740 in accounting for income taxes. Significant judgment is required to estimate the future tax consequences of events recognized in our condensed consolidated financial statements and tax returns, including the realizability of deferred tax assets and the effects of changes in tax laws or their interpretation. Our income tax returns are subject to examination by the IRS and other taxing authorities; changes in our assessment of these matters could materially affect our consolidated financial statements. We evaluate tax positions taken or expected to be taken on a tax return and recognize benefits only when it is more-likely-than-not that the position will be sustained upon examination, based on the technical merits and assuming full knowledge by the taxing authority. For positions that meet this threshold, the recognized benefit is measured as the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement. Positions that do not meet the recognition threshold are not recognized. Changes in these estimates and judgments could materially affect our condensed consolidated financial statements. We recognize interest and penalties related to uncertain tax positions in income tax expense.

Current wording

We apply ASC 740 in accounting for income taxes. Significant judgment is required to estimate the future tax consequences of events recognized in our condensed consolidated financial statements and tax returns, including the realizability of deferred tax assets and the effects of changes in tax laws or their interpretation. Our income tax returns are subject to examination by the IRS and other taxing authorities; changes in our assessment of these matters could materially affect our condensed consolidated financial statements. We evaluate tax positions taken or expected to be taken on a tax return and recognize benefits only when it is more-likely-than-not that the position will be sustained upon examination, based on the technical merits and assuming full knowledge by the taxing authority. For positions that meet this threshold, the recognized benefit is measured as the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement. Positions that do not meet the recognition threshold are not recognized. Changes in these judgments could materially affect our condensed consolidated financial statements. We recognize interest and penalties related to uncertain tax positions in income tax expense.

Previous wording

When indicators of impairment exist, we compare the carrying amount to the sum of the asset group’s undiscounted cash flows expected from use and eventual disposition. If the carrying amount is not recoverable, an impairment loss is measured as the excess of the carrying amount over fair value. Fair value is estimated using market and/or income approaches, which require significant judgment, including assumptions about occupancy, ADR/RevPAR, operating margins, required capital expenditures, terminal values, and market discount and capitalization rates. Our indicators of impairment assessment consider industry conditions, property location, market dynamics, historical performance, and property-specific facts available at the time; conclusions may vary from period to period as facts change.

Current wording

When indicators of impairment exist, we compare the carrying amount to the sum of the asset group’s undiscounted cash flows expected from use and eventual disposition. If the carrying amount is not recoverable, an impairment loss is measured as the excess of the carrying amount over fair value. Fair value is estimated using market and/or income approaches, which require significant judgment, including assumptions about occupancy, ADR/RevPAR, operating margins, required capital expenditures, terminal values, and market discount and capitalization rates. Our indicators of impairment assessments consider industry conditions, property location, market dynamics, historical performance, and property-specific facts available at the time; conclusions may vary from period to period as facts change.

Previous wording

No impairment losses were recorded for the six months ended December 31, 2025 and 2024, respectively.

Current wording

No impairment losses were recorded for the nine months ended March 31, 2026 and 2025, respectively.

Previous wording

We account for stock-based compensation by measuring and recognizing as compensation cost the fair value of all share-based payment awards made to employees, including employee stock options, restricted stock awards and purchases under our Employee Stock Purchase Plan (“ESPP”), based on estimated grant-date fair values. The determination of fair value involves significant judgment. We use the Black-Scholes option pricing model to estimate the value of employee stock options which requires assumptions, including the expected volatility of our stock and employee exercise behavior, which are based on historical data as well as expectations of future developments over the term of the options.

Current wording

We account for stock-based compensation by measuring and recognizing as compensation cost the fair value of all share-based payment awards made to employees, including employee stock options, restricted stock awards and purchases under our Employee Stock Purchase Plan (“ESPP”), based on estimated grant-date fair values. The determination of fair value involves significant judgment. We use the Black-Scholes option pricing model to estimate the value of employee stock options which require assumptions, including the expected volatility of our stock and employee exercise behavior, which are based on historical data as well as expectations of future developments over the term of the options.