INTERGROUP CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

(UNAUDITED)

NOTE 1 -BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of The InterGroup Corporation (“InterGroup” or the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. The results of operations for the interim periods presented are not necessarily indicative of results expected for the full fiscal year. The unaudited condensed consolidated financial statements include the accounts of our wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of InterGroup and the notes therein included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025. The June 30, 2025 condensed consolidated balance sheet was derived from the audited consolidated balance sheet included in the Company’s Form 10-K for the year ended June 30, 2025.

InterGroup consolidates its majority-owned subsidiaries, including Portsmouth Square, Inc. (“Portsmouth”), and all intercompany balances and transactions are eliminated. As of March 31, 2026, InterGroup owned approximately 75.9% of Portsmouth’s outstanding common shares.

InterGroup’s activities include: (i) hospitality through Portsmouth’s ownership of the Hilton San Francisco Financial District (consolidated in InterGroup’s financial statements), and (ii) real estate investment and rental operations (apartment complexes, a commercial property, and certain strategic single-family holdings), primarily located in Texas and Southern California.

The preparation of interim financial statements in conformity with U.S. GAAP 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

There have been no material changes to the Company’s significant accounting policies during the nine months ended March 31, 2026. Please refer to the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 for a summary of the significant accounting policies.

As previously disclosed, Portsmouth completed a refinancing in March 2025 that extended maturity and improved liquidity. As a result, substantial doubt regarding Portsmouth’s ability to continue as a going concern was alleviated as of June 30, 2025.

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

Recently Issued and Adopted Accounting Pronouncements

The Company’s Annual Report on Form 10-K for the year ended June 30, 2025, contains a discussion of the recently issued accounting pronouncements. As of March 31, 2026, there was no material impact from the recent adoption of new accounting pronouncements, nor is any material impact expected from recently issued accounting pronouncements yet to be adopted, on the Company’s condensed consolidated financial statements. Management does not expect recently issued accounting pronouncements not yet adopted to have a material impact on the Company’s condensed consolidated financial statements.

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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 provided by operating activities was $2,670,000 for the nine months ended March 31, 2026 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 nine months ended March 31, 2026, Portsmouth continued to invest in property enhancements, incurring capital expenditure of $1,786,000. 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 $685,000 to its multi-family and commercial real estate.

As of March 31, 2026, the Company had:

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 nine months ended March 31, 2026, 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 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 refinancing, including maturities, interest terms, covenants, and cash-management provisions. During the nine months ended March 31, 2026, 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 its debt service obligations as of March 31, 2026.

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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 Note 13).

The following table summarizes the Company’s material contractual cash obligations as of March 31, 2026, including principal and estimated interest payments, by contractual maturity. Estimated interest amounts are based on contractual terms in effect as of March 31, 2026 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.

NOTE 3 –REVENUE

Our revenue from real estate is primarily rental income from residential and commercial property leases that is accounted for under ASC 842, Leases, and is recognized on a straight-line basis over the lease term. Rental income from residential leases is generally recognized as earned on a monthly basis, consistent with lease terms.

The following table presents Hotel revenues disaggregated by major revenue source for the three and nine months ended March 31, 2026 and 2025:

Performance Obligations

We identified the following performance obligations for which revenue is recognized when (or as) the performance obligations are satisfied, in an amount that reflects the consideration we expect to be entitled to in exchange for providing the goods or services:

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Hotel revenue primarily consists of Hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking). Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component.

We do not disclose the value of unsatisfied performance obligations for contracts with an expected length of one year or less. Due to the nature of our business, our revenue is not significantly impacted by refunds. Cash payments received in advance of guests staying at our Hotel are refunded if the guest cancels within the specified time period, before any services are rendered. Refunds related to service are generally recognized as an adjustment to the transaction price at the time the Hotel stay occurs or services are rendered.

Contract Assets and Liabilities

The Company does not have any material contract assets as of March 31, 2026, and June 30, 2025, other than trade and other receivables, net on our condensed consolidated balance sheets. Our receivables are primarily the result of contracts with customers, and are presented net of an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected.

Portsmouth records contract liabilities when cash payments are received or due in advance of guests staying at the Hotel, which are presented within accounts payable and other liabilities - Hotel on the Company’s condensed consolidated balance sheets. Contract liabilities had an opening balance of $505,000 at July 1, 2025. Contract liabilities were $623,000 as of March 31, 2026. The increase as of March 31, 2026 was primarily driven by an increase in advance deposits received from customers for services to be performed after March 31, 2026. During the nine months ended March 31, 2026, we recognized $505,000 of revenue that was included in the contract liability balance at July 1, 2025.

Contract liabilities were $370,000 as of July 1, 2024 and decreased to $290,000 as of March 31, 2025. During the nine months ended March 31, 2025, we recognized $370,000 of revenue that was included in the contract liability balance at July 1, 2024.

Contract Costs

We consider sales commissions earned to be incremental costs of obtaining a contract with our customers. As a practical expedient, we expense these costs as incurred as our contracts with customers are less than one year.

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NOTE 4 –INVESTMENT IN HOTEL, NET

Investment in Hotel consisted of the following as of March 31, 2026 and June 30, 2025:

Finance lease right-of-use assets related to equipment are recorded at cost and amortized on a straight-line basis over the lease term. Furniture and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, which generally range from 3 to 7 years. Building and improvements are recorded at cost and depreciated on a straight-line basis over estimated useful lives ranging from 15 to 39 years. Construction-in-progress is not depreciated until the assets are placed in service.

Depreciation expense related to the Hotel for the nine months ended March 31, 2026 and 2025 was $2,780,000 and $2,731,000, respectively, and is included in depreciation and amortization expense in the Company’s condensed consolidated statements of operations.

During the nine months ended March 31, 2026, Portsmouth continued property enhancements, including the renovation of 14 guest rooms that were returned to available room inventory upon completion in September 2025 (see Note 2).

NOTE 5 –INVESTMENT IN REAL ESTATE, NET

At March 31, 2026, the Company’s investment in real estate consisted of twenty properties located throughout the United States. These properties include fifteen apartment complexes, three single-family houses as strategic investments, and one commercial real estate property. The Company also owns unimproved land located in Maui, Hawaii.

Investment in real estate consisted of the following:

In April 2025, the Company determined that one multifamily property located in Los Angeles met the criteria for classification as held for sale as of June 30, 2025. The property was sold in December 2025, and the Company recognized a gain on sale of $3,508,000 during the nine months ended March 31, 2026 (see Note 15 – Disposition of Real Estate).

Building, improvements, and equipment are stated at cost, depreciated on a straight-line basis over their useful lives ranging from 5 to 40 years. During the nine months ended March 31, 2026, the Company invested $685,000 in capitalized improvements. Depreciation expense related to the Company’s investment in real estate for the nine months ended March 31, 2026 and 2025 was $2,284,000 and $2,236,000, respectively, and is included in depreciation and amortization expense in the Company’s condensed consolidated statements of operations.

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NOTE 6 –INVESTMENT IN MARKETABLE SECURITIES

The Company’s investment in marketable securities consists primarily of corporate equity securities. From time to time, the Company may also invest in income-producing securities, including equity securities of real estate-based companies and REITs.

As of March 31, 2026, and June 30, 2025, all of the Company’s marketable equity securities are measured at fair value with changes recognized in earnings in accordance with ASC 321. Unrealized gains and losses on these investments are included in earnings in the period of change. The portfolio is held in a brokerage account and may be subject to margin; see Note 2 for amounts presented net of margin balances.

The following table summarizes the Company’s marketable equity securities, measured at fair value, as of March 31, 2026 and June 30, 2025:

In the table above, cost represents the original purchase cost and gross unrealized gains and losses represent the difference between cost and fair value as of each balance sheet date. Amounts discussed in Note 2 are presented net of margin balances, if any.

The following tables present realized and unrealized gains (losses) on marketable securities for the three and nine months ended March 31, 2026 and 2025, respectively:

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NOTE 7 -FAIR VALUE MEASUREMENTS

The carrying values of the Company’s financial instruments that are not required to be measured at fair value on a recurring basis approximate fair value due to their short maturities (e.g., accounts receivable, other assets, accounts payable and other liabilities, and obligations for securities sold) or the nature and terms of the underlying arrangements (e.g., other notes payable and mortgage notes payable).

The assets and liabilities measured at fair value on a recurring basis are as follows:

Recurring fair value measurements include the following:

In March 2025, Portsmouth, a consolidated subsidiary of the Company (through its affiliate Justice Operating Company, LLC), entered into an interest rate cap agreement (the “Interest Rate Cap”) with Goldman Sachs Bank USA in connection with a variable-rate mortgage loan. The Interest Rate Cap limits Term SOFR to 4.50% and has a notional amount equal to or greater than the outstanding principal balance of the loan. The Company paid a premium of approximately $136,000 at inception. Changes in the fair value of the Interest Rate Cap are recorded in Other Income (Expense) in the condensed consolidated statements of operations. The Interest Rate Cap is not designated as a hedging instrument under ASC 815 and is accounted for at fair value, with changes in fair value recognized in earnings each reporting period. The Interest Rate Cap is classified as a Level 2 within the ASC 820 fair value hierarchy (see Note 13).

The following table summarizes the fair value of the derivative instrument as of March 31, 2026:

The Company did not record any material nonrecurring fair value measurements (e.g., long-lived asset impairments) during the nine months ended March 31, 2026 or 2025. See Notes 4 and 5 for additional information regarding long-lived assets.

There have been no material changes to the Company’s fair value measurement methodologies or classification of instruments during the periods presented, and there were no transfers between levels 1, 2, and 3 during the nine months ended March 31, 2026 or 2025.

NOTE 8 –CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:

Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three months or less at the date of purchase. Amounts are recorded within “cash and cash equivalents” on the condensed consolidated balance sheets. For the comparative period, cash, cash equivalents, and restricted cash include amounts associated with assets classified as held for sale.

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Restricted cash consists primarily of funds held in lender-controlled accounts (lockbox/cash-management structure) related to the Hotel’s mortgage and mezzanine financing, including escrows and reserves for real estate taxes and insurance, replacement/FF&E and capital additions, and other amounts required by the loan agreements. Restricted cash is classified within current or noncurrent assets on the condensed consolidated balance sheets based on the expected timing of use. These cash-management/lockbox provisions relate to the Hotel financing maintained at Portsmouth, a consolidated subsidiary of the Company (see Note 13 – Mortgage Notes Payable and Mezzanine Financing).

Accordingly, the total of cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows equals the sum of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheet.

NOTE 9 –STOCK BASED COMPENSATION PLANS

The Company follows ASC Topic 718, Compensation – Stock Compensation, which addresses accounting for equity-based compensation arrangements, including employee stock options.

For additional information regarding the Company’s stock-based compensation plans, see Note 15 – Stock Based Compensation Plans in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025.

There were no new stock option grants or modifications during the nine months ended March 31, 2026.

Stock option valuation assumptions are consistent with those described in Note 15 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2025.

During the nine months ended March 31, 2026 and 2025, the Company recorded stock-based compensation expense of $36,000 and $85,000, respectively, related to stock options. As of March 31, 2026, the aggregate intrinsic value of options outstanding and exercisable was $3,018,000. During the nine months ended March 31, 2026, approximately 100,000 stock options expired unexercised.

The following table summarizes the stock options activity from July 1, 2024 to March 31, 2026:

As of March 31, 2026, unrecognized compensation cost related to unvested stock options was not material and is expected to be recognized over a weighted-average period of approximately 3.85 years. Cash received from option exercises was $0 for each of the nine months ended March 31, 2026 and 2025, and the total intrinsic value of options exercised was also $0 for those periods. Weighted-average grant-date fair value of options granted was not applicable for 2025 (no grants) and was not material for 2024. Approximately 214,000 shares remained available for future grant under the 2010 Incentive Plan as of March 31, 2026 (see the Company’s Form 10-K for the year ended June 30, 2025).

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NOTE 10 –SEGMENT INFORMATION

The Company operates inthree reportable segments: (i) Hotel Operations (the Hilton San Francisco Financial District and its five-level parking garage), (ii) Real Estate Operations (the multifamily and commercial rental portfolio), and (iii) Investment Transactions (investment of cash in marketable securities and other investments). The chief operating decision maker (“CODM”) is a group of senior executives who collectively use segment results to evaluate performance and allocate resources based on the information described below.

Segment results are evaluated using segment income (loss), which reflects revenues from external customers less segment operating expenses, including property operating expenses, utilities, real estate taxes, insurance and certain general and administrative expenses, as presented in the table below. Segment income (loss) excludes interest expense, depreciation and amortization, gain on sale of real estate, net gains (losses) from investments, gains (losses) on extinguishment of debt, and income taxes, which are reflected below segment income (loss) as reconciling items to consolidated income (loss). There are no intersegment revenues. “Corporate” consists primarily of unallocated corporate general and administrative costs and other items not allocated to the reportable segments.

All long-lived assets and revenues are attributable to operations in the United States.

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For the three months ended March 31, 2026, segment income increased to $5,968,000 from $4,001,000 for the three months ended March 31, 2025, reflecting improved results in Hotel Operations and higher segment income in Real Estate Operations. Hotel Operations segment income increased to $5,123,000 from $2,525,000, while Real Estate Operations segment income decreased to $1,520,000 compared to $2,183,000. Corporate expense decreased to $675,000 from $707,000. Net income was $595,000 for the three months ended March 31, 2026, compared to a net loss of $750,000 for the three months ended March 31, 2025. The improvement was primarily attributable to lower loss from investments to $342,000 compared to $1,379,000.

For the nine months ended March 31, 2026, segment income increased to $14,071,000 from $11,299,000 for the nine months ended March 31, 2025. Hotel Operations segment income increased to $9,294,000 from $6,463,000, and Real Estate Operations segment income decreased to $6,898,000 from $7,080,000. Corporate expense was $2,121,000 compared to $2,244,000. Net income was $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, primarily reflecting a gain on sale of real estate of $3,508,000 in 2026 (none in 2025), a decrease in loss from investments to $841,000 from $2,388,000, and a decrease in mortgage interest expense to $9,607,000 from $10,196,000, partially offset by income tax expense of $1,793,000 in 2026 compared to $463,000 in 2025. For the nine months ended March 31, 2025 the Hotel segment also benefited from lower expenses due to a management incentive fee waiver.

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NOTE 11 –OTHER NOTES PAYABLE

The following summarizes the balances of other notes payable as of March 31, 2026 and June 30, 2025, respectively:

Hilton Development Incentive

The note payable to Hilton (the franchisor) represents a self-exhausting, interest-free development incentive that is reduced by approximately $317,000 annually through January 2030, provided the Hotel continues to operate as a Hilton franchise.

Hotel Management Key Money

On February 1, 2017, Justice Operating Company, LLC (“Operating”) entered into a Hotel Management Agreement (the “HMA”) with Aimbridge Hospitality (“Aimbridge”) to manage the Hotel, with an effective takeover date of February 3, 2017. The term of the HMA is for an initial period of 10 years and automatically renews for up to five additional years in aggregate, subject to certain conditions. The HMA also provides for Aimbridge to advance a “key money” incentive payment to the Hotel for capital improvements in the amount of $2,000,000 pursuant to a separate key money agreement. The key money contribution is amortized in equal monthly amounts over an eight (8) year period commencing on the second anniversary of the takeover date. The unamortized portion of the key money was $208,000 and $396,000 at March 31, 2026, and June 30, 2025, respectively, and is included in other notes payable in the condensed consolidated balance sheets.

Future expected reductions of the carrying amounts of other notes payable (including amortization of the Aimbridge key money and the scheduled reductions of the Hilton development incentive) are as follows:

NOTE 12 –RELATED PARTY TRANSACTIONS

To supplement its liquidity position, Portsmouth maintains access to an unsecured loan facility made available by the Company (the “Facility”), with InterGroup as lender and Portsmouth, a consolidated subsidiary, as borrower. The initial facility, dated July 2, 2014, has undergone several amendments. In March 2025, the Facility was amended to (i) increase the available borrowing capacity to $40,000,000, and (ii) extend the maturity date to July 31, 2027. The facility bears interest at 9%. As of March 31, 2026, the outstanding loan balance was $38,108,000, with no principal repayments made to date, and is payable at maturity. Amounts due under the Facility are eliminated in consolidation. See Note 1 for the Company’s consolidation policy.

Four of the Portsmouth directors serve as directors of InterGroup. The Company’s Chief Operating Officer, David C. Gonzalez, was elected President of Portsmouth in May 2021. The Company’s director and Chairman of the Audit Committee, William J. Nance, also serves as a director of Portsmouth.

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As Chairman of the Executive Strategic Real Estate and Securities Investment Committee, the Company’s President and Chief Executive Officer (CEO), John V. Winfield, directs the investment activity of the Company in public and private markets pursuant to authority granted by the Board of Directors. Mr. Winfield also serves as Chief Executive Officer and Chairman of the Board of Portsmouth and oversees the investment activity of Portsmouth. Effective June 2016, Mr. Winfield became the Managing Director of Justice and served in that position until the dissolution of Justice in December 2021. Depending on certain market conditions and various risk factors, the Chief Executive Officer and Portsmouth (a consolidated subsidiary) may, at times, invest in the same companies in which the Company invests. Such investments align the interests of the Company with the interests of related parties because it places the personal resources of the Chief Executive Officer and the resources of Portsmouth, at risk in substantially the same manner as the Company in connection with investment decisions made on behalf of the Company.

All of Portsmouth’s directors serve as directors of InterGroup — John V. Winfield, William J. Nance, Andrew Kaplan, Yvonne Murphy, and Steve Grunwald. Mr. Winfield is Chairman of the Board and Chief Executive Officer of both Portsmouth and InterGroup. He served as Managing Director of Justice until its dissolution in December 2021.

Portsmouth encourages investments by its CEO and InterGroup in the same companies in which Portsmouth invests, as such alignment of interests places personal and affiliate capital at risk alongside Company capital.

NOTE 13 –MORTGAGE NOTES PAYABLE AND MEZZANINE FINANCING

The Company’s mortgage notes payable consist of (i) the senior mortgage loan secured by the Hilton San Francisco Financial District hotel (the “Hotel”), maintained at Portsmouth, a consolidated subsidiary of the Company, and (ii) mortgage loans secured by the Company’s non-hotel real estate properties. The following table summarizes the schedule maturities of mortgage notes payable as of March 31, 2026:

Hotel Mortgage and Mezzanine Financing

The Company’s Annual Report on Form 10-K for the year ended June 30, 2025 includes a detailed description of the Hotel senior mortgage and mezzanine financing arrangements, including the March 28, 2025 refinancing and related covenants and cash-management provisions. There were no material changes to the terms of these arrangements during the nine months ended March 31, 2026.

Senior Mortgage and Mezzanine Financing (Current Facilities)

On March 28, 2025, the Company refinanced the senior mortgage and amended and restated the mezzanine loan, fully retiring the prior facilities.

Portsmouth and the Company continue to provide a limited guaranty in connection with both facilities. The Company is also subject to customary covenants, including financial ratios and affirmative obligations.

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DSCR and Lockbox Arrangements

Operating has not met the Debt Service Coverage Ratio (“DSCR”) threshold required to permit distributions and release of the cash-management/lockbox arrangements in prior periods. Under the loan agreements, the DSCR threshold must be satisfied for two consecutive quarters in order to permit distributions and release of the lockbox arrangements. Although the DSCR threshold was satisfied for the quarter ended March 31, 2026, the lockbox arrangements remained in effect as of March 31, 2026 because the two-consecutive-quarter requirement had not yet been met. Cash receipts from the Hotel are deposited into lender-controlled accounts, with controlled disbursements based on agreed-upon budget approvals.

InterGroup Real Estate Mortgages (Non-Hotel)

In December 2025, the Company disposed of a non-core 12-unit multifamily property in Los Angeles. This property had been classified as held for sale at June 30, 2025.

During the nine months ended March 31, 2026, the Company did not enter into any new financing arrangements, modifications, or refinancings related to its non-hotel real estate properties. All mortgage loans remained in good standing and in compliance with their terms and conditions.

NOTE 14 –ACCOUNTS PAYABLE AND OTHER LIABILITIES

The following summarizes the components of accounts payable and other liabilities as of March 31, 2026 and June 30, 2025:

Accounts payable and other liabilities consist primarily of amounts incurred in the ordinary course of business. Trade payables represent amounts owed to vendors for operating and capital items. Advance deposits consist primarily of customer deposits received in advance of providing services, including deposits related to Hotel stays and events (see Note 3). Accrued payroll and related liabilities include wages, bonuses, and employee-related accruals. Mortgage interest payable represents accrued interest on the Company’s mortgage debt (see Note 13). Withholding and other taxes payable consist primarily of payroll-related and other taxes owed. Security deposits primarily represent tenant deposits associated with the Company’s real estate operations. Franchise fees payable and management fees payable relate to Hotel operations. Certain components, such as security deposits and accrued mortgage interest, are settled in the ordinary course in accordance with their underlying terms.

NOTE 15 –DISPOSITION OF REAL ESTATE

As previously disclosed, on February 24, 2025, the Company executed a listing agreement to market for sale a 12-unit multifamily property located in Los Angeles County, California, and the property was classified as held for sale as of June 30, 2025, after management determined that the criteria in ASC 360-10-45-9 were met. The sale was completed in December 2025 for a sales price of $4.85 million, resulting in a gain on sale of $3,508,000, which is included in gain on sale of real estate in the condensed consolidated statements of operations (see Note 5).

In connection with the sale, the related mortgage loan with an outstanding principal balance of $1,834,000 (fixed interest rate of 3.59% and a maturity date of June 23, 2026) was repaid in full at closing, and net cash proceeds from the sale after closing costs were approximately $2,577,000.

No assets were classified as held for sale as of March 31, 2026.

NOTE 16 –SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date that the accompanying condensed consolidated financial statements were available to be issued, and determined that no events occurred during the subsequent event evaluation period that require recognition or additional disclosure in the accompanying condensed consolidated financial statements. The evaluation period extended through May 11, 2026.

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