UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~December 31, 2019

¨[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to_________

Commission File Number 1-10324

THE INTERGROUP CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE		13-3293645
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification No.)

~~11620~~12121 Wilshire Boulevard, Suite ~~350,~~610, Los Angeles, California 90025

(Address of principal executive offices) (Zip Code)

(310) 889-2500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x[X] Yes¨ [ ] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x[X] Yes¨ [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

	Large accelerated filer¨ [ ]	Accelerated filer¨ [ ]

	Non-accelerated filer¨ [ ]	Smaller reporting companyx [X]

		Emerging growth company¨ [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨ [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act):

[ ] Yesx [X] No

Securities registered pursuant to ~~Section~~section 12(b) of the Act:

Title of each ~~class:~~class		Trading Symbol(s)		Name of each exchange on which ~~registered:~~registered
Common stock		INTG		NASDAQ CAPITAL MARKET

The number of shares outstanding of registrant’s Common Stock, as of ~~May 2, 2019~~January 24, 2020 was ~~2,327,362.~~2,299,422.

TABLE OF CONTENTS

	PART I – FINANCIAL INFORMATION	Page

	~~PART I – FINANCIAL INFORMATION~~

Item 1.	Financial Statements.

	Condensed Consolidated Balance Sheets as of ~~March~~December 31, 2019 and June 30, ~~2018~~2019 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the Three Months ~~Ended March~~ended December 31, 2019 and 2018 (Unaudited)	4
	Condensed Consolidated Statements of Operations for the ~~Nine~~Six Months ~~Ended March~~ended December 31, 2019 and 2018 (Unaudited)	5
	Condensed Consolidated Statements of Shareholders’ Deficit for the ~~Quarters Ended March~~Six Months ended December 31, 2019 and 2018 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months ~~Ended March~~ended December 31, 2019 and 2018 (Unaudited)	7
	7Notes to the Condensed Consolidated Financial Statements	8-19

	~~Notes to the Condensed Consolidated Financial Statements~~	~~8-19~~

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	20-26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	27

Item 4.	Controls and Procedures.	27

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	27

Item 1.1A.	~~Legal Proceedings.~~Risk Factors.	2827

~~Item 1A.~~	~~Risk Factors.~~	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	2827

Item 3.	Defaults Upon Senior Securities.	2827

Item 4.	Mine Safety Disclosures.	2827

Item 5.	Other Information.	2827

Item 6.	Exhibits.	28

Signatures			29

-2-

~~- 2 -~~

PART I

FINANCIAL INFORMATION

Item 1 - Condensed Consolidated Financial Statements

THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

As of	March 31, 2019			June 30, 2018			December 31, 2019			June 30, 2019
ASSETS
Investment in hotel, net	$	39,721,000		$	40,961,000
Investment in Hotel, net							$	39,540,000		$	39,836,000
Investment in real estate, net		52,120,000			53,369,000			51,064,000			51,773,000
Investment in marketable securities		10,834,000			13,841,000			8,148,000			9,696,000
Other investments, net		612,000			813,000			564,000			612,000
Cash and cash equivalents		11,484,000			8,053,000			8,456,000			11,837,000
Restricted cash		9,870,000			9,458,000			14,884,000			13,295,000
Other assets, net		2,630,000			5,185,000			2,464,000			2,362,000
Deferred tax asset								1,097,000			1,468,000
Total assets	$	127,271,000		$	131,680,000		$	126,217,000		$	130,879,000

LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Liabilities:
Accounts payable and other liabilities - Justice							$	8,647,000		$	11,298,000
Accounts payable and other liabilities	$	2,689,000		$	3,299,000			4,054,000			3,766,000
Accounts payable and other liabilities - Hotel		7,816,000			9,946,000
Due to securities broker		2,024,000			1,887,000			2,355,000			1,629,000
Obligations for securities sold		704,000			1,935,000			16,000			1,225,000
Related party and other notes payable		5,416,000			5,735,000			4,950,000			5,261,000
Capital leases		1,256,000			1,355,000
Finance leases								1,282,000			1,486,000
Line of credit payable		2,985,000			-			2,985,000			2,985,000
Mortgage notes payable - Hotel, net		113,538,000			114,372,000			111,947,000			113,087,000
Mortgage notes payable - real estate, net		58,938,000			62,873,000			57,812,000			58,571,000
Deferred tax liability		1,016,000			245,000
Total liabilities		196,382,000			201,647,000			194,048,000			199,308,000

Shareholders' deficit:
Shareholders’ deficit:
Preferred stock, $.01 par value, 100,000 shares authorized; none issued		-			-			-			-
Common stock, $.01 par value, 4,000,000 shares authorized; 3,404,982 and 3,395,616 issued; 2,327,362 and 2,334,197 outstanding, respectively		33,000			33,000
Common stock, $.01 par value, 4,000,000 shares authorized; 3,404,982 and 3,404,982 issued; 2,299,422 and 2,309,962 outstanding, respectively								33,000			33,000
Additional paid-in capital		10,559,000			10,522,000			10,166,000			10,342,000
Accumulated deficit		(40,563,000	)		(41,217,000	)		(39,176,000	)		(39,760,000	)
Treasury stock, at cost, 1,077,620 and 1,061,419 shares, respectively		(13,806,000	)		(13,268,000	)
Total InterGroup shareholders' deficit		(43,777,000	)		(43,930,000	)
Treasury stock, at cost, 1,105,560 and 1,095,020 shares, respectively								(14,693,000	)		(14,347,000	)
Total InterGroup shareholders’ deficit								(43,670,000	)		(43,732,000	)
Noncontrolling interest		(25,334,000	)		(26,037,000	)		(24,161,000	)		(24,697,000	)
Total shareholders' deficit		(69,111,000	)		(69,967,000	)
Total shareholders’ deficit								(67,831,000	)		(68,429,000	)

Total liabilities and shareholders' equity	$	127,271,000		$	131,680,000
Total liabilities and shareholders’ deficit							$	126,217,000		$	130,879,000

The accompanying notes are an integral part of these (unaudited) condensed consolidated financial statements.

-3-

~~- 3 -~~

THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the three months ended March 31,	2019			2018
For the three months ended December 31,							2019			2018
Revenues:
Hotel	$	15,469,000		$	14,344,000		$	14,901,000		$	13,997,000
Real estate		3,744,000			3,628,000			3,839,000			3,752,000
Total revenues		19,213,000			17,972,000			18,740,000			17,749,000
Costs and operating expenses:
Hotel operating expenses		(11,378,000	)		(10,573,000	)		(11,730,000	)		(11,236,000	)
Real estate operating expenses		(2,051,000	)		(1,843,000	)		(2,089,000	)		(1,866,000	)
Depreciation and amortization expenses		(1,218,000	)		(1,260,000	)		(1,232,000	)		(1,249,000	)
General and administrative expenses		(667,000	)		(828,000	)		(581,000	)		(479,000	)

Total costs and operating expenses		(15,314,000	)		(14,504,000	)		(15,632,000	)		(14,830,000	)

Income from operations		3,899,000			3,468,000			3,108,000			2,919,000

Other income (expense):
Interest expense - mortgages		(2,410,000	)		(2,360,000	)		(2,330,000	)		(2,405,000	)
Loss on disposal of assets		(398,000	)		-
Net gain on marketable securities		681,000			636,000
Net gain (loss) on marketable securities - Comstock		280,000			(744,000	)
Unrealized loss on other investments		-			(42,000	)
Impairment loss on other investments		(98,000	)		-
Net loss on marketable securities								(53,000	)		(1,945,000	)
Net loss on marketable securities - Comstock								(66,000	)		(26,000	)
Dividend and interest income		194,000			92,000			111,000			88,000
Trading and margin interest expense		(312,000	)		(260,000	)		(241,000	)		(193,000	)
Total other expense, net		(2,063,000	)		(2,678,000	)		(2,579,000	)		(4,481,000	)

Income before income taxes		1,836,000			790,000
Income tax expense		(501,000	)		(11,000	)
Net income		1,335,000			779,000
Less: Net income attributable to the noncontrolling interest		(284,000	)		(251,000	)
Net income attributable to InterGroup Corporation	$	1,051,000		$	528,000
Income (loss) before income taxes								529,000			(1,562,000	)
Income tax (expense) benefit								(149,000	)		440,000
Net income (loss)								380,000			(1,122,000	)
Less: Net (income) loss attributable to the noncontrolling interest								(132,000	)		95,000
Net income (loss) attributable to InterGroup Corporation							$	248,000		$	(1,027,000	)

Net income per share
Net income (loss) per share
Basic	$	0.57		$	0.33		$	0.17		$	(0.48	)
Diluted	$	0.50		$	0.29		$	0.14			N/A

Net income per share attributable to InterGroup Corporation
Net income (loss) per share attributable to InterGroup Corporation
Basic	$	0.45		$	0.22		$	0.11		$	(0.44	)
Diluted	$	0.40		$	0.20		$	0.09			N/A

Weighted average number of basic common shares outstanding		2,329,207			2,353,073			2,302,748			2,327,007
Weighted average number of diluted common shares outstanding		2,659,602			2,671,073			2,633,143			N/A

The accompanying notes are an integral part of these (unaudited) condensed consolidated financial statements.

-4-

~~- 4 -~~

THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

For the nine months ended March 31,	2019			2018
For the six months ended December 31,							2019			2018
Revenues:
Hotel	$	45,276,000		$	41,968,000		$	30,330,000		$	29,807,000
Real estate		11,175,000			10,930,000			7,556,000			7,431,000
Total revenues		56,451,000			52,898,000			37,886,000			37,238,000
Costs and operating expenses:
Hotel operating expenses		(33,424,000	)		(31,905,000	)		(23,078,000	)		(22,046,000	)
Real estate operating expenses		(5,929,000	)		(5,840,000	)		(4,039,000	)		(3,878,000	)
Depreciation and amortization expenses		(3,710,000	)		(3,801,000	)		(2,445,000	)		(2,492,000	)
General and administrative expenses		(1,789,000	)		(2,389,000	)		(1,341,000	)		(1,122,000	)

Total costs and operating expenses		(44,852,000	)		(43,935,000	)		(30,903,000	)		(29,538,000	)

Income from operations		11,599,000			8,963,000			6,983,000			7,700,000

Other income (expense):
Interest expense - mortgages		(7,380,000	)		(7,343,000	)		(4,727,000	)		(4,970,000	)
Loss on disposal of assets		(398,000	)		-
Net (loss) gain on marketable securities		(999,000	)		1,190,000
Net loss on marketable securities								(198,000	)		(1,680,000	)
Net loss on marketable securities - Comstock		(182,000	)		(3,498,000	)		(370,000	)		(462,000	)
Unrealized loss on other investments		-			(42,000	)
Impairment loss on other investments		(98,000	)		(200,000	)
Dividend and interest income		379,000			223,000			241,000			185,000
Trading and margin interest expense		(809,000	)		(886,000	)		(534,000	)		(497,000	)
Total other expense, net		(9,487,000	)		(10,556,000	)		(5,588,000	)		(7,424,000	)

Income (loss) before income taxes		2,112,000			(1,593,000	)
Income before income taxes								1,395,000			276,000
Income tax expense		(771,000	)		(430,000	)		(371,000	)		(270,000	)
Net income (loss)		1,341,000			(2,023,000	)
Less: Net (income) loss attributable to the noncontrolling interest		(687,000	)		934,000
Net income								1,024,000			6,000
Less: Net income attributable to the noncontrolling interest								(440,000	)		(403,000	)
Net income (loss) attributable to InterGroup Corporation	$	654,000		$	(1,089,000	)	$	584,000		$	(397,000	)

Net income (loss) per share
Net income per share
Basic	$	0.58		$	(0.86	)	$	0.44		$	0.003
Diluted	$	0.50			N/A		$	0.39		$	0.002

Net income (loss) per share attributable to InterGroup Corporation
Basic	$	0.28		$	(0.46	)	$	0.25		$	(0.17	)
Diluted	$	0.25			N/A		$	0.22			N/A

Weighted average number of basic common shares outstanding		2,329,883			2,357,289			2,306,070			2,330,213
Weighted average number of diluted common shares outstanding		2,660,278			N/A			2,636,465			2,657,008

The accompanying notes are an integral part of these (unaudited) condensed consolidated financial statements.

-5-

~~- 5 -~~

THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS'~~SHAREHOLDERS’ DEFICIT

(Unaudited)

					Additional									InterGroup						Total							Additional									InterGroup						Total
	Common Stock				Paid-in						Treasury			Shareholders'			Noncontrolling			Shareholders'			Common Stock				Paid-in			Accumulated			Treasury			Shareholder’			Noncontrolling			Shareholder’
	Shares		Amount		Capital			Accumulated Deficit			Stock			Deficit			Interest			Deficit			Shares		Amount		Capital			Deficit			Stock			Deficit			Interest			Deficit

Balance at July 1, 2018		3,395,616	$	33,000	$	10,522,000		$	(41,217,000	)	$	(13,268,000	)	$	(43,930,000	)	$	(26,037,000	)	$	(69,967,000	)
Balance at July 1, 2019																								3,404,982	$	33,000	$	10,342,000		$	(39,760,000	)	$	(14,347,000	)	$	(43,732,000	)	$	(24,697,000	)	$	(68,429,000	)

Net Income		-		-		-			630,000			-			630,000			498,000			1,128,000			-		-		-			336,000			-			336,000			308,000			644,000

Stock options expense		-		-		30,000			-			-			30,000			-			30,000

Purchase of treasury stock		-		-		-			-			(198,000	)		(198,000	)		-			(198,000	)

Balance at September 30, 2018		3,395,616		33,000		10,552,000			(40,587,000	)		(13,466,000	)		(43,468,000	)		(25,539,000	)		(69,007,000	)

Issuance of stock		9,366		-		-			-			-			-			-			-

Net loss		-		-		-			(1,027,000	)		-			(1,027,000	)		(95,000	)		(1,122,000	)

Stock options expense		-		-		29,000			-			-			29,000			-			29,000			-		-		8,000			-			-			8,000			-			8,000

Investment in Santa Fe		-		-		(31,000	)		-			-			(31,000	)		16,000			(15,000	)		-		-		(147,000	)		-			-			(147,000	)		74,000			(73,000	)

Purchase of treasury stock		-		-		-			-			(266,000	)		(266,000	)		-			(266,000	)		-		-		-			-			(156,000	)		(156,000	)		-			(156,000	)

Balance at December 31, 2018		3,404,982	$	33,000	$	10,550,000		$	(41,614,000	)	$	(13,732,000	)	$	(44,763,000	)	$	(25,618,000	)	$	(70,381,000	)
Balance at September 30, 2019																								3,404,982		33,000		10,203,000			(39,424,000	)		(14,503,000	)		(43,691,000	)		(24,315,000	)		(68,006,000	)

Net income		-		-		-			1,051,000			-			1,051,000			284,000			1,335,000			-		-		-			248 ,000			-			248,000			132,000			380,000

Stock options expense		-		-		9,000			-			-			9,000			-			9,000			-		-		9,000			-			-			9,000			-			9,000

Investment in Santa Fe																								-		-		(46,000	)		-			-			(46,000	)		22,000			(24,000	)

Purchase of treasury stock		-		-		-			-			(74,000	)		(74,000	)		-			(74,000	)		-		-		-			-			(190,000	)		(190,000	)		-			(190,000	)

Balance at March 31, 2019		3,404,982	$	33,000	$	10,559,000		$	(40,563,000	)	$	(13,806,000	)	$	(43,777,000	)	$	(25,334,000	)	$	(69,111,000	)
Balance at December 31, 2019																								3,404,982	$	33,000	$	10,166,000		$	(39,176,000	)	$	(14,693,000	)	$	(43,670,000	)	$	(24,161,000	)	$	(67,831,000	)

					Additional								InterGroup						Total							Additional									InterGroup						Total
	Common Stock				Paid-in					Treasury			Shareholders'			Noncontrolling			Shareholders'			Common Stock				Paid-in			Accumulated			Treasury			Shareholder’			Noncontrolling			Shareholder’
	Shares		Amount		Capital		Accumulated Deficit			Stock			Deficit			Interest			Deficit			Shares		Amount		Capital			Deficit			Stock			Deficit			Interest			Deficit

Balance at July 1, 2017		3,395,616	$	33,000	$	10,346,000	$	(45,298,000	)	$	(12,626,000	)	$	(47,545,000	)	$	(27,773,000	)	$	(75,318,000	)

Net (loss) Income		-		-		-		(412,000	)		-			(412,000	)		117,000			(295,000	)

Stock options expense		-		-		62,000		-			-			62,000			-			62,000

Balance at September 30, 2017		3,395,616		33,000		10,408,000		(45,710,000	)		(12,626,000	)		(47,895,000	)		(27,656,000	)		(75,551,000	)

Net loss		-		-		-		(1,205,000	)		-			(1,205,000	)		(1,302,000	)		(2,507,000	)

Stock options expense		-		-		60,000		-			-			60,000			-			60,000

Purchase of treasury stock		-		-		-		-			(109,000	)		(109,000	)		-			(109,000	)

Balance at December 31, 2017		3,395,616	$	33,000	$	10,468,000	$	(46,915,000	)	$	(12,735,000	)	$	(49,149,000	)	$	(28,958,000	)	$	(78,107,000	)
Balance at July 1, 2018																							3,395,616	$	33,000	$	10,522,000		$	(41,217,000	)	$	(13,268,000	)	$	(43,930,000	)	$	(26,037,000	)	$	(69,967,000	)

Net Income		-		-		-		528,000			-			528,000			251,000			779,000			-		-		-			630,000			-			630,000			498,000			1,128,000

Stock options expense						31,000								31,000						31,000			-		-		30,000			-			-			30,000			-			30,000

Purchase of treasury stock		-		-		-		-			(115,000	)		(115,000	)		-			(115,000	)		-		-		-			-			(198,000	)		(198,000	)		-			(198,000	)

Balance at March 31, 2018		3,395,616	$	33,000	$	10,499,000	$	(46,387,000	)	$	(12,850,000	)	$	(48,705,000	)	$	(28,707,000	)	$	(77,412,000	)
Balance at September 30, 2018																							3,395,616		33,000		10,552,000			(40,587,000	)		(13,466,000	)		(43,468,000	)		(25,539,000	)		(69,007,000	)

Net loss																							-		-		-			(1,027,000	)		-			(1,027,000	)		(95,000	)		(1,122,000	)

Issuance of stock																							9,366		-		-			-			-			-			-			-

Stock options expense																							-		-		29,000			-			-			29,000			-			29,000

Investment in Santa Fe																							-		-		(31,000	)		-			-			(31,000	)		16,000			(15,000	)

Purchase of treasury stock																							-		-		-			-			(266,000	)		(266,000	)		-			(266,000	)

Balance at December 31, 2018																							3,404,982	$	33,000	$	10,550,000		$	(41,614,000	)	$	(13,732,000	)	$	(44,763,000	)	$	(25,618,000	)	$	(70,381,000	)

The accompanying notes are an integral part of these (unaudited) condensed consolidated financial statements.

-6-

~~- 6 -~~

THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the nine months ended March 31,	2019			2018
For the six months ended December 31,							2019			2018
Cash flows from operating activities:
Net income (loss)	$	1,341,000		$	(2,023,000	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net income							$	1,024,000		$	6,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,626,000			3,840,000			2,417,000			2,461,000
Loss on disposal of assets		398,000			-
Deferred taxes		771,000			430,000			371,000			270,000
Net unrealized loss on marketable securities		1,534,000			2,723,000			491,000			2,664,000
Unrealized loss on other investments		-			42,000
Impairment loss on other investments		98,000			200,000
Stock compensation expense		68,000			153,000			17,000			59,000
Changes in operating assets and liabilities:
Investment in marketable securities		1,473,000			5,012,000			1,057,000			3,591,000
Other assets		2,555,000			789,000			(102,000	)		449,000
Accounts payable and other liabilities - Justice								(2,651,000	)		(1,181,000	)
Accounts payable and other liabilities		(2,740,000	)		(916,000	)		288,000			(84,000	)
Due to securities broker		137,000			(2,592,000	)		726,000			(1,475,000	)
Obligations for securities sold		(1,231,000	)		(2,826,000	)		(1,209,000	)		(1,935,000	)
Net cash provided by operating activities		8,030,000			4,832,000			2,429,000			4,825,000

Cash flows from investing activities:
Payments for hotel investments		(982,000	)		(192,000	)		(909,000	)		(583,000	)
Payments for real estate investments		(566,000	)		(722,000	)		(531,000	)		(399,000	)
Payments for investment in Santa Fe		(15,000	)		-			(97,000	)		(15,000	)
Proceeds from other investments		103,000			76,000			48,000			80,000
Net cash used in investing activities		(1,460,000	)		(838,000	)		(1,489,000	)		(917,000	)

Cash flows from financing activities:
Net payments of mortgage and other notes payable		(5,174,000	)		(2,336,000	)		(2,386,000	)		(4,411,000	)
Proceeds from line of credit		2,985,000			-			-			2,985,000
Purchase of treasury stock		(538,000	)		(224,000	)		(346,000	)		(464,000	)
Net cash used in financing activities		(2,727,000	)		(2,560,000	)		(2,732,000	)		(1,890,000	)

Net increase in cash, cash equivalents and restricted cash		3,843,000			1,434,000
Net (decrease) increase in cash, cash equivalents and restricted cash								(1,792,000	)		2,018,000
Cash, cash equivalents and restricted cash at the beginning of the period		17,511,000			10,273,000			25,132,000			17,511,000
Cash, cash equivalents and restricted cash at the end of the period	$	21,354,000		$	11,707,000		$	23,340,000		$	19,529,000

Supplemental information:
Interest paid	$	7,542,000		$	7,835,000		$	4,799,000		$	5,081,000
Taxes (refund received) paid	$	(1,349,000	)	$	73,000

Non-cash transaction:
Additions to Hotel equipment through capital lease	$	71,000		$	-
Taxes paid							$	39,000		$	265,000

The accompanying notes are an integral part of these (unaudited) condensed consolidated financial statements.

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~~- 7 -~~

THE INTERGROUP CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have been prepared by The InterGroup Corporation (“InterGroup” or the “Company”), without audit, according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures that are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all adjustments (which included only normal recurring adjustments) necessary for a fair statement of the financial position, cash flows and results of operations as of and for the periods indicated. It is suggested that these financial statements be read in conjunction with the audited financial statements of InterGroup and the notes therein included in the ~~Company's~~Company’s Annual Report on Form 10-K for the year ended June 30, ~~2018.~~2019. The ~~March~~December 31, 2019 Condensed Consolidated Balance Sheet was derived from the Consolidated Balance Sheet as included in the Company’s Form 10-K for the year ended June 30, ~~2018.~~2019.

The results of operations for the ~~nine~~six months ended ~~March~~December 31, 2019 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, ~~2019.~~2020.

Basic and diluted income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. The computation of diluted income per share is similar to the computation of basic earnings per share except that the weighted-average number of common shares is increased to include the number of additional common shares that would have been outstanding if potential dilutive common shares had been issued. The ~~Company's~~Company’s only potentially dilutive common shares are stock options.

As of ~~March~~December 31, 2019, the Company had the power to vote ~~85.9%~~86.3% of the voting shares of Santa Fe Financial Corporation (“Santa Fe”), a public company (OTCBB: SFEF). This percentage includes the power to vote an approximately 4% interest in the common stock in Santa Fe owned by the Company’s Chairman and President pursuant to a voting trust agreement entered into on June 30, 1998.

Santa Fe’s primary business is conducted through the management of its 68.8% owned subsidiary, Portsmouth Square, Inc. (“Portsmouth”), a public company (OTCBB: PRSI). Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors Limited Partnership; a California limited partnership (“Justice” or the “Partnership”). InterGroup also directly owns approximately 13.4% of the common stock of Portsmouth.

Justice, through its subsidiaries Justice Operating Company, LLC (“Operating”), and Justice Mezzanine Company, LLC (“Mezzanine”) owns and ~~Kearny Street Parking, LLC (“Parking”) owns~~operates a 544-room hotel property located at 750 Kearny Street, San Francisco California, known as the Hilton San Francisco Financial District (the “Hotel”) and related facilities including a five-level underground parking garage. Mezzanine ~~and Parking are both~~is a wholly-owned ~~subsidiaries~~subsidiary of the Partnership; Operating is a wholly-owned subsidiary of Mezzanine. Mezzanine is the borrower under certain mezzanine indebtedness of Justice, and in December 2013, the Partnership conveyed ownership of the Hotel to Operating. The Hotel is operated by the partnership as a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (Hilton) through January 31, 2030.

Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel, along with its five-level parking garage, with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of ten years commencing on the takeover date and automatically renews for successive one (1) year periods, to not exceed five years in the aggregate, subject to certain conditions. Under the terms on the HMA, base management fee payable to Interstate shall be one and seven-tenths percent (1.70%) of total Hotel revenue.

~~The Company began managing~~ On October 25, 2019, Interstate merged with Aimbridge Hospitality, North America’s largest independent hotel management firm. With the ~~parking garage that is part~~completion of the ~~Hotel in-house~~merger, the newly combined company will be positioned under the Aimbridge Hospitality name in ~~2016. Effective February 3, 2017, Interstate took over~~ the ~~management of the parking garage along with the Hotel.~~Americas.

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~~- 8 -~~

In addition to the operations of the Hotel, the Company also generates income from the ownership, management and, when appropriate, sale of real estate. Properties include sixteen apartment complexes, one commercial real estate property and three single-family houses. The properties are located throughout the United States, but are concentrated in Dallas, Texas and Southern California. The Company also has an investment in unimproved real property. As of ~~March~~December 31, 2019, all of the Company’s residential and commercial rental properties are managed in-house.

Due to Securities Broker

Various securities brokers have advanced funds to the Company for the purchase of marketable securities under standard margin agreements. These advanced funds are recorded as a liability.

Obligations for Securities Sold

Obligation for securities sold represents the fair market value of shares sold with the promise to deliver that security at some future date and the fair market value of shares underlying the written call options with the obligation to deliver that security when and if the option is exercised. The obligation may be satisfied with current holdings of the same security or by subsequent purchases of that security. Unrealized gains and losses from changes in the obligation are included in the condensed consolidated statements of operations.

Income Tax

The Company consolidates Justice (“Hotel”) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel. The income tax expense during the ~~nine~~six months ended ~~March~~December 31, 2019 and 2018 ~~represents primarily~~represent the income tax effect ofon the ~~pretax loss at InterGroup and the~~Company’s pretax income ~~of Portsmouth~~ which includes its share in the net income of the Hotel. During the fiscal year ended June 30, 2018, the Company had realized loss of $6,007,000 related to the sale of common stock of Comstock. The Company filed a claim to carry back this loss to fiscal year ended June 30, 2015 and received a federal tax refund of $1,860,000 in March 2019. For the nine months ended March 31, 2018, a provisional net charge of $879,000 was included in the income tax expense as a result of reducing our deferred tax asset to the lower federal base rate of 21%.

Financial Condition and Liquidity

The Company’s cash flows are primarily generated from the ownership and management of real estate.

To fund the redemption of limited partnership interests and to repay the prior mortgage of $42,940,000, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine ~~loan.~~loan in December 2013. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan bears an interest rate of 5.275% per annum with interest only payments due through January 2017. Beginning in February 2017, the loan began to amortize over a thirty-year period through its maturity date of January 2024. Outstanding principal balance on the loan was ~~$94,090,000~~$92,914,000 and ~~$95,018,000~~$93,746,000 as of ~~March~~December 31, 2019 and June 30, ~~2018,~~2019, respectively. As additional security for the mortgage loan, there is a limited guaranty executed by Portsmouth in favor of the mortgage lender. The mezzanine loan is secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The mezzanine interest only loan ~~bears~~had an interest atrate of 9.75% per annum and ~~matures in~~a maturity date of January 1, 2024. As additional security for the mezzanine loan, there is a limited guaranty executed by Portsmouth in favor of the mezzanine lender. On July 31, 2019, Mezzanine refinanced the mezzanine loan by entering into a new mezzanine loan agreement (“New Mezzanine Loan Agreement”) with Cred Reit Holdco LLC in the amount of $20,000,000. The prior Mezzanine Loan which had a 9.75% per annum interest rate was paid off. Interest rate on the new mezzanine loan is 7.25% and the loan matures on January 1, 2024. Interest only payments are due monthly.

Effective as of May 11, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. Pursuant to the agreement, InterGroup is required to maintain a certain net worth and liquidity. As of ~~March~~December 31, 2019, InterGroup is in compliance with both requirements.

In July 2018, InterGroup obtained a revolving $5,000,000 line of credit (“RLOC”) from CIBC Bank USA (“CIBC”). On July 31, 2018, $2,969,000 was drawn from the RLOC to pay off the mortgage note payable at Intergroup Woodland Village, Inc. (“Woodland Village”) and a new mortgage note payable was established at Woodland Village due to InterGroup for the amount drawn. Woodland Village holds a three-story apartment complex in ~~Los Angeles,~~Santa Monica, California and is 55.4% and 44.6% owned by Santa Fe and the Company, respectively. The RLOC carries a variable interest rate of 30-day LIBOR plus 3%. Interest is paid on a monthly basis. The RLOC and all accrued and unpaid interest ~~are~~were due in July 2019. In July 2019, the Company obtained a modification from CIBC which increased the RLOC by $3,000,000 and extended the maturity date from July 24, 2019 to July 23, 2020. The $2,969,000 mortgage due to InterGroup carries same terms as InterGroup’s RLOC.

-9-

~~- 9 -~~

On August 31, 2018, $1,005,000 was drawn from the RLOC to pay off a mortgage note payable on a single-family house located in Los Angeles, California. On September 28, 2018, the Company obtained a new mortgage in the amount of $1,000,000 on the same property. The interest rate on the new loan is fixed at 4.75% per annum for the first five years and variable for the remaining of the term. The note matures in October 2048. Net proceeds of $995,000 received as a result of the refinance was used to pay down the RLOC.

The Hotel has continued to generate positive operating income. While the debt service requirements related to the loans may create some additional risk for the Company and its ability to generate cash flows in the future, management believes that cash flows from the operations of the Hotel and the garage will continue to be sufficient to meet all of the Partnership’s current and future obligations and financial requirements.

The Company has invested in short-term, income-producing instruments and in equity and debt securities when deemed appropriate. The ~~Company's~~Company’s marketable securities are classified as trading with unrealized gains and losses recorded through the consolidated statements of operations.

Management believes that its cash, marketable securities, and the cash flows generated from its real estate assets, will be adequate to meet the Company’s current and future obligations. Additionally, management believes there is significant appreciated value in the Hotel property to support additional borrowings, if necessary.

The following table provides a summary as of ~~March~~December 31, 2019, the Company’s material financial obligations which also including interest payments.

			3 Months		Year		Year		Year			Year						6 Months		Year		Year		Year		Year
	Total		2019		2020		2021		2022			2023		Thereafter		Total		2020		2021		2022		2023		2024		Thereafter
Mortgage and subordinated notes payable	$	173,320,000	$	856,000	$	3,061,000	$	12,490,000	$	3,102,000		$	37,820,000	$	115,991,000	$	170,968,000	$	1,433,000	$	12,483,000	$	3,095,000	$	37,812,000	$	107,655,000	$	8,490,000
Other notes payable		9,657,000		396,000		3,934,000		930,000		946,000			655,000		2,796,000		9,217,000		585,000		3,991,000		1,022,000		744,000		567,000		2,308,000
Interest		43,675,000		3,125,000		9,528,000		9,136,000		8,646,000	��		7,636,000		5,604,000		33,535,000		4,460,000		8,598,000		8,148,000		7,014,000		3,401,000		1,914,000
Total	$	226,652,000	$	4,377,000	$	16,523,000	$	22,556,000	$	12,694,000		$	46,111,000	$	124,391,000	$	213,720,000	$	6,478,000	$	25,072,000	$	12,265,000	$	45,570,000	$	111,623,000	$	12,712,000

Recently Issued and Adopted Accounting Pronouncements

In ~~November~~February 2016, the Financial Accounting Standards Board ~~(“FASB”)~~(FASB) issued ~~Accounting Standard Update (“ASU”) 2016-18, Restricted Cash.~~ ASU ~~2016-18~~2016-02,Leases (Topic 842). ASU 2016-02 requires ~~companies~~lessees to ~~include restricted cash~~recognize lease assets and ~~restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown~~lease liabilities on ~~the statement of cash flows. Additionally, ASU 2016-18 requires a disclosure of a reconciliation between the statement of financial position and the statement of cash flows when~~ the balance sheet ~~includes more than one line item for cash, cash equivalents, restricted cash,~~ and ~~restricted cash equivalents.~~requires expanded disclosures about leasing arrangements. ASU ~~2016-18~~2016-02 is effective for ~~reporting periods~~fiscal years beginning after December 15, ~~2017,~~2018, and interim periods in fiscal years beginning after December 15, 2018, with early adoption ~~permitted, and will be applied retrospectively to all periods presented. The Company adopted ASU 2018-16 effective~~permitted. In July ~~1, 2018. The adoption of ASU 2016-18 impacted the presentation of cash flows with inclusion of restricted cash flows for each of the presented periods.~~

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015,2018, the FASB issued ASU ~~No. 2015-14, Revenue from Contracts with Customers~~2018-11,Leases (Topic ~~606)~~842): ~~Deferral of the Effective Date, which delays the effective date of~~Targeted Improvements. ASU ~~2014-09 by one year. The FASB also agreed to allow~~2018-11 provides entities another option for transition, allowing entities to ~~choose to adopt~~not apply the standard as of the original effective date. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The new standard ~~permits two methods~~in the comparative periods they present in their financial statements in the year of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We appliedadoption. Effective July 1, 2019, we adopted ASU 2016-02 using the modified retrospective approach provided by ASU 2018-11. We elected certain practical expedients permitted under the transition ~~method~~guidance, including the election to ~~all contracts~~carryforward historical lease classification. We also elected the short-term lease practical expedient, which allowed us to not recognize leases with a term of less than twelve months on our consolidated balance sheets. In addition, we elected the lease and non-lease components practical expedient, which allowed us to calculate the present value of the fixed payments without performing an allocation of lease and non-lease components. We did not record any operating lease right-of-use (“ROU”) assets and operating lease liabilities upon ~~the~~ adoption of ~~ASU 2014-09 effective July 1, 2018. We provided~~ the ~~additional required disclosures, but~~new standard as the ~~cumulative adjustment from~~aggregate value of the ROU assets and operating lease liabilities are immaterial relative to our ~~comparative periods was zero in~~total assets and liabilities as of June 30, 2019. The standard did not have an impact on our ~~condensed consolidated financial statements.~~other finance leases, statements of operations or cash flows. See Note 2.

-3 and Note 10 -

~~In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), which supersedes existing guidance on accounting~~ for ~~leases in Leases (Topic 840) and generally requires all leases, including operating leases, to be recognized in the statement~~balances of ~~financial position as right-of-use~~finance lease ROU assets and ~~lease~~ liabilities, by lessees. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach and are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. We intend to adopt the standard on July 1, 2019. The Company is currently reviewing the effect of ASU No. 2016-02.respectively.

On June 16, 2016, the FASB issued ASU 2016-13, ~~“Financial~~“Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial ~~Instruments.~~Instruments.” This ASU modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the timelier recognition of losses. ASU No. 2016-13 will be effective for us as of January 1, ~~2020.~~2023. The Company is currently reviewing the effect of ASU No. 2016-13.

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NOTE 2 – REVENUE

~~On July 1, 2018, we adopted ASC 606,~~ ~~Revenue~~Our revenue from ~~Contracts with Customers,~~ real estate is primarily rental income from residential and commercial property leases which is recorded when due from residents and is recognized monthly as described in Note 1, using the modified retrospective approach to all contracts resulting in no cumulative adjustment to accumulated deficit. The adoption of this standard did not impact the timing of our revenue recognition based on the short-term, day-to-day nature of our operations.

earned. The following table present our ~~hotel revenues~~Hotel revenue disaggregated by revenue streams. ~~Revenues from real estate are not affected by the new guidance.~~

For the three months ended March 31,	2019		2018
For the three months ended December 31,					2019		2018
Hotel revenues:
Hotel rooms	$	13,521,000	$	11,714,000	$	12,497,000	$	11,565,000
Food and beverage		1,218,000		1,748,000		1,425,000		1,565,000
Garage		652,000		756,000		776,000		734,000
Other operating departments		78,000		126,000		203,000		133,000
Total hotel revenue	$	15,469,000	$	14,344,000	$	14,901,000	$	13,997,000

For the nine months ended March 31,	2019		2018
For the six months ended December 31,					2019		2018
Hotel revenues:
Hotel rooms	$	38,608,000	$	34,266,000	$	25,811,000	$	25,087,000
Food and beverage		4,232,000		5,121,000		2,647,000		3,014,000
Garage		2,160,000		2,272,000		1,512,000		1,508,000
Other operating departments		276,000		309,000		360,000		198,000
Total hotel revenue	$	45,276,000	$	41,968,000	$	30,330,000	$	29,807,000

Performance obligations

We identified the following performance obligations, for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services:

•●

Cancelable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs.

	•
	●	Noncancelable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time and satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation.

~~- 11 -~~

•●

Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest.

	•
	●	Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above.

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 to hotel guests 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.

-11-

Contract assets and liabilities

We do not have any material contract assets as of ~~March~~December 31, 2019 and June 30, ~~2018~~2019 other than trade and other receivables, net on our ~~Condensed Consolidated Balance Sheet.~~condensed consolidated balance sheets. Our receivables are primarily the result of contracts with customers, which are reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected.

We record contract liabilities when cash payments are received or due in advance of guests staying at our hotel, which are presented within accounts payable and other liabilities on our ~~Condensed Consolidated Balance Sheets.~~condensed consolidated balance sheets. Contract liabilities ~~increased~~decreased to ~~$673,000~~$1,027,000 as of ~~March~~December 31, 2019, from ~~$571,000~~$1,215,000 as of June 30, ~~2018.~~2019. The ~~increase~~decrease for the ~~nine~~six months ended ~~March~~December 31, 2019 was primarily driven by ~~deposits received from upcoming groups, offset by $560,000~~$188,000 revenue recognized that was included in the advanced deposits balance as of June 30, ~~2018.~~2019.

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 and lease agreements do not extend beyond one year.

NOTE 3 – INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

~~- 12 -~~

Accumulated Net Book
December 31, 2019 Cost Depreciation Value

Land $ 2,738,000 $ - $ 2,738,000
Finance lease ROU assets 1,746,000 (137,000 ) 1,609,000
Furniture and equipment 30,268,000 (27,206,000 ) 3,062,000
Building and improvements 63,879,000 (31,748,000 ) 32,131,000
Investment in Hotel, net $ 98,631,000 $ (59,091,000 ) $ 39,540,000

Accumulated Net Book
March 31, 2019 Cost Depreciation Value

Land $ 2,738,000 $ - $ 2,738,000
Furniture and equipment 30,379,000 (26,632,000 ) 3,747,000
Building and improvements 63,879,000 (30,643,000 ) 33,236,000
$ 96,996,000 $ (57,275,000 ) $ 39,721,000
Accumulated Net Book Accumulated Net Book
June 30, 2018 Cost Depreciation Value
June 30, 2019 Cost Depreciation Value

Land $ 2,738,000 $ - $ 2,738,000 $ 2,738,000 $ - $ 2,738,000
Finance lease ROU assets 521,000 (35,000 ) 486,000
Furniture and equipment 29,350,000 (25,876,000 ) 3,474,000 30,585,000 (26,842,000 ) 3,743,000
Building and improvements 64,336,000 (29,587,000 ) 34,749,000 63,879,000 (31,010,000 ) 32,869,000
$ 96,424,000 $ (55,463,000 ) $ 40,961,000
Investment in Hotel, net $ 97,723,000 $ (57,887,000 ) $ 39,836,000

NOTE 4 – INVESTMENT IN REAL ESTATE, NET

The Company’s investment in real estate includes sixteen apartment complexes, one commercial real estate property and three single-family houses. The properties are located throughout the United States, but are concentrated in Dallas, Texas and Southern California. The Company also has an investment in unimproved real property. Investment in real estate consisted of the following:

As of March 31, 2019 June 30, 2018 December 31, 2019 June 30, 2019
Land $ 25,033,000 $ 25,033,000 $ 23,566,000 $ 23,566,000
Buildings, improvements and equipment 68,102,000 67,536,000 68,899,000 68,369,000
Accumulated depreciation (41,015,000 ) (39,200,000 ) (42,869,000 ) (41,629,000 )
49,596,000 50,306,000
Land held for development 1,468,000 1,467,000
Investment in real estate, net $ 52,120,000 $ 53,369,000 $ 51,064,000 $ 51,773,000
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NOTE 5 – INVESTMENT IN MARKETABLE SECURITIES

The Company’s investment in marketable securities consists primarily of corporate equities. The Company has also periodically invested in corporate bonds and income producing securities, which may include interests in real estate-based companies and REITs, where financial benefit could transfer to its shareholders through income and/or capital gain.

At ~~March~~December 31, 2019 and June 30, ~~2018,~~2019, all of the Company’s marketable securities are classified as trading securities. The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:

Gross Gross Net Fair
Investment Cost Unrealized Gain Unrealized Loss Unrealized Loss Value

As of March 31, 2019
Corporate
Equities $ 20,957,000 $ 1,372,000 $ (11,495,000 ) $ (10,123,000 ) $ 10,834,000

As of June 30, 2018
Corporate
Equities $ 22,388,000 $ 2,450,000 $ (10,997,000 ) $ (8,547,000 ) $ 13,841,000
~~- 13 -~~
Gross Gross Net Fair
Investment Cost Unrealized Gain Unrealized Loss Unrealized Loss Value

As of December 31, 2019
Corporate
Equities $ 10,576,000 $ 1,672,000 $ (4,100,000 ) $ (2,428,000 ) $ 8,148,000

As of June 30, 2019
Corporate
Equities $ 19,204,000 $ 1,753,000 $ (11,261,000 ) $ (9,508,000 ) $ 9,696,000

As of ~~March~~December 31, 2019, and June 30, ~~2018,~~2019, approximately 4% and 7%, respectively, of the investment in marketable securities balance above is comprised of the common stock of Comstock Mining Inc (“Comstock”). As of December 31, 2019, and June 30, 2019, the Company had $3,845,000 and $11,088,000, respectively, of unrealized losses ~~of $11,094,000 and $10,819,000, respectively,~~ related to securities held for over one ~~year. As~~year; of ~~March 31, 2019,~~which $3,684,000 and ~~June 30, 2018, unrealized losses~~$10,900,000 are related to ~~the Company’s~~its investment in Comstock, ~~Mining Inc. (“Comstock” - NYSE AMERICAN: LODE) were $10,828,000 and $10,646,000,~~ respectively. For the six months ended December 31, 2019, the decrease in unrealized losses is a result of reclassing $7,586,000 of unrealized gain related to Comstock that was included in the cost basis as of June 30, 2019.

Net gains (losses) on marketable securities on the statement of operations is comprised of realized and unrealized gains (losses). Below is the composition of net loss on marketable securities for the ~~respective periods:~~three and six months ended December 31, 2019 and 2018, respectively:

For the three months ended March 31, 2019 2018
Realized (loss) gain on marketable securities $ (169,000 ) $ 534,000
Unrealized gain on marketable securities 850,000 102,000
Unrealized gain (loss) on marketable securities related to Comstock 280,000 (744,000 )
Net gain (loss) on marketable securities $ 961,000 $ (108,000 )
For the three months ended December 31, 2019 2018
Realized (loss) gain on marketable securities, net $ (3,000 ) $ 530,000
Unrealized loss on marketable securities, net (50,000 ) (2,475,000 )
Unrealized loss on marketable securities related to Comstock (66,000 ) (26,000 )
Net loss on marketable securities $ (119,000 ) $ (1,971,000 )

For the nine months ended March 31, 2019 2018
Realized gain on marketable securities $ 353,000 $ 415,000
Unrealized (loss) gain on marketable securities (1,352,000 ) 775,000
Unrealized loss on marketable securities related to Comstock (182,000 ) (3,498,000 )
Net loss on marketable securities $ (1,181,000 ) $ (2,308,000 )
For the six months ended December 31, 2019 2018
Realized (loss) gain on marketable securities, net $ (77,000 ) $ 522,000
Unrealized loss on marketable securities, net (121,000 ) (2,202,000 )
Unrealized loss on marketable securities related to Comstock (370,000 ) (462,000 )
Net loss on marketable securities $ (568,000 ) $ (2,142,000 )
-13-

NOTE 6 – OTHER INVESTMENTS, NET

The Company may also invest, with the approval of the securities investment committee and other Company guidelines, in private investment equity funds and other unlisted securities, such as convertible notes through private placements. Those investments in non-marketable securities are carried at cost on the Company’s balance sheet as part of other investments, net of other than temporary impairment losses. Other investments also include non-marketable warrants carried at fair value.

Other investments, net consist of the following:

Type March 31, 2019 June 30, 2018 December 31, 2019 June 30, 2019
Private equity hedge fund, at cost $ 376,000 $ 554,000 $ 376,000 $ 376,000
Other preferred stock, at cost 236,000 259,000 188,000 236,000
$ 612,000 $ 813,000 $ 564,000 $ 612,000

NOTE 7 - FAIR VALUE MEASUREMENTS

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

~~- 14 -~~
The assets measured at fair value on a recurring basis are as follows:

12/31/2019 06/30/2019
As of 3/31/2019 6/30/2018 Total - Level 1 Total - Level 1
Assets: Total - Level 1 Total - Level 1
Investment in marketable securities:
Consumer $ 2,196,000 $ -
REITs and real estate companies 2,032,000 4,300,000 $ 3,263,000 $ 3,069,000
Corporate Bonds 1,791,000 2,282,000
Energy 1,278,000 950,000
Insurance 1,109,000 -
Corporate bonds 883,000 1,420,000
Consumer cyclical 572,000 1,448,000
Basic material 1,626,000 1,038,000 546,000 829,000
Financial services 278,000 951,000
Technology 149,000 651,000
Industrials 70,000 193,000
Healthcare 772,000 1,777,000 - 185,000
Energy 747,000 311,000
Financial Services 389,000 229,000
Industrials 360,000 404,000
Other 921,000 3,500,000
$ 10,834,000 $ 13,841,000 $ 8,148,000 $ 9,696,000

The fair values of investments in marketable securities are determined by the most recently traded price of each security at the balance sheet date.
-14-

Financial assets that are measured at fair value on a non-recurring basis and are not included in the tables above include “Other investments in non-marketable securities,” that were initially measured at cost and have been written down to fair value as a result of impairment. The following table shows the fair value hierarchy for these assets measured at fair value on a non-recurring basis as follows:

Assets Level 3 December 31, 2019 Net loss for the
six months ended December 31, 2019
Net loss for the nine months
Assets Level 3 March 31, 2019 ended March 31, 2019
Other non-marketable investments $ 612,000 $ 612,000 $ (98,000 ) $ 564,000 $ 564,000 $         -

Assets Level 3 June 30, 2019 Net loss for the
six months ended
December 31, 2018
Net loss for the nine months
Assets Level 3 June 30, 2018 ended March 31, 2018
Other non-marketable investments $ 813,000 $ 813,000 $ (200,000 ) $ 612,000 $ 612,000 $         -
For the six months ended December 31, 2019 and 2018, we received distribution from other non-marketable investments of $48,000 and $80,000, respectively.

Other investments in non-marketable securities are carried at cost net of any impairment loss. The Company has no significant influence or control over the entities that issue these investments and holds less than 20% ownership in each of the investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value.

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 statement of cash flows.

As of 3/31/2019 6/30/2018

Cash and cash equivalents $ 11,484,000 $ 8,053,000
Restricted cash 9,870,000 9,458,000
Total cash, cash equivalents, and restricted cashshown in the condensed consolidated statement of cash flows $ 21,354,000 $ 17,511,000
~~- 15 -~~
As of 12/31/2019 06/30/2019

Cash and cash equivalents $ 8,456,000 $ 11,837,000
Restricted cash 14,884,000 13,295,000
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows $ 23,340,000 $ 25,132,000

Restricted cash is comprised of amounts held by lenders for payment of real estate taxes, insurance, replacement and capital addition reserves. It also includes key money received from Interstate that is restricted for capital improvements for the Hotel.

NOTE 9 – STOCK BASED COMPENSATION PLANS

The Company follows Accounting Standard Codification (ASC) Topic 718 “Compensation – Stock Compensation”, which addresses accounting for equity-based compensation arrangements, including employee stock options and restricted stock units.

Please refer to Note 16 – Stock Based Compensation Plans in the ~~Company's~~Company’s Form 10-K for the year ended June 30, ~~2018~~2019 for more detailed information on the Company’s stock-based compensation plans.

During the three months ended ~~March~~December 31, 2019 and 2018, the Company recorded stock option compensation cost of $9,000 and ~~$30,000,~~$29,000, respectively, related to stock options that were previously issued. During the ~~nine~~six months ended ~~March~~December 31, 2019 and 2018, the Company recorded stock option compensation cost of ~~$68,000~~$17,000 and ~~$153,000,~~$59,000, respectively, related to stock options that were previously issued. As of ~~March~~December 31, 2019, there was a total of ~~$53,000~~$28,000 of unamortized compensation related to stock options which is expected to be recognized over the weighted-average period of ~~2.92~~2.17 years.

In December 2018, the Company’s President and Chief Executive Officer, John V. Winfield exercised 26,805 vested Incentive Stock Options by surrendering 17,439 shares of the Company’s common stock at fair value as payment of the exercise price, resulting in a net issuance to him of 9,366 shares. No additional compensation expense was recorded related to the issuance.
-15-

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of the Company’s stock price history. The Company has selected to use the simplified method for estimating the expected term. The risk-free interest rate is based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options. No dividend yield is included as the Company has not issued any dividends and does not anticipate issuing any dividends in the future.

The following table summarizes the stock options activity from July 1, ~~2017~~2018 through ~~March~~December 31, 2019:

Number of Weighted Average Weighted Average Aggregate
Shares Exercise Price Remaining Life Intrinsic Value

Oustanding at July 1, 2017 368,000 $ 17.21 5.17 years $ 3,046,000
Granted - -
Exercised - -
Forfeited - -
Exchanged - -
Outstanding at June 30, 2018 368,000 $ 17.21 4.17 years $ 3,505,000
Exercisable at June 30, 2018 318,000 $ 16.47 3.79 years $ 3,257,000
Vested and Expected to vest at June 30, 2018 368,000 $ 17.21 4.17 years $ 3,505,000

Oustanding at July 1, 2018 368,000 $ 17.21 4.17 years $ 3,505,000
Granted - -
Exercised (26,805 ) 20.52
Forfeited - -
Exchanged
Outstanding at March 31, 2019 341,195 $ 16.95 3.32 years $ 4,690,000
Exercisable at March 31, 2019 330,395 $ 16.62 3.17 years $ 4,653,000
Vested and Expected to vest at March 31, 2019 341,195 $ 16.95 3.32 years $ 4,690,000
~~- 16 -~~
Number of Weighted Average Weighted Average Aggregate
Shares Exercise Price Remaining Life Intrinsic Value

Oustanding at July 1, 2018 368,000 $ 17.21 4.17 $ 3,505,000
Granted - -
Exercised (26,805 ) 20.52
Forfeited - -
Exchanged - -
Outstanding at June 30, 2019 341,195 $ 16.95 3.07 years $ 4,680,000
Exercisable at June 30, 2019 330,395 $ 16.62 2.92 years $ 4,643,000
Vested and Expected to vest at June 30, 2019 341,195 $ 16.95 3.07 years $ 4,680,000

Oustanding at July 1, 2019 341,195 $ 16.95 3.07 years $ 4,680,000
Granted - -
Exercised - -
Forfeited - -
Exchanged - -
Outstanding at December 31, 2019 341,195 $ 16.95 2.57 years $ 6,993,000
Exercisable at December 31, 2019 330,395 $ 16.62 2.42 years $ 6,883,000
Vested and Expected to vest at December 31, 2019 341,195 $ 16.95 2.57 years $ 6,993,000

NOTE 10 – SEGMENT INFORMATION

The Company operates in three reportable segments, the operation of the hotel (“Hotel Operations”), the operation of its multi-family residential properties (“Real Estate Operations”) and the investment of its cash in marketable securities and other investments (“Investment Transactions”). These three operating segments, as presented in the financial statements, reflect how management internally reviews each segment’s performance. Management also makes operational and strategic decisions based on this information.

Information below represents reported segments for the three and ~~nine~~six months ended ~~March~~December 31, 2019 and 2018. Operating income from hotel operations consist of the operation of the hotel and operation of the garage. Operating income for rental properties ~~consist~~consists of rental income. Operating loss for investment transactions consist of net investment gains (losses), impairment loss on other investments, net unrealized gain (loss) on other investments, dividend and interest income and trading and margin interest expense. The other segment consists of corporate general and administrative expenses and the income tax expense for the entire Company.

As of and for the three months Hotel Real Estate Investment
ended March 31, 2019 Operations Operations Transactions Corporate Total
Revenues $ 15,469,000 $ 3,744,000 $ - $ - $ 19,213,000
Segment operating expenses (11,378,000 ) (2,051,000 ) - (667,000 ) (14,096,000 )
Segment income (loss) from operations 4,091,000 1,693,000 - (667,000 ) 5,117,000
Interest expense - mortgage (1,812,000 ) (598,000 ) - - (2,410,000 )
Loss on disposal of assets (398,000 ) - - - (398,000 )
Depreciation and amortization expense (611,000 ) (607,000 ) - - (1,218,000 )
Gain from investments - - 745,000 - 745,000
Income tax expense - - - (501,000 ) (501,000 )
Net income (loss) $ 1,270,000 $ 488,000 $ 745,000 $ (1,168,000 ) $ 1,335,000
Total assets $ 58,146,000 $ 52,120,000 $ 11,446,000 $ 5,559,000 $ 127,271,000
-16-

For the three months Hotel Real Estate Investment
ended March 31, 2018 Operations Operations Transactions Corporate Total
As of and for the three months Hotel Real Estate Investment
ended December 31, 2019 Operations Operations Transactions Corporate Total
Revenues $ 14,344,000 $ 3,628,000 $ - $ - $ 17,972,000 $ 14,901,000 $ 3,839,000 $ - $ - $ 18,740,000
Segment operating expenses (10,573,000 ) (1,843,000 ) - (828,000 ) (13,244,000 ) (11,730,000 ) (2,089,000 ) - (581,000 ) (14,400,000 )
Segment income (loss) from operations 3,771,000 1,785,000 - (828,000 ) 4,728,000 3,171,000 1,750,000 - (581,000 ) 4,340,000
Interest expense - mortgage (1,733,000 ) (627,000 ) - - (2,360,000 ) (1,735,000 ) (595,000 ) - - (2,330,000 )
Depreciation and amortization expense (669,000 ) (591,000 ) - - (1,260,000 ) (611,000 ) (621,000 ) - - (1,232,000 )
Loss from investments - - (318,000 ) - (318,000 ) - - (249,000 ) - (249,000 )
Income tax expense - - - (11,000 ) (11,000 ) - - - (149,000 ) (149,000 )
Net income (loss) $ 1,369,000 $ 567,000 $ (318,000 ) $ (839,000 ) $ 779,000 $ 825,000 $ 534,000 $ (249,000 ) $ (730,000 ) $ 380,000
Total assets $ 59,981,000 $ 51,064,000 $ 8,712,000 $ 6,460,000 $ 126,217,000
For the three months Hotel Real Estate Investment
ended December 31, 2018 Operations Operations Transactions Corporate Total
Revenues $ 13,997,000 $ 3,752,000 $ - $ - $ 17,749,000
Segment operating expenses (11,236,000 ) (1,866,000 ) - (479,000 ) (13,581,000 )
Segment income (loss) from operations 2,761,000 1,886,000 - (479,000 ) 4,168,000
Interest expense - mortgage (1,797,000 ) (608,000 ) - - (2,405,000 )
Depreciation and amortization expense (643,000 ) (606,000 ) - - (1,249,000 )
Loss from investments - - (2,076,000 ) - (2,076,000 )
Income tax benefit - - - 440,000 440,000
Net income (loss) $ 321,000 $ 672,000 $ (2,076,000 ) $ (39,000 ) $ (1,122,000 )
As of and for the six months Hotel Real Estate Investment
ended December 31, 2019 Operations Operations Transactions Corporate Total
Revenues $ 30,330,000 $ 7,556,000 $ - $ - $ 37,886,000
Segment operating expenses (23,078,000 ) (4,039,000 ) - (1,341,000 ) (28,458,000 )
Segment income (loss) from operations 7,252,000 3,517,000 - (1,341,000 ) 9,428,000
Interest expense - mortgage (3,527,000 ) (1,200,000 ) - - (4,727,000 )
Depreciation and amortization expense (1,204,000 ) (1,241,000 ) - - (2,445,000 )
Loss from investments - - (861,000 ) - (861,000 )
Income tax expense - - - (371,000 ) (371,000 )
Net income (loss) $ 2,521,000 $ 1,076,000 $ (861,000 ) $ (1,712,000 ) $ 1,024,000
Total assets $ 59,981,000 $ 51,064,000 $ 8,712,000 $ 6,460,000 $ 126,217,000
For the six months Hotel Real Estate Investment
ended December 31, 2018 Operations Operations Transactions Corporate Total
Revenues $ 29,807,000 $ 7,431,000 $ - $ - $ 37,238,000
Segment operating expenses (22,046,000 ) (3,878,000 ) - (1,122,000 ) (27,046,000 )
Segment income (loss) from operations 7,761,000 3,553,000 - (1,122,000 ) 10,192,000
Interest expense - mortgage (3,611,000 ) (1,359,000 ) - - (4,970,000 )
Depreciation and amortization expense (1,285,000 ) (1,207,000 ) - - (2,492,000 )
Loss from investments - - (2,454,000 ) - (2,454,000 )
Income tax expense - - - (270,000 ) (270,000 )
Net income (loss) $ 2,865,000 $ 987,000 $ (2,454,000 ) $ (1,392,000 ) $ 6,000

-17- ~~- 17 -~~

As of and for the nine months Hotel Real Estate Investment
ended March 31, 2019 Operations Operations Transactions Corporate Total
Revenues $ 45,276,000 $ 11,175,000 $ - $ - $ 56,451,000
Segment operating expenses (33,424,000 ) (5,929,000 ) - (1,789,000 ) (41,142,000 )
Segment income (loss) from operations 11,852,000 5,246,000 - (1,789,000 ) 15,309,000
Interest expense - mortgage (5,423,000 ) (1,957,000 ) - - (7,380,000 )
Loss on disposal of assets (398,000 ) - - - (398,000 )
Depreciation and amortization expense (1,896,000 ) (1,814,000 ) - - (3,710,000 )
Loss from investments - - (1,709,000 ) - (1,709,000 )
Income tax expense - - - (771,000 ) (771,000 )
Net income (loss) $ 4,135,000 $ 1,475,000 $ (1,709,000 ) $ (2,560,000 ) $ 1,341,000
Total assets $ 58,146,000 $ 52,120,000 $ 11,446,000 $ 5,559,000 $ 127,271,000
For the nine months Hotel Real Estate Investment
ended March 31, 2018 Operations Operations Transactions Corporate Total
Revenues $ 41,968,000 $ 10,930,000 $ - $ - $ 52,898,000
Segment operating expenses (31,905,000 ) (5,840,000 ) - (2,389,000 ) (40,134,000 )
Segment income (loss) from operations 10,063,000 5,090,000 - (2,389,000 ) 12,764,000
Interest expense - mortgage (5,436,000 ) (1,907,000 ) - - (7,343,000 )
Depreciation and amortization expense (2,050,000 ) (1,751,000 ) - - (3,801,000 )
Loss from investments - - (3,213,000 ) - (3,213,000 )
Income tax expense - - - (430,000 ) (430,000 )
Net income (loss) $ 2,577,000 $ 1,432,000 $ (3,213,000 ) $ (2,819,000 ) $ (2,023,000 )

NOTE 11 – RELATED PARTY AND OTHER FINANCING TRANSACTIONS
On July 2, 2014, the Partnership obtained from the Company an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The current loan balance of $3,000,000 was extended to June 30, 2019. During the fiscal year ended June 30, 2018, the Partnership made principal paydown of $1,250,000.

The ~~balance~~following summarizes the balances of related party ~~note~~and other notes payable ~~at March~~as of December 31, 2019 ~~includes obligation~~and June 30, 2019, respectively.
As of 12/31/2019 06/30/2019

Note payable - Hilton $ 3,167,000 $ 3,325,000
Note payable - Interstate 1,771,000 1,896,000
Other notes payable 12,000 40,000
Total related party and other notes payable $ 4,950,000 $ 5,261,000
Note payable to Hilton (Franchisor) ~~in the form of~~is a self-exhausting, interest free development incentive note which is reduced by approximately $316,000 annually through 2030 by Hilton if the Partnership is still a Franchisee with Hilton. ~~The outstanding balance of the note as of March 31, 2019 and June 30, 2018, was $3,404,000 and $3,642,000, respectively.~~

On February 1, 2017, Justice entered into an HMA with Interstate to manage the Hotel with an effective takeover date of February 3, 2017. The term of the management agreement is foran initial period of 10 years commencing on the takeover date and automatically renews for an additional yearnot to exceed five years in aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The key money contribution shall be amortized in equal monthly amounts over an eight (8) year period commencing on the second (2^nd) anniversary of the takeover date. ~~The $2,000,000~~As of December 31, 2019, and June 30, 2019, balance of the key money plus accrued interest is $1,004,000 and $2,049,000, respectively, and is included in restricted cash in the condensed consolidated balance ~~sheets as of March 31, 2019 and June 30, 2018.~~sheets. Unamortized portion of the key money ~~as of March 31, 2019 and June 30, 2018 were $1,958,000 and $2,000,000, respectively, and are~~is included in the related party ~~note~~notes payable in the condensed consolidated balance sheets.
In April 2017, Portsmouth obtained from InterGroup an unsecured short-term loan in the amount of $1,000,000 at 5% per year fixed interest, with a term of five months and maturing September 6, 2017. On September 1^st ~~2017, the short-term loan was extended to September 15, 2017 and paid off on September 13, 2017.~~

As of ~~March~~December 31, 2019, the Company had ~~capital~~finance lease obligations outstanding of ~~$1,256,000.~~$1,282,000. These ~~capital~~finance leases expire in various years through 2023 at rates ranging from 5.77% to ~~6.53%~~6.25% per annum. Minimum future lease payments for assets under ~~capital~~finance leases as of ~~March~~December 31, 2019 are as follows:

~~- 18 -~~
For the year ending June 30,
2019 $ 102,000
2020 405,000 $ 246,000
2021 405,000 492,000
2022 397,000 482,000
2023 90,000 182,000
Total minimum lease payments 1,399,000 1,402,000
Less interest on capital lease (143,000 )
Less interest on finance lease (120,000 )
Present value of future minimum lease payments $ 1,256,000 $ 1,282,000

Future minimum principal payments for all related party and other financing transactions are as follows:

For the year ending June 30,
2019 $ 396,000
2020 3,934,000 $ 585,000
2021 930,000 3,991,000
2022 946,000 1,022,000
2023 655,000 744,000
2024 567,000
Thereafter 2,796,000 2,308,000
$ 9,657,000 $ 9,217,000
-18-

In July 2018, InterGroup obtained a revolving $5,000,000 line of credit (“RLOC”) from CIBC Bank USA (“CIBC”). On July 31, 2018, $2,969,000 was drawn from the RLOC to pay off the mortgage note payable at Intergroup Woodland Village, Inc. (“Woodland Village”) and a new mortgage note payable was established at Woodland Village due to InterGroup for the amount drawn. Woodland Village holds a three-story apartment complex in ~~Los Angeles,~~Santa Monica, California and is 55.4% and 44.6% owned by Santa Fe and the Company, respectively. The RLOC carries a variable interest rate of 30-day LIBOR plus 3%. Interest is paid on a monthly basis. The RLOC and all accrued and unpaid interest ~~are~~were due in July 2019. In July 2019, the Company obtained a modification from CIBC which increased the RLOC by $3,000,000 and extended the maturity date from July 24, 2019 to July 23, 2020. The $2,969,000 mortgage due to InterGroup carries same terms as InterGroup’s RLOC.

Effective May 12, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan, in order to maintain certain minimum net worth and liquidity guarantor covenant requirements that Portsmouth was unable to satisfy independently as of March 31, 2017.

In connection with the redemption of the limited partnership interest of Justice, Justice Operating Company, LLC agreed to pay a total of $1,550,000 in fees to certain officers and directors of the Company for services rendered in connection with the redemption of the partnership interests, refinancing of the Justices properties and reorganization of Justice. This agreement was superseded by a letter dated December 11, 2013 from Justice, in which Justice assumed the payment obligations of Justice Operating Company, LLC. As of June 30, 2018, $200,000 of these fees remain payable. The balance was paid in full as of March 31, 2019.
As of September 30, 2017, Justice had an outstanding accounts payable balance to InterGroup for $116,000 for management of the Hotel from June to December of 2016. The balance was paid in full as of December 31, 2017.
~~Five~~Four of the Portsmouth directors serve as directors of InterGroup. ~~Three~~Two of those directors also serve as directors of Santa Fe. The ~~three~~two Santa Fe directors also serve as directors of InterGroup.

As Chairman of the 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 Portsmouth and Santa Fe and oversees the investment activity of those companies. Depending on certain market conditions and various risk factors, the Chief Executive Officer, Portsmouth and Santa Fe 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 the Portsmouth and Santa Fe, at risk in substantially the same manner as the Company in connection with investment decisions made on behalf of the Company.

NOTE 12 – ACCOUNTS PAYABLE AND OTHER LIABILITIES - JUSTICE
The following summarizes the balances of accounts payable and other liabilities – Justice as of December 31, 2019 and June 30, 2019.
As of 12/31/2019 06/30/2019

Trade payable $ 1,953,000 $ 1,792,000
Advance deposits 1,027,000 1,215,000
Property tax payable 1,046,000 1,046,000
Payroll and related accruals 1,826,000 2,584,000
Interest payable - 412,000
Withholding and other taxes payable 882,000 1,831,000
Security deposit 52,000 52,000
Other payables 1,861,000 2,366,000
Total accounts payable and other liabilities - Justice $ 8,647,000 $ 11,298,000
NOTE 13 – ACCOUNTS PAYABLE AND OTHER LIABILITIES
The following summarizes the balances of accounts payable and other liabilities as of December 31, 2019 and June 30, 2019.
As of 12/31/2019 06/30/2019

Trade payable $ 560,000 $ 521,000
Advance deposits 324,000 378,000
Property tax payable 935,000 595,000
Payroll and related accruals 49,000 47,000
Interest payable 223,000 221,000
Withholding and other taxes payable 1,069,000 1,108,000
Security deposit 743,000 736,000
Other payables 151,000 160,000
Total accounts payable and other liabilities $ 4,054,000 $ 3,766,000
NOTE 14 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.
-19-
~~- 19 -~~

Item 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

The Company may from time to time make forward-looking statements and projections concerning future expectations. When used in this discussion, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “could,” “will”, “would” and similar expressions, are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties, such as national and worldwide economic conditions, including the impact of recessionary conditions on tourism, travel and the lodging industry, the impact of terrorism and war on the national and international economies, including tourism and securities markets, energy and fuel costs, natural disasters, general economic conditions and competition in the hotel industry in the San Francisco area, seasonality, labor relations and labor disruptions, actual and threatened pandemics such as swine flu, partnership distributions, the ability to obtain financing at favorable interest rates and terms, securities markets, regulatory factors, litigation and other factors discussed below in this Report and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2018,~~2019, that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

As of ~~March~~December 31, 2019, the Company owned approximately ~~81.9%~~82.3% of the common shares of its subsidiary, Santa Fe and Santa Fe owned approximately 68.8% of the common shares of Portsmouth Square, Inc. InterGroup also directly owns approximately 13.4% of the common shares of Portsmouth. The ~~Company's~~Company’s principal source of revenue continues to be derived from the general and limited partnership interests of its subsidiary, Portsmouth, in the Justice Investors limited partnership (“Justice” or the “Partnership”) inclusive of hotel room revenue, food and beverage revenue, garage revenue, and revenue from other operating departments. The Company also generates income from its investments in real estate properties and from investment of its cash and securities assets. Justice owns the Hotel and related facilities, including a five-level underground parking garage. The financial statements of Justice have been consolidated with those of the Company.

The Hotel is operated by the Partnership as a full-service Hilton brand hotel pursuant to a Franchise License Agreement (the “License Agreement”) with Hilton. The Partnership entered into the License Agreement on December 10, 2004. The term of the License Agreement was for an initial period of 15 years commencing on the opening date, with an option to extend the License Agreement for another five years, subject to certain conditions. On June 26, 2015, the Partnership and Hilton entered into an amended franchise agreement which extended the License Agreement through 2030, modified the monthly royalty rate, extended geographic protection to the Partnership and also provided the Partnership certain key money cash incentives to be earned through 2030. The key money cash incentives were received on July 1, 2015.
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On February 1, 2017, Justice entered into an HMA with Interstate to manage the Hotel and related facilities with an effective takeover date of February 3, 2017. The term of HMA is for an initial period of ten years commencing on the takeover date and automatically renews for an additional year not to exceed five years in aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement.

The parking garage that is part of the Hotel property was managed by Ace Parking pursuant to a contract with the Partnership. The contract was terminated with an effective termination date of October 4, 2016. The Company began managing the parking garage in-house after the termination of Ace Parking. Effective February 3, 2017, Interstate took over the management of the parking garage along with the Hotel.
In addition to the operations of the Hotel, the Company also generates income from the ownership and management of real estate. Properties include sixteen apartment complexes, one commercial real estate property, and three single-family houses as strategic investments. The properties are located throughout the United States, but are concentrated in Texas and Southern California. The Company also has an investment in unimproved real property. All of the Company’s residential and commercial rental operating properties are managed in-house.

~~- 20 -~~
The Company acquires its investments in real estate and other investments utilizing cash, securities or debt, subject to approval or guidelines of the Board of Directors. The Company also invests in income-producing instruments, equity and debt securities and will consider other investments if such investments offer growth or profit potential.

Three Months Ended ~~March~~December 31, 2019 Compared to ~~the~~ Three Months Ended ~~March~~December 31, 2018

The Company had a net income of ~~$1,335,000~~$380,000 for the three months ended ~~March~~December 31, 2019 compared to net ~~income~~loss of ~~$779,000~~$1,122,000 for the three months ended ~~March~~December 31, 2018. The ~~increase in net income~~change is primarily attributable to ~~increased revenue from Hotel operations and gains from investment~~the decrease in loss on marketable securities.

Hotel Operations

The Company had net income from Hotel operations of ~~$1,270,000~~$825,000 for the three months ended ~~March~~December 31, 2019 compared to net income of ~~$1,369,000~~$321,000 for the three months ended ~~March~~December 31, 2018. The ~~decrease in net income~~change is primarily attributable to ~~a $398,000 loss on~~ the ~~disposal~~increase in Hotel revenue, offset by the rise of ~~assets.~~Hotel operating expenses.

The following table sets forth a more detailed presentation of Hotel operations for the three months ended ~~March~~December 31, 2019 and 2018.

For the three months ended March 31, 2019 2018
Hotel revenues:
Hotel rooms $ 13,521,000 $ 11,714,000
Food and beverage 1,218,000 1,748,000
Garage 652,000 756,000
Other operating departments 78,000 126,000
Total hotel revenues 15,469,000 14,344,000
Operating expenses excluding depreciation and amortization (11,378,000 ) (10,573,000 )
Operating income before interest, depreciation and amortization 4,091,000 3,771,000
Loss on disposal of assets (398,000 ) -
Interest expense - mortgage (1,812,000 ) (1,733,000 )
Depreciation and amortization expense (611,000 ) (669,000 )
Net income from Hotel operations $ 1,270,000 $ 1,369,000
For the three months ended December 31, 2019 2018
Hotel revenues:
Hotel rooms $ 12,497,000 $ 11,565,000
Food and beverage 1,425,000 1,565,000
Garage 776,000 734,000
Other operating departments 203,000 133,000
Total hotel revenues 14,901,000 13,997,000
Operating expenses excluding depreciation and amortization (11,730,000 ) (11,236,000 )
Operating income before interest, depreciation and amortization 3,171,000 2,761,000
Interest expense - mortgage (1,735,000 ) (1,797,000 )
Depreciation and amortization expense (611,000 ) (643,000 )
Net income from Hotel operations $ 825,000 $ 321,000

For the three months ended ~~March~~December 31, 2019, the Hotel had operating income of ~~$4,091,000~~$3,171,000 before interest expense, depreciation and amortization on total operating revenues of ~~$15,469,000~~$14,901,000 compared to operating income of ~~$3,771,000~~$2,761,000 before interest expense, depreciation and amortization on total operating revenues of ~~$14,344,000~~$13,997,000 for the three months ended ~~March~~December 31, 2018. ~~Room revenues increased~~Hotel room revenue rose by ~~$1,807,000~~$932,000 for the three months ended ~~March~~December 31, 2019 compared to the three months ended ~~March~~December 31, 2018. The increase is primarily due to the timing of Dreamforce, one of the largest annual citywide conventions in San Francisco, from September in 2018 ~~as a result of taking the optimal amount of group business with ancillary spending while growing higher rated transient segments.~~to November in 2019. Food and beverage revenue decreased by ~~$530,000~~$140,000 primarily due to decrease in banquet and catering revenue as room revenue shifted towards the transient segment from groups with banquet and catering spending. Revenue from garage increased by $42,000 as a result of ~~limiting midweek group business which resulted~~the increase in ~~fewer in house banquet events. Revenue from garage~~occupancy and ~~other~~monthly parkers. Other operating departments ~~decreased mainly~~revenue increased by $70,000 primarily due to ~~decrease~~increase in ~~monthly parking~~group cancellation revenue.

Total operating expenses increased by ~~$805,000~~$494,000 primarily due to annual wage increase ~~in group commission, credit card fees, management fees, franchise fees, wages and benefits~~ per ~~labor~~union bargaining agreements.
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The following table sets forth the average daily room rate, average occupancy percentage and RevPAR of the Hotel for the three months ended ~~March~~December 31, 2019 and 2018.

Three Months
Ended March 31,

Average
Daily Rate

Average
Occupancy %

RevPAR

2019 $ 290 95 % $ 276
2018 $ 250 95 % $ 239
Three Months
Ended December 31,

Average
Daily Rate

Average
Occupancy %


RevPAR

2019 $ 255 98 % $ 250
2018 $ 239 97 % $ 232

The Hotel’s revenues increased by ~~7.8%~~6.5% this quarter as compared to the previous comparable quarter. Average daily rate increased by ~~$40,~~$16, average occupancy ~~remained at 95%~~increased by 1%, and RevPAR increased by ~~$37~~$18 for the three months ended ~~March~~December 31, 2019 compared to the three months ended ~~March~~December 31, 2018.

~~- 21 -~~
Real Estate Operations

Net income from real estate operations for the three months ended ~~March~~December 31, 2019, decreased by ~~$79,000 compare~~$138,000 compared to the three months ended ~~March~~December 31, 2018, due to ~~increased operating expenses.~~an increase in payroll and repairs and maintenance. All of Company’s properties are managed in-house. Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiencies.

Investment Transactions

The Company had a net ~~gain~~loss on marketable securities of ~~$961,000~~$119,000 for the three months ended ~~March~~December 31, 2019 compared to a net loss on marketable securities of ~~$108,000~~$1,971,000 for the three months ended ~~March~~December 31, 2018. For the three months ended ~~March~~December 31, 2019, the Company had a net realized loss of ~~$169,000~~$3,000 and a net unrealized ~~gain~~loss of ~~$1,130,000.~~$116,000. For the three months ended ~~March~~December 31, 2018, the Company had a net realized gain of ~~$534,000~~$530,000 and a net unrealized loss of ~~$642,000.~~ $2,501,000.
Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.
The Company and its subsidiaries, Portsmouth and Santa Fe, compute and file income tax returns and prepare discrete income tax provisions for financial reporting. The income tax expense (benefit) during the three months ended December 31, 2019, and 2018 represents primarily the income tax effect of the pretax income (loss) at InterGroup and the pretax income of Portsmouth, which includes its share in net income of the Hotel.
Six Months Ended December 31, 2019 Compared to Six Months Ended December 31, 2018
The Company had net income of $1,024,000 for the six months ended December 31, 2019 compared to net income of $6,000 for the six months ended December 31, 2018. The increase in net income is primarily attributable to a decrease in loss on marketable securities, the rise in Hotel revenue, offset by the increase in Hotel operating expenses.
Hotel Operations
The Company had net income from Hotel operations of $2,521,000 for the six months ended December 31, 2019 compared to net income of $2,865,000 for the six months ended December 31, 2018. The change is primarily attributable to the rise in Hotel operating expenses, offset by the increase in Hotel revenue.
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The following table sets forth a more detailed presentation of Hotel operations for the six months ended December 31, 2019 and 2018.
For the six months ended December 31, 2019 2018
Hotel revenues:
Hotel rooms $ 25,811,000 $ 25,087,000
Food and beverage 2,647,000 3,014,000
Garage 1,512,000 1,508,000
Other operating departments 360,000 198,000
Total hotel revenues 30,330,000 29,807,000
Operating expenses excluding depreciation and amortization (23,078,000 ) (22,046,000 )
Operating income before interest, depreciation and amortization 7,252,000 7,761,000
Interest expense - mortgage (3,527,000 ) (3,611,000 )
Depreciation and amortization expense (1,204,000 ) (1,285,000 )
Net income from Hotel operations $ 2,521,000 $ 2,865,000
For the six months ended December 31, 2019, the Hotel had operating income of $7,252,000 before interest expense, depreciation and amortization on total operating revenues of $30,330,000 compared to operating income of $7,761,000 before interest expense, depreciation and amortization on total operating revenues of $29,807,000 for the six months ended December 31, 2018. Hotel room revenue rose by $724,000 for the six months ended December 31, 2019 compared to the six months ended December 31, 2018. The increase is primarily due to replacing guaranteed room revenue at low rates with room revenue at higher market rates driven by citywide conventions. Food and beverage revenue decreased by $367,000 primarily due to decrease in banquet and catering revenue as room revenue shifted towards the transient segment from groups with banquet and catering spending. Garage revenue remained consistent year over year. Revenue from other operating departments increased by $162,000 primarily due to increase in group cancellation revenue.
Total operating expenses increased by $1,032,000 primarily due to annual wage increase per union bargaining agreements.
The following table sets forth the average daily room rate, average occupancy percentage and RevPAR of the Hotel for the six months ended December 31, 2019 and 2018.
Six months
Ended December 31,

Average
Daily Rate

Average
Occupancy %

RevPAR

2019 $ 263 98 % $ 258
2018 $ 258 97 % $ 250
The Hotel’s revenues increased by 1.8% for the six months ended December 31, 2019, as compared to the six months ended December 31, 2018. Average daily rate increased by $5, average occupancy increased by 1%, and RevPAR increased by $8 for the six months ended December 31, 2019, compared to the six months ended December 31, 2018.
Real Estate Operations
Net income from real estate operations for the six months ended December 31, 2019 increased by $89,000 compare to the six months ended December 31, 2018 due to reduction in mortgage interest. All of Company’s properties are managed in-house. Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiencies.
Investment Transactions
The Company had a net loss on marketable securities of $568,000 for the six months ended December 31, 2019 compared to a net loss on marketable securities of $2,142,000 for the six months ended December 31, 2018. For the six months ended December 31, 2019, the Company had a net realized loss of $77,000 and a net unrealized loss of $491,000. For the six months ended December 31, 2018, the Company had a net realized gain of $522,000 and a net unrealized loss of $2,664,000.
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Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.

The Company and its subsidiaries, Portsmouth and Santa Fe, compute and file income tax returns and prepare discrete income tax provisions for financial reporting. The income tax expense during the ~~three~~six months ended ~~March~~December 31, 2019 and 2018 represents primarily the income tax effect of the pretax income at InterGroup and ~~at Portsmouth which includes its share in net income of the Hotel.~~
~~Nine Months Ended March 31, 2019 Compared to the Nine Months Ended March 31, 2018~~
The Company had a net income of $1,341,000 for the nine months ended March 31, 2019 compared to net loss of $2,023,000 for the nine months ended March 31, 2018. The change is primarily attributable to increased revenue from Hotel operations.
~~Hotel Operations~~
Net income from Hotel operations was $4,135,000 for the nine months ended March 31, 2019 compared to net income of $2,577,000 for the nine months ended March 31, 2018. The increase in net income is primarily due to increase in revenue.
~~The following table sets forth a more detailed presentation of Hotel operations for the nine months ended March 31, 2019 and 2018.~~
For the nine months ended March 31, 2019 2018
Hotel revenues:
Hotel rooms $ 38,608,000 $ 34,266,000
Food and beverage 4,232,000 5,121,000
Garage 2,160,000 2,272,000
Other operating departments 276,000 309,000
Total hotel revenues 45,276,000 41,968,000
Operating expenses excluding depreciation and amortization (33,424,000 ) (31,905,000 )
Operating income before interest, depreciation and amortization 11,852,000 10,063,000
Loss on disposal of assets (398,000 ) -
Interest expense - mortgage (5,423,000 ) (5,436,000 )
Depreciation and amortization expense (1,896,000 ) (2,050,000 )
Net income from Hotel operations $ 4,135,000 $ 2,577,000
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For the nine months ended March 31, 2019, the Hotel had operating income of $11,852,000 before interest, depreciation and amortization on total operating revenues of $45,276,000 compared to operating income of $10,063,000 before interest, depreciation and amortization on total operating revenues of $41,968,000 for the nine months ended March 31, 2018. Room revenues increased by $4,342,000 for the nine months ended March 31, 2019 compared to the nine months ended March 31, 2018 primarily as the result of taking the optimal amount of group business with ancillary spending while growing higher rated transient segments. Food and beverage revenue decreased by $889,000 as the result of limiting midweek group business. Garage revenue decreased by $112,000 due to decrease in monthly parking revenue. Revenue from other operating departments decreased by $33,000 as a result of decrease in movies revenues and forfeited deposits.
~~Total operating expenses increased by $1,519,000 due to increase in wages and benefits per labor agreements, group commission, credit card fees, franchise fees, and management fees.~~
~~The following table sets forth the average daily room rate, average occupancy percentage and RevPAR of the Hotel for the nine months ended March 31, 2019 and 2018.~~
Nine months
Ended March 31,

Average
Daily Rate

Average
Occupancy %

RevPAR

2019 $ 269 96 % $ 259
2018 $ 248 92 % $ 229
The Hotel’s total revenues increased by 7.9% for the nine months ended March 31, 2019 as compared to the nine months ended March 31, 2018. Average daily rate increased by $21 and RevPAR increased by $30 for the nine months ended March 31, 2019 compared to the nine months ended March 31, 2018. Average occupancy increased by 4% during the nine months ended March 31, 2019 versus the comparable period.
~~Real Estate Operations~~
Net income from real estate operations for the nine months ended March 31, 2019 increased by $43,000 compare to the nine months ended March 31, 2018 due to increase in revenue as a result of increased occupancy. All of the Company’s properties are managed in-house. Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiencies.
~~Investment Transactions~~
The Company had a net loss on marketable securities of $1,181,000 for the nine months ended March 31, 2019 compared to a net loss on marketable securities of $2,308,000 for the nine months ended March 31, 2018. For the nine months ended March 31, 2019, the Company had a net realized gain of $353,000 and a net unrealized loss of $1,534,000. For the nine months ended March 31, 2018, the Company had a net realized gain of $415,000 and a net unrealized loss of $2,723,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.
The Company and its subsidiaries, Portsmouth and Santa Fe, compute and file income tax returns and prepare discrete income tax provisions for financial reporting. The income tax expense during the nine months ended March 31, 2019 and 2018 represents primarily the income tax effect of the pretax loss at InterGroup and the pretax income ~~(loss)~~ of Portsmouth, which includes its share in net income of the Hotel.

MARKETABLE SECURITIES

The following table shows the composition of the Company’s marketable securities portfolio as of ~~March~~December 31, 2019 and June 30, ~~2018~~2019 by selected industry groups.

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% of Total
As of December 31, 2019 Investment
Industry Group Fair Value Securities

REIT’s and real estate ompanies $ 3,263,000 40.1 %
Energy 1,278,000 15.7 %
Insurance 1,109,000 13.6 %
Corporate bonds 883,000 10.8 %
Consumer cyclical 572,000 7.0 %
Basic material 546,000 6.7 %
Financial services 278,000 3.4 %
Technology 149,000 1.8 %
Industrials 70,000 0.9 %
$ 8,148,000 100.0 %

% of Total
As of March 31, 2019 Investment
Industry Group Fair Value Securities

Consumer $ 2,196,000 20.3 %
REIT's and real estate ompanies 2,032,000 18.8 %
Corporate Bonds 1,791,000 16.5 %
Basic material 1,626,000 15.0 %
Healthcare 772,000 7.1 %
Energy 747,000 6.9 %
Financial Services 389,000 3.6 %
Industrials 360,000 3.3 %
Other 921,000 8.5 %
$ 10,834,000 100.0 %
% of Total % of Total
As of June 30, 2018 Investment
As of June 30, 2019 Investment
Industry Group Fair Value Securities Fair Value Securities

REIT's and real estate ompanies $ 4,300,000 31.2 %
Corporate Bonds 2,282,000 16.5 %
REITs and real estate companies $ 3,069,000 31.8 %
Consumer cyclical 1,448,000 14.9 %
Corporate bonds 1,420,000 14.6 %
Financial 951,000 9.8 %
Energy 950,000 9.8 %
Basic material 829,000 8.5 %
Technology 1,813,000 13.1 % 651,000 6.7 %
Industrials 193,000 2.0 %
Healthcare 1,777,000 12.8 % 185,000 1.9 %
Communications 1,071,000 7.7 %
Basic material 1,038,000 7.5 %
Industrials 404,000 2.9 %
Energy 311,000 2.2 %
Other 845,000 6.1 %
$ 13,841,000 100.0 % $ 9,696,000 100.0 %

As of ~~March~~December 31, 2019, ~~14% of~~ the Company’s investment ~~in marketable~~portfolio includes approximately 34 equity positions. The Company holds three equity securities that comprised more than 10% of the equity value of the portfolio. The largest security position represents 27% of the portfolio ~~consist~~and consists of the common stock of American Realty Investors, Inc. (NYSE: ARL), which is included in the REITs and real estate companies’ industry group.
As of June 30, 2019, the Company’s investment portfolio includes approximately 29 equity positions. The Company holds three equity securities that comprised more than 10% of the equity value of the portfolio. The largest security position represents 18% of the portfolio and consists of the common stock of American Realty Investors, Inc. (NYSE: ARL), which is included in the REITs and real estate companies’ industry group.
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The following table shows the net gain or loss on the Company’s marketable securities and the associated margin interest and trading expenses for the respective periods:

For the three months ended March 31, 2019 2018
Net gain (loss) on marketable securities $ 961,000 $ (108,000 )
Unrealized loss on other investments - (42,000 )
Impairment loss on other investments (98,000 ) -
Dividend and interest income 194,000 92,000
Margin interest expense (139,000 ) (140,000 )
Trading and management expenses (173,000 ) (120,000 )
Net gain (loss) from investment transactions $ 745,000 $ (318,000 )
For the three months ended December 31, 2019 2018
Net loss on marketable securities $ (119,000 ) $ (1,971,000 )
Dividend and interest income 111,000 88,000
Margin interest expense (116,000 ) (132,000 )
Trading and management expenses (125,000 ) (61,000 )
Net loss from investment transactions $ (249,000 ) $ (2,076,000 )

~~- 24 -~~
For the nine months ended March 31, 2019 2018
For the six months ended December 31, 2019 2018
Net loss on marketable securities $ (1,181,000 ) $ (2,308,000 ) $ (568,000 ) $ (2,142,000 )
Unrealized loss on other investments - (42,000 )
Impairment loss on other investments (98,000 ) (200,000 )
Dividend and interest income 379,000 223,000 241,000 185,000
Margin interest expense (427,000 ) (492,000 ) (252,000 ) (288,000 )
Trading and management expenses (382,000 ) (394,000 ) (282,000 ) (209,000 )
Net loss from investment transactions $ (1,709,000 ) $ (3,213,000 ) $ (861,000 ) $ (2,454,000 )

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel ~~operations, its~~and real estate ~~operations, and the~~operations. The Company may also receive cash from its investment ~~of its cash~~ in marketable securities and other investments.

To fund the redemption of limited partnership interests and to repay the prior mortgage, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan in December of 2013. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan bears an interest rate of 5.275% per annum and matures in January 2024. Outstanding principal balance on the loan was ~~$94,090,000~~$92,914,000 and ~~$95,018,000~~$93,746,000 as of ~~March~~December 31, 2019 and June 30, ~~2018,~~2019, respectively. As additional security for the mortgage loan, there is a limited guaranty executed by the Portsmouth in favor of the mortgage lender. The mezzanine loan is a secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The mezzanine interest only loan ~~bears~~had an interest atrate of 9.75% per annum and ~~matures in~~a maturity date of January 1, 2024. As additional security for the mezzanine loan, there is a limited guaranty executed by Portsmouth in favor of the mezzanine lender. Effective as of May 12, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. On July 31, 2019, Mezzanine refinanced the Mezzanine Loan by entering into a new mezzanine loan agreement (“New Mezzanine Loan Agreement”) with Cred Reit Holdco LLC in the amount of $20,000,000. The prior Mezzanine Loan was paid off. Interest rate on the new mezzanine loan is 7.25% and the loan matures on January 1, 2024. Interest only payments are due monthly.

On July 2, 2014, the Partnership obtained from ~~the Company~~InterGroup an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The ~~current~~ loan ~~balance of $3,000,000~~ was extended to June 30, ~~2019. During the fiscal year ended~~2020. The balance of this loan was $3,000,000 as of December 31, 2019 and June 30, ~~2018, the Partnership made principal paydown of $1,250,000.~~
~~In April 2017, Portsmouth obtained from InterGroup an unsecured short-term loan~~2019, and is eliminated in the ~~amount of $1,000,000 at 5% per year fixed interest, with a term of five months and maturing September 6, 2017. On September 1~~^st ~~2017, the short-term loan was extended to September 15, 2017 and paid off on September 13, 2017.~~condensed consolidated balance sheets.

In July 2018, InterGroup obtained a revolving $5,000,000 line of credit (“RLOC”) from CIBC Bank USA (“CIBC”). On July 31, 2018, $2,969,000 was drawn from the RLOC to pay off the mortgage note payable at Intergroup Woodland Village, Inc. (“Woodland Village”) and a new mortgage note payable was established at Woodland Village due to InterGroup for the amount drawn. Woodland Village holds a three-story apartment complex in ~~Los Angeles,~~Santa Monica, California and is 55.4% and 44.6% owned by Santa Fe and the Company, respectively. The RLOC carries a variable interest rate of 30-day LIBOR plus 3%. Interest is paid on a monthly basis. The RLOC and all accrued and unpaid interest ~~are~~were due in July 2019. In July 2019, the Company obtained a modification from CIBC which increased the RLOC by $3,000,000 and extended the maturity date from July 24, 2019 to July 23, 2020. The $2,969,000 mortgage due to InterGroup carries same terms as InterGroup’s RLOC.
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On August 31, 2018, $1,005,000 was drawn from the RLOC to pay off a mortgage note payable on a single-family house located in Los Angeles, California. On September 28, 2018, the Company obtained a new mortgage in the amount of $1,000,000 on the same property. The interest rate on the new loan is fixed at 4.75% per annum for the first five years and variable for the remaining of the term. The note matures in October 2048. Net proceeds of $995,000 received as a result of the refinance was used to pay down the RLOC.

~~The~~Despite an uncertain economy, the Hotel has continued to generate positive operating income. While the debt service requirements related to the loans may create some additional risk for the Company and its ability to generate cash flows in the future, management believes that cash flows from the operations of the Hotel and the garage will continue to be sufficient to meet all of the Partnership’s current and future obligations and financial requirements.

~~- 25 -~~
The Company has invested in short-term, income-producing instruments and in equity and debt securities when deemed appropriate. The ~~Company's~~Company’s marketable securities are classified as trading with unrealized gains and losses recorded through the consolidated statements of operations.

Management believes that its cash, marketable securities, and the cash flows generated from those assets and from the partnership management fees, will be adequate to meet the Company’s current and future obligations. Additionally, management believes there is significant appreciated value in the Hotel property to support additional borrowings, if necessary.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off balance sheet arrangements.

MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary as of ~~March~~December 31, 2019, the Company’s material financial obligations which also including interest payments.

3 Months Year Year Year Year 6 Months Year Year Year Year
Total 2019 2020 2021 2022 2023 Thereafter Total 2020 2021 2022 2023 2024 Thereafter
Mortgage and subordinated notes payable $ 173,320,000 $ 856,000 $ 3,061,000 $ 12,490,000 $ 3,102,000 $ 37,820,000 $ 115,991,000 $ 170,968,000 $ 1,433,000 $ 12,483,000 $ 3,095,000 $ 37,812,000 $ 107,655,000 $ 8,490,000
Other notes payable 9,657,000 396,000 3,934,000 930,000 946,000 655,000 2,796,000 9,217,000 585,000 3,991,000 1,022,000 744,000 567,000 2,308,000
Interest 43,675,000 3,125,000 9,528,000 9,136,000 8,646,000 7,636,000 5,604,000 33,535,000 4,460,000 8,598,000 8,148,000 7,014,000 3,401,000 1,914,000
Total $ 226,652,000 $ 4,377,000 $ 16,523,000 $ 22,556,000 $ 12,694,000 $ 46,111,000 $ 124,391,000 $ 213,720,000 $ 6,478,000 $ 25,072,000 $ 12,265,000 $ 45,570,000 $ 111,623,000 $ 12,712,000

IMPACT OF INFLATION

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. Room rates can be, and usually are, adjusted to account for inflationary cost increases. Since ~~the Company~~Interstate has the power and ability to adjust hotel room rates on an ongoing basis, there should be minimal impact on partnership revenues due to inflation. Partnership revenues are also subject to interest rate risks, which may be influenced by inflation. For the two most recent fiscal years, the impact of inflation on the ~~Company's~~Company’s income is not viewed by management as material.

The ~~Company's~~Company’s residential rental properties provide income from short-term operating leases and no lease extends beyond one year. Rental increases are expected to offset anticipated increased property operating expenses.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

Critical accounting policies are those that are most significant to the presentation of our financial position and results of operations and require judgments by management in order to make estimates about the effect of matters that are inherently uncertain. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to the consolidation of our subsidiaries, to our revenues, allowances for bad debts, accruals, asset impairments, other investments, income taxes and commitments and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions. There have been no material changes to the Company’s critical accounting policies during the ~~nine~~six months ended ~~March~~December 31, 2019 except for the adoption of ASU ~~2016-18 and ASC 606.~~2016-02. Please refer to the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2018~~2019 for a summary of the critical accounting policies.

-26- ~~- 26 -~~

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-Q.

Item 4. Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, ~~and on the material weakness noted below,~~ the Chief Executive Officer and Principal Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are ~~not~~ effective in ensuring that information required to be disclosed in this filing is accumulated and communicated to management and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

~~As stated~~There have been no changes in the Company’s Annual Report on Form 10-K for the year ended June 30, 2017, we identified a material weakness in internal controls over financial reporting related to our deferred income taxes and income tax expense during the fourth quarter of fiscal 2017. During the quarter ended September 30, 2017, we hired a new tax CPA specialist to perform a detailed analysis which was completed for the year ended June 30, 2017. We also assigned our audit committee with oversight responsibilities for the process. The material weakness related to tax provision preparation had not been remediated in fiscal year 2018. While significant progress was made as of June 30, 2018, these controls were not operating completely effectively. The Company has taken further steps, including increased scrutiny over the tax provision preparation process, to remediate the material weakness and improved its internal control over financial reporting during the ~~nine months ended March 31, 2019.~~last quarterly period

~~- 27 -~~
covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.
OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

During the period ending ~~March~~December 31, 2019, there were no pending or threatened legal ~~actions as follows:~~actions.
~~NONE~~

Item 1A. RISK FACTORS

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There have been no events that are required to be reported under this Item.

Item 3. DEFAULTS UPON SENIOR SECURITIES

There have been no events that are required to be reported under this Item.

Item 4. MINE SAFETY DISCLOSURES

There have been no events that are required to be reported under this Item.

Item 5. OTHER INFORMATION

There have been no events that are required to be reported under this Item.
-27-

Item 6. EXHIBITS

31.1 Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

31.2 Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.INS
~~101.INS~~ XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema

101.CAL XBRL Taxonomy Extension Calculation Linkbase

101.DEF XBRL Taxonomy Extension Definition Linkbase

101.LAB XBRL Taxonomy Extension Label Linkbase

101.PRE XBRL Taxonomy Extension Presentation Linkbase

-28- ~~- 28 -~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE INTERGROUP CORPORATION
(Registrant)

Date:~~May 3, 2019~~January 24, 2020 by /s/ John V. Winfield
John V. Winfield
President, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

Date:~~May 3, 2019~~January 24, 2020 by /s/ Danfeng Xu
Danfeng Xu
Treasurer and Controller
(Principal Financial Officer)

-29- ~~- 29 -~~

			Accumulated			Net Book
December 31, 2019	Cost		Depreciation			Value

Land	$	2,738,000	$	-		$	2,738,000
Finance lease ROU assets		1,746,000		(137,000	)		1,609,000
Furniture and equipment		30,268,000		(27,206,000	)		3,062,000
Building and improvements		63,879,000		(31,748,000	)		32,131,000
Investment in Hotel, net	$	98,631,000	$	(59,091,000	)	$	39,540,000

			Gross		Gross			Net			Fair
Investment	Cost		Unrealized Gain		Unrealized Loss			Unrealized Loss			Value

As of March 31, 2019
Corporate
Equities	$	20,957,000	$	1,372,000	$	(11,495,000	)	$	(10,123,000	)	$	10,834,000

As of June 30, 2018
Corporate
Equities	$	22,388,000	$	2,450,000	$	(10,997,000	)	$	(8,547,000	)	$	13,841,000

Type	March 31, 2019		June 30, 2018		December 31, 2019		June 30, 2019
Private equity hedge fund, at cost	$	376,000	$	554,000	$	376,000	$	376,000
Other preferred stock, at cost		236,000		259,000		188,000		236,000
	$	612,000	$	813,000	$	564,000	$	612,000

					12/31/2019		06/30/2019
As of	3/31/2019		6/30/2018		Total - Level 1		Total - Level 1
Assets:	Total - Level 1		Total - Level 1
Investment in marketable securities:
Consumer	$	2,196,000	$	-
REITs and real estate companies		2,032,000		4,300,000	$	3,263,000	$	3,069,000
Corporate Bonds		1,791,000		2,282,000
Energy						1,278,000		950,000
Insurance						1,109,000		-
Corporate bonds						883,000		1,420,000
Consumer cyclical						572,000		1,448,000
Basic material		1,626,000		1,038,000		546,000		829,000
Financial services						278,000		951,000
Technology						149,000		651,000
Industrials						70,000		193,000
Healthcare		772,000		1,777,000		-		185,000
Energy		747,000		311,000
Financial Services		389,000		229,000
Industrials		360,000		404,000
Other		921,000		3,500,000
	$	10,834,000	$	13,841,000	$	8,148,000	$	9,696,000

Assets								Level 3		December 31, 2019		Net loss for the six months ended December 31, 2019
					Net loss for the nine months
Assets	Level 3		March 31, 2019		ended March 31, 2019
Other non-marketable investments	$	612,000	$	612,000	$	(98,000	)	$	564,000	$	564,000	$	-

		Number of			Weighted Average		Weighted Average	Aggregate
		Shares			Exercise Price		Remaining Life	Intrinsic Value

Oustanding at	July 1, 2017		368,000		$	17.21	5.17 years	$	3,046,000
Granted			-			-
Exercised			-			-
Forfeited			-			-
Exchanged			-			-
Outstanding at	June 30, 2018		368,000		$	17.21	4.17 years	$	3,505,000
Exercisable at	June 30, 2018		318,000		$	16.47	3.79 years	$	3,257,000
Vested and Expected to vest at	June 30, 2018		368,000		$	17.21	4.17 years	$	3,505,000

Oustanding at	July 1, 2018		368,000		$	17.21	4.17 years	$	3,505,000
Granted			-			-
Exercised			(26,805	)		20.52
Forfeited			-			-
Exchanged
Outstanding at	March 31, 2019		341,195		$	16.95	3.32 years	$	4,690,000
Exercisable at	March 31, 2019		330,395		$	16.62	3.17 years	$	4,653,000
Vested and Expected to vest at	March 31, 2019		341,195		$	16.95	3.32 years	$	4,690,000

As of and for the three months	Hotel			Real Estate			Investment
ended March 31, 2019	Operations			Operations			Transactions		Corporate			Total
Revenues	$	15,469,000		$	3,744,000		$	-	$	-		$	19,213,000
Segment operating expenses		(11,378,000	)		(2,051,000	)		-		(667,000	)		(14,096,000	)
Segment income (loss) from operations		4,091,000			1,693,000			-		(667,000	)		5,117,000
Interest expense - mortgage		(1,812,000	)		(598,000	)		-		-			(2,410,000	)
Loss on disposal of assets		(398,000	)		-			-		-			(398,000	)
Depreciation and amortization expense		(611,000	)		(607,000	)		-		-			(1,218,000	)
Gain from investments		-			-			745,000		-			745,000
Income tax expense		-			-			-		(501,000	)		(501,000	)
Net income (loss)	$	1,270,000		$	488,000		$	745,000	$	(1,168,000	)	$	1,335,000
Total assets	$	58,146,000		$	52,120,000		$	11,446,000	$	5,559,000		$	127,271,000

For the three months	Hotel			Real Estate			Investment
ended March 31, 2018	Operations			Operations			Transactions			Corporate			Total
As of and for the three months																Hotel			Real Estate			Investment
ended December 31, 2019																Operations			Operations			Transactions			Corporate			Total
Revenues	$	14,344,000		$	3,628,000		$	-		$	-		$	17,972,000		$	14,901,000		$	3,839,000		$	-		$	-		$	18,740,000
Segment operating expenses		(10,573,000	)		(1,843,000	)		-			(828,000	)		(13,244,000	)		(11,730,000	)		(2,089,000	)		-			(581,000	)		(14,400,000	)
Segment income (loss) from operations		3,771,000			1,785,000			-			(828,000	)		4,728,000			3,171,000			1,750,000			-			(581,000	)		4,340,000
Interest expense - mortgage		(1,733,000	)		(627,000	)		-			-			(2,360,000	)		(1,735,000	)		(595,000	)		-			-			(2,330,000	)
Depreciation and amortization expense		(669,000	)		(591,000	)		-			-			(1,260,000	)		(611,000	)		(621,000	)		-			-			(1,232,000	)
Loss from investments		-			-			(318,000	)		-			(318,000	)		-			-			(249,000	)		-			(249,000	)
Income tax expense		-			-			-			(11,000	)		(11,000	)		-			-			-			(149,000	)		(149,000	)
Net income (loss)	$	1,369,000		$	567,000		$	(318,000	)	$	(839,000	)	$	779,000		$	825,000		$	534,000		$	(249,000	)	$	(730,000	)	$	380,000
Total assets																$	59,981,000		$	51,064,000		$	8,712,000		$	6,460,000		$	126,217,000

As of and for the six months	Hotel			Real Estate			Investment
ended December 31, 2019	Operations			Operations			Transactions			Corporate			Total
Revenues	$	30,330,000		$	7,556,000		$	-		$	-		$	37,886,000
Segment operating expenses		(23,078,000	)		(4,039,000	)		-			(1,341,000	)		(28,458,000	)
Segment income (loss) from operations		7,252,000			3,517,000			-			(1,341,000	)		9,428,000
Interest expense - mortgage		(3,527,000	)		(1,200,000	)		-			-			(4,727,000	)
Depreciation and amortization expense		(1,204,000	)		(1,241,000	)		-			-			(2,445,000	)
Loss from investments		-			-			(861,000	)		-			(861,000	)
Income tax expense		-			-			-			(371,000	)		(371,000	)
Net income (loss)	$	2,521,000		$	1,076,000		$	(861,000	)	$	(1,712,000	)	$	1,024,000
Total assets	$	59,981,000		$	51,064,000		$	8,712,000		$	6,460,000		$	126,217,000

For the six months	Hotel			Real Estate			Investment
ended December 31, 2018	Operations			Operations			Transactions			Corporate			Total
Revenues	$	29,807,000		$	7,431,000		$	-		$	-		$	37,238,000
Segment operating expenses		(22,046,000	)		(3,878,000	)		-			(1,122,000	)		(27,046,000	)
Segment income (loss) from operations		7,761,000			3,553,000			-			(1,122,000	)		10,192,000
Interest expense - mortgage		(3,611,000	)		(1,359,000	)		-			-			(4,970,000	)
Depreciation and amortization expense		(1,285,000	)		(1,207,000	)		-			-			(2,492,000	)
Loss from investments		-			-			(2,454,000	)		-			(2,454,000	)
Income tax expense		-			-			-			(270,000	)		(270,000	)
Net income (loss)	$	2,865,000		$	987,000		$	(2,454,000	)	$	(1,392,000	)	$	6,000

As of and for the nine months	Hotel			Real Estate			Investment
ended March 31, 2019	Operations			Operations			Transactions			Corporate			Total
Revenues	$	45,276,000		$	11,175,000		$	-		$	-		$	56,451,000
Segment operating expenses		(33,424,000	)		(5,929,000	)		-			(1,789,000	)		(41,142,000	)
Segment income (loss) from operations		11,852,000			5,246,000			-			(1,789,000	)		15,309,000
Interest expense - mortgage		(5,423,000	)		(1,957,000	)		-			-			(7,380,000	)
Loss on disposal of assets		(398,000	)		-			-			-			(398,000	)
Depreciation and amortization expense		(1,896,000	)		(1,814,000	)		-			-			(3,710,000	)
Loss from investments		-			-			(1,709,000	)		-			(1,709,000	)
Income tax expense		-			-			-			(771,000	)		(771,000	)
Net income (loss)	$	4,135,000		$	1,475,000		$	(1,709,000	)	$	(2,560,000	)	$	1,341,000
Total assets	$	58,146,000		$	52,120,000		$	11,446,000		$	5,559,000		$	127,271,000

For the nine months	Hotel			Real Estate			Investment
ended March 31, 2018	Operations			Operations			Transactions			Corporate			Total
Revenues	$	41,968,000		$	10,930,000		$	-		$	-		$	52,898,000
Segment operating expenses		(31,905,000	)		(5,840,000	)		-			(2,389,000	)		(40,134,000	)
Segment income (loss) from operations		10,063,000			5,090,000			-			(2,389,000	)		12,764,000
Interest expense - mortgage		(5,436,000	)		(1,907,000	)		-			-			(7,343,000	)
Depreciation and amortization expense		(2,050,000	)		(1,751,000	)		-			-			(3,801,000	)
Loss from investments		-			-			(3,213,000	)		-			(3,213,000	)
Income tax expense		-			-			-			(430,000	)		(430,000	)
Net income (loss)	$	2,577,000		$	1,432,000		$	(3,213,000	)	$	(2,819,000	)	$	(2,023,000	)

For the year ending June 30,
2019	$	102,000
2020		405,000		$	246,000
2021		405,000			492,000
2022		397,000			482,000
2023		90,000			182,000
Total minimum lease payments		1,399,000			1,402,000
Less interest on capital lease		(143,000	)
Less interest on finance lease					(120,000	)
Present value of future minimum lease payments	$	1,256,000		$	1,282,000

Three Months Ended March 31,	Average Daily Rate		Average Occupancy %			RevPAR

2019	$	290		95	%	$	276
2018	$	250		95	%	$	239

Six months Ended December 31,		Average Daily Rate		Average Occupancy %			RevPAR

	2019	$	263		98	%	$	258
	2018	$	258		97	%	$	250

Nine months Ended March 31,	Average Daily Rate		Average Occupancy %			RevPAR

2019	$	269		96	%	$	259
2018	$	248		92	%	$	229

			% of Total
As of December 31, 2019			Investment
Industry Group	Fair Value		Securities

REIT’s and real estate ompanies	$	3,263,000		40.1	%
Energy		1,278,000		15.7	%
Insurance		1,109,000		13.6	%
Corporate bonds		883,000		10.8	%
Consumer cyclical		572,000		7.0	%
Basic material		546,000		6.7	%
Financial services		278,000		3.4	%
Technology		149,000		1.8	%
Industrials		70,000		0.9	%
	$	8,148,000		100.0	%

31.1		Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

31.2		Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS
~~101.INS~~	XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

	THE INTERGROUP CORPORATION
		(Registrant)

Date:~~May 3, 2019~~January 24, 2020	by	/s/ John V. Winfield
		John V. Winfield
		President, Chairman of the Board and
		Chief Executive Officer
		(Principal Executive Officer)

Date:~~May 3, 2019~~January 24, 2020	by	/s/ Danfeng Xu
		Danfeng Xu
		Treasurer and Controller
		(Principal Financial Officer)