Cover
Cover - USD ($) | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 28, 2022 | Dec. 31, 2021 | |
Cover [Abstract] | ||||
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Jun. 30, 2022 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2022 | |||
Current Fiscal Year End Date | --06-30 | |||
Entity File Number | 0-4057 | |||
Entity Registrant Name | PORTSMOUTH SQUARE, INC | |||
Entity Central Index Key | 0000079661 | |||
Entity Tax Identification Number | 94-1674111 | |||
Entity Incorporation, State or Country Code | CA | |||
Entity Address, Address Line One | 1516 S. Bundy Drive | |||
Entity Address, Address Line Two | Suite 200 | |||
Entity Address, City or Town | Los Angeles | |||
Entity Address, State or Province | CA | |||
Entity Address, Postal Zip Code | 90025 | |||
City Area Code | (310) | |||
Local Phone Number | 889-2500 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 5,734,000 | |||
Entity Common Stock, Shares Outstanding | 734,187 | |||
Auditor Name | WithumSmith+Brown, PC | Moss Adams LLP | ||
Auditor Location | East Brunswick, NJ | Irvine, California | ||
Auditor Firm ID | 100 | 659 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
ASSETS | ||
Investment in hotel, net | $ 31,230,000 | $ 31,513,000 |
Investment in marketable securities | 541,000 | 3,536,000 |
Other investments | 20,000 | |
Cash and cash equivalents | 2,662,000 | 2,310,000 |
Restricted cash | 6,226,000 | 6,222,000 |
Accounts receivable - hotel, net | 377,000 | 194,000 |
Other assets | 852,000 | 701,000 |
Deferred tax assets | 7,911,000 | 8,055,000 |
Total assets | 49,799,000 | 52,551,000 |
Liabilities: | ||
Accounts payable and other liabilities - Hotel | 8,307,000 | 7,440,000 |
Accounts payable and other liabilities | 235,000 | 190,000 |
Accounts payable to related party | 4,908,000 | 3,193,000 |
Due to securities broker | 130,000 | 1,715,000 |
Related party notes payable | 17,721,000 | 10,738,000 |
SBA Loan - Justice | 2,000,000 | |
Finance Leases | 183,000 | 664,000 |
Mortgage notes payable - Hotel, net | 108,747,000 | 110,134,000 |
Total liabilities | 140,231,000 | 136,074,000 |
Commitments and Contingencies - Note 16 | ||
Shareholders’ deficit: | ||
Common stock, no par value: Authorized shares - 750,000; 734,187 shares issued and outstanding as of June 30, 2022 and 2021, respectively | 2,092,000 | 2,092,000 |
Accumulated deficit | (92,524,000) | (84,960,000) |
Total Portsmouth shareholders’ deficit | (90,432,000) | (82,868,000) |
Noncontrolling interest | (655,000) | |
Total shareholders’ deficit | (90,432,000) | (83,523,000) |
Total liabilities and shareholders’ deficit | $ 49,799,000 | $ 52,551,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Jun. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | ||
Common stock, shares authorized | 750,000 | 750,000 |
Common stock, shares issued | 734,187 | 734,187 |
Common stock, shares outstanding | 734,187 | 734,187 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||
Revenue - Hotel | $ 31,534,000 | $ 14,668,000 |
Costs and operating expenses | ||
Hotel operating expenses | (27,451,000) | (17,911,000) |
Hotel depreciation and amortization expense | (2,209,000) | (2,079,000) |
General and administrative expense | (1,130,000) | (796,000) |
Total costs and operating expenses | (30,790,000) | (20,786,000) |
Income (loss) from operations | 744,000 | (6,118,000) |
Other income (expense) | ||
Interest expense - mortgage | (6,549,000) | (6,710,000) |
Interest expense - related party | (1,375,000) | (572,000) |
Gain on asset disposal | 12,000 | |
Gain on forgiveness of debt | 2,000,000 | 4,719,000 |
Net gain on marketable securities | 915,000 | 368,000 |
Net (loss) gain on marketable securities - Comstock | (2,056,000) | 1,031,000 |
Impairment loss on other investments | (20,000) | (38,000) |
Dividend and interest income | 121,000 | 17,000 |
Trading and margin interest expense | (203,000) | (141,000) |
Total other expense, net | (7,167,000) | (1,314,000) |
Loss before income taxes | (6,423,000) | (7,432,000) |
Income tax (expense) benefit | (142,000) | 2,146,000 |
Net loss | (6,565,000) | (5,286,000) |
Less: Net loss attributable to the noncontrolling interest | 58,000 | |
Net loss attributable to Portsmouth | $ (6,565,000) | $ (5,228,000) |
Basic and diluted net loss per share attributable to Portsmouth | $ (8.94) | $ (7.12) |
Weighted average number of common shares outstanding - basic and diluted | 734,187 | 734,187 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) | Common Stock [Member] | Retained Earnings [Member] | Total Portsmouth Shareholders Deficit [Member] | Noncontrolling Interest [Member] | Total |
Balance at Jun. 30, 2020 | $ 2,092,000 | $ (73,809,000) | $ (71,717,000) | $ (5,824,000) | $ (77,541,000) |
Balance, shares at Jun. 30, 2020 | 734,183 | ||||
Net loss | (5,228,000) | (5,228,000) | (58,000) | (5,286,000) | |
Reclassify noncontrolling interest due to purchase of Partnership interest | (5,923,000) | (5,923,000) | 5,923,000 | ||
Purchase of Partnership interest | (696,000) | (696,000) | |||
Shares Issued | |||||
Shares Issued, shares | 4 | ||||
Balance at Jun. 30, 2021 | $ 2,092,000 | (84,960,000) | (82,868,000) | (655,000) | (83,523,000) |
Balance, shares at Jun. 30, 2021 | 734,187 | ||||
Net loss | (6,565,000) | (6,565,000) | (6,565,000) | ||
Reclassify noncontrolling interest due to purchase of Partnership interest | (999,000) | (999,000) | 999,000 | ||
Purchase of Partnership interest | (344,000) | (344,000) | |||
Balance at Jun. 30, 2022 | $ 2,092,000 | $ (92,524,000) | $ (90,432,000) | $ (90,432,000) | |
Balance, shares at Jun. 30, 2022 | 734,187 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (6,565,000) | $ (5,286,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net unrealized gain on marketable securities | (1,348,000) | (1,939,000) |
Gain on disposal of assets | (12,000) | |
Gain on forgiveness of debt | (2,000,000) | (4,719,000) |
Deferred income taxes | 144,000 | (2,081,000) |
Impairment loss on other investments | 20,000 | 38,000 |
Depreciation and amortization | 2,209,000 | 2,079,000 |
Amortization of loan cost | 295,000 | 335,000 |
Amortization of related party notes payable | (567,000) | (567,000) |
Changes in operating assets and liabilities: | ||
Investment in marketable securities | 4,343,000 | (1,032,000) |
Accounts receivable - Hotel, net | (183,000) | 57,000 |
Other assets | (151,000) | 130,000 |
Accounts payable and other liabilities - Hotel | 867,000 | (148,000) |
Accounts payable and other liabilities | 45,000 | (65,000) |
Accounts payable related party | 1,715,000 | 808,000 |
Due to securities broker | (1,585,000) | 1,715,000 |
Net cash used in operating activities | (2,761,000) | (10,687,000) |
Cash flows from investing activities: | ||
Payments for hotel furniture, equipment and building improvements | (1,926,000) | (1,068,000) |
Investment in Justice | (344,000) | (696,000) |
Investment in real estate | 980,000 | |
Proceeds from other investments | 29,000 | |
Net cash used in investing activities | (2,270,000) | (755,000) |
Cash flows from financing activities: | ||
Proceeds from related party note payable | 7,550,000 | 3,650,000 |
Payments of mortgage and finance leases | (2,113,000) | (2,011,000) |
Issuance cost from refinance of related party loan | (50,000) | (50,000) |
Proceeds from SBA Loan - Justice | 2,000,000 | |
Net cash provided by financing activities | 5,387,000 | 3,589,000 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 356,000 | (7,853,000) |
Cash, cash equivalents, and restricted cash at the beginning of the period | 8,532,000 | 16,385,000 |
Cash, cash equivalents, and restricted cash at the end of the period | 8,888,000 | 8,532,000 |
Supplemental information: | ||
Interest paid | 6,590,000 | 6,720,000 |
Taxes paid | 27,000 | 23,000 |
Supplemental non-cash investing and financing transactions: | ||
Additions to Hotel equipment through finance leases | $ 30,000 |
BUSINESS AND SIGNIFICANT ACCOUN
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Description of Business Portsmouth’s primary business was conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”). Effective July 15, 2021, Portsmouth completed the purchase of 100 0.7 Prior to its dissolution effective December 23, 2021, Justice owned and operated 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 through its subsidiaries Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”). Mezzanine was a wholly owned subsidiary of the Partnership; Operating is a wholly owned subsidiary of Mezzanine. Effective December 23, 2021, Portsmouth replaced Justice as the single member 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 a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (“Hilton”) through January 31, 2030. Operating entered into a hotel management agreement (“HMA”) with Aimbridge Hospitality (“Aimbridge”) to manage the Hotel, along with its five-level parking garage, with an effective date of February 3, 2017. The term of the management agreement is for an initial period of ten years automatically renews for successive one (1) year periods, not to exceed five years in the aggregate, subject to certain conditions 1.70% As of June 30, 2022, The InterGroup Corporation (“InterGroup”), a public company, owns approximately 75.0 2.5 67.8 Principles of Consolidation The consolidated financial statements include the accounts of the Company and Justice up to its dissolution in December 2021 at which time all subsidiaries of Justice became subsidiaries of Portsmouth as the Company replaced Justice as the single member of Justice’s subsidiaries where appropriate. All significant inter-company transactions and balances have been eliminated. Investment in Hotel, Net Property and equipment are stated at cost. Building improvements are depreciated on a straight-line basis over their useful lives ranging from 3 39 3 7 Repairs and maintenance are charged to expense as incurred. Costs of significant renewals and improvements are capitalized and depreciated over the shorter of its remaining estimated useful life or life of the asset. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts; any resulting gain or loss is included in other income (expenses). The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with generally accepted accounting principles (“GAAP”). If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between the assets’ carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. For a depreciable asset, the new cost will be depreciated over the asset’s remaining useful life. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the property. No Investment in Marketable Securities Marketable securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. Marketable securities are classified as trading securities with all unrealized gains and losses on the Company’s investment portfolio recorded through the consolidated statements of operations. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased and are carried at cost, which approximates fair value. As of June 30, 2022 and 2021, the Company does no Restricted Cash Restricted cash is comprised of amounts held by lenders for payment of real estate taxes, insurance, replacement and capital addition reserves for the Hotel. It also includes key money received from Aimbridge that is restricted for capital improvements. Accounts Receivable - Hotel, Net Accounts receivable from Hotel customers are carried at cost less an allowance for doubtful accounts that is based on management’s assessment of the collectability of accounts receivable. The net accounts receivable balance on July 1, 2020 was $ 251,000 392,000 211,000 15,000 17,000 Other Assets Other assets include prepaid insurance, estimated life insurance proceeds, prepaid expenses, other investments, net, and other miscellaneous assets. Other investments include non-marketable securities (carried at cost, net of any impairments loss). The Company has no significant influence or control over the entities that issue these 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. For the years ended June 30, 2022 and 2021, the Company recorded impairment losses related to other investments of $ 20,000 38,000 2,269,000 2,249,000 Income Taxes The Company consolidated Justice (“Hotel”) for financial reporting purposes up to its dissolution in December 2021 and was not taxed on its non-controlling interest in the Hotel. Effective July 15, 2021, the Company become the owner of 100% of Justice and began to include all the Hotel’s income and expense accounts into its income taxes calculations. The income tax expense or benefit during the fiscal years ended June 30, 2022 and 2021, respectively, represent the income tax effect on the Company’s pretax loss which includes its share in the net loss of the Hotel accordingly. Deferred income taxes are calculated under the liability method. Deferred income tax assets and liabilities are based on differences between the financial statement and tax basis of assets and liabilities at the current enacted tax rates. Changes in deferred income tax assets and liabilities are included as a component of income tax expense. Changes in deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets where realization is not likely. We have considered the income tax accounting and disclosure implications of the relief provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020, and the American Rescue Plan Act enacted on March 11, 2021. The effect of tax law changes is required to be recognized either in the interim period in which the legislation is enacted or reflected in the computation of the annual effective tax rate, depending on the nature of the change. As of June 30, 2022 and 2021, we evaluated the income tax provisions of the CARES Act and the American Rescue Plan Act and have determined there to be no material effect on the fiscal years’ tax provision. We will continue to evaluate the income tax provisions of both acts and monitor the tax law changes that could have income tax accounting and disclosure implications. The Company accounts for its uncertain tax positions pursuant to ASC 740, Income Taxes. 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. Accounts Payable and Other Liabilities Accounts payable and other liabilities include trade payables, advance customer deposits, accrued wages, accrued real estate taxes, and other liabilities. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting standards for fair value measurement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: Level 1 Level 2 Level 3 Revenue Recognition On July 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers Advertising Costs Advertising costs are expensed as incurred and are included in Hotel operating expenses in the consolidated statements of operations. Advertising costs were $ 61,000 110,000 Basic and Diluted Loss per Share Basic loss per share is calculated based upon the weighted average number of common shares outstanding during each fiscal year. As of June 30, 2022 and 2021, the Company did not have any potentially dilutive securities outstanding. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to the recording of allowance for doubtful accounts which are based on management’s assessment of the collectability of accounts receivable, as of the end of the fiscal year. Actual results may differ from those estimates. Management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets and when appropriate, records tax valuation allowances based on that evidence and estimates. Debt Issuance Costs Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability and are amortized over the life of the debt. Loan amortization costs are included in interest expense in the consolidated statement of operations. Recently Issued and Adopted Accounting Pronouncements As of June 30, 2022, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on the Company’s consolidated financial statements. |
LIQUIDITY
LIQUIDITY | 12 Months Ended |
Jun. 30, 2022 | |
Liquidity | |
LIQUIDITY | NOTE 2 - LIQUIDITY Historically, our cash flows have been primarily generated from our Hotel operations. However, the responses by federal, state, and local civil authorities to the COVID-19 pandemic continues to have a material detrimental impact on our liquidity. For the fiscal years ended June 30, 2022 our net cash used in operating activities was $ 2,761,000 . We have taken several steps to preserve capital and increase liquidity at our Hotel, including implementing strict cost management measures to eliminate non-essential expenses, renegotiating certain reoccurring expenses, and temporarily closing certain hotel services and outlets. As the hospitality and travel environment continues to improve, we will continue to evaluate what services we bring back and anticipate making upgrades to our guest rooms during fiscal year 2023. The Company had cash and cash equivalents of $ 2,662,000 2,310,000 6,226,000 6,222,000 411,000 1,821,000 On December 16, 2020, Justice and InterGroup entered into a loan modification agreement which increased Justice’s borrowing from InterGroup as needed up to $ 10,000,000 July 31, 2021 July 31, 2023 11,350,000 16,000,000 7,550,000 14,200,000 On April 9, 2020, Justice entered into a loan agreement (“SBA Loan”) with CIBC Bank USA under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (the “SBA”). Justice received proceeds of $ 4,719,000 1.00 4,719,000 On February 3, 2021, Justice entered into a second loan agreement (“Second SBA Loan”) with CIBC Bank USA administered by the SBA. Justice received proceeds of $ 2,000,000 February 3, 2026 1.00 2,000,000 Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating and other expenditures, including management and franchise fees, corporate expenses, payroll and related costs, taxes, interest and principal payments on our outstanding indebtedness, and repairs and maintenance of the Hotel. Our long-term liquidity requirements primarily consist of funds necessary to pay for scheduled debt maturities and capital improvements of the Hotel. We will continue to finance our business activities primarily with existing cash, including from the activities described above, and cash generated from our operations. After considering our approach to liquidity and accessing our available sources of cash, we believe that our cash position will be adequate to meet anticipated requirements for operating and other expenditures, including corporate expenses, payroll and related benefits, taxes and compliance costs and other commitments, for at least twelve months from the date of issuance of these financial statements, even if current levels of occupancy and revenue per occupied room (“RevPAR”, calculated by multiplying the hotel’s average daily room rate by its occupancy percentage) were to persist. The objectives of our cash management policy are to maintain existing leverage levels and the availability of liquidity, while minimizing operational costs. We believe that our cash on hand, along with other potential sources of liquidity that management may be able to obtain, will be sufficient to fund our working capital needs, as well as our capital lease and debt obligations for at least the next twelve months and beyond. However, there can be no guarantee that management will be successful with its plan. The following table provides a summary as of June 30, 2022, the Company’s material financial obligations which also including interest payments: SCHEDULE OF FINANCIAL OBLIGATIONS INCLUDING INTEREST PAYMENTS Year Year Year Year Year Total 2023 2024 2025 2026 2027 Thereafter Mortgage notes payable $ 109,114,000 $ 1,721,000 $ 107,393,000 $ - $ - $ - $ - Related party notes payable 17,721,000 567,000 14,767,000 567,000 567,000 462,000 791,000 Interest 11,080,000 7,871,000 3,209,000 - - - - Total $ 137,915,000 $ 10,159,000 $ 125,369,000 $ 567,000 $ 567,000 $ 462,000 $ 791,000 |
REVENUE
REVENUE | 12 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 3 - REVENUE The following table present our revenue disaggregated by revenue streams. SCHEDULE OF REVENUE DISAGGREGATION BY REVENUE STREAMS For the year ended June 30, 2022 2021 Hotel revenues: Hotel rooms $ 26,599,000 $ 12,138,000 Food and beverage 1,471,000 293,000 Garage 3,112,000 2,117,000 Other operating departments 352,000 120,000 Total Hotel revenue $ 31,534,000 $ 14,668,000 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 ● Noncancelable room reservations and banquet or conference reservations ● Other ancillary goods and services ● Components of package reservations 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. Contract assets and liabilities We do not have any material contract assets as of June 30, 2022 and 2021, other than trade and other receivables, net on our 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 consolidated balance sheets and had a balance of $ 375,000 493,000 161,000 Contract costs We consider sales commissions earned to be incremental costs of obtaining a contract with our customers. As a practical expedient, we expense these costs as incurred as our contracts with customers are less than one year. |
INVESTMENT IN HOTEL, NET
INVESTMENT IN HOTEL, NET | 12 Months Ended |
Jun. 30, 2022 | |
Investment In Hotel Net | |
INVESTMENT IN HOTEL, NET | NOTE 4 – INVESTMENT IN HOTEL, NET Investment in Hotel consisted of the following as of: SCHEDULE OF INVESTMENT IN HOTEL, NET Accumulated Net Book June 30, 2022 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 1,805,000 (922,000 ) 883,000 Furniture and equipment 32,860,000 (28,567,000 ) 4,293,000 Building and improvements 56,274,000 (31,344,000 ) 24,930,000 Investment in Hotel, net $ 92,063,000 $ (60,833,000 ) $ 31,230,000 Accumulated Net Book June 30, 2021 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 1,805,000 (606,000 ) 1,199,000 Furniture and equipment 31,014,000 (27,956,000 ) 3,058,000 Building and improvements 56,194,000 (30,062,000 ) 26,132,000 Investment in Hotel, net $ 90,137,000 $ (58,624,000 ) $ 31,513,000 |
INVESTMENT IN REAL ESTATE
INVESTMENT IN REAL ESTATE | 12 Months Ended |
Jun. 30, 2022 | |
Real Estate [Abstract] | |
INVESTMENT IN REAL ESTATE | NOTE 5 – INVESTMENT IN REAL ESTATE In August 2007, the Company agreed to acquire 50 100 973,000 50% 980,000 |
INVESTMENT IN MARKETABLE SECURI
INVESTMENT IN MARKETABLE SECURITIES | 12 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT IN MARKETABLE SECURITIES | NOTE 6 - INVESTMENT IN MARKETABLE SECURITIES The Company’s investment in marketable securities consists primarily of corporate equities. The Company has also invested in income producing securities, which may include interests in real estate-based companies and REITs, where financial benefit could insure to its shareholders through income and/or capital gain. As of June 30, 2022 and 2021, 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: SCHEDULE OF CHANGES IN UNREALIZED GAINS AND LOSSES ON INVESTMENTS Gross Gross Net Investment Cost Unrealized Gain Unrealized Loss Unrealized Loss Fair As of June 30, 2022 Corporate Equities $ 643,000 $ 42,000 $ (144,000 ) $ (102,000 ) $ 541,000 As of June 30, 2021 Corporate Equities $ 4,987,000 $ 438,000 $ (1,889,000 ) $ (1,451,000 ) $ 3,536,000 As of June 30, 2021, approximately 19 June 30, 2022, As of June 30, 2022 and 2021, the Company had $ 73,000 1,873,000 0 1,789,000 Net (loss) gain on marketable securities on the statement of operations is comprised of realized and unrealized losses. Below is the breakdown of the two components for the years ended June 30, 2022 and 2021, respectively. SCHEDULE OF NET (LOSS) GAIN ON MARKETABLE SECURITIES For the year ended June 30, 2022 2021 Realized (loss) gain on marketable securities $ (433,000 ) $ 32,000 Realized loss on marketable securities related to Comstock (2,056,000 ) (572,000 ) Unrealized gain on marketable securities 1,348,000 336,000 Unrealized gain on marketable securities related to Comstock - 1,603,000 Net (loss) gain on marketable securities $ (1,141,000 ) $ 1,399,000 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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, due to securities broker and obligations for securities sold) or the nature and terms of the obligation (i.e., other notes payable and mortgage notes payable). The assets measured at fair value on a recurring basis are as follows: SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS As of June 30, 2022 Level 1 Assets: Investment in marketable securities: Communication services $ 355,000 REITs and real estate companies 162,000 Basic materials 18,000 Utilities 5,000 Technology 1,000 Investment in marketable securities $ 541,000 As of June 30, 2021 Level 1 Assets: Investment in marketable securities: Communication services $ 1,334,000 Basic materials 720,000 Industrials 653,000 REITs and real estate companies 438,000 Energy 250,000 Healthcare 141,000 Investment in marketable securities $ 3,536,000 The fair values of investments in marketable securities are determined by the most recently traded price of each security at the balance sheet date. 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 or adjusted to record the fair value of new instruments received (i.e., preferred shares) in exchange for old instruments (i.e., debt instruments). The following table shows the fair value hierarchy for these assets measured at fair value on a non-recurring basis as follows: SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON NONRECURRING BASIS Assets Level 3 June 30, 2022 Net loss for the Other non-marketable investments $ - $ - $ (20,000 ) Net loss for the Assets Level 3 June 30, 2021 year ended June Other non-marketable investments $ 20,000 $ 20,000 $ (38,000 ) For fiscal year ended June 30, 2022 and 2021, we received distribution from other non-marketable investments of zero 30,000 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. These investments are reviewed on a periodic basis for other-than-temporary impairment. When determining the fair value of these investments on a non-recurring basis, the Company uses valuation techniques such as the market approach and the unobservable inputs include factors such as conversion ratios and the stock price of the underlying convertible instruments. 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. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 8 – OTHER ASSETS Other assets consist of the following as of June 30: SCHEDULE OF OTHER ASSETS 2022 2021 Inventory - Hotel $ 27,000 $ 37,000 Prepaid expenses 534,000 381,000 Miscellaneous assets 291,000 283,000 Total other assets $ 852,000 $ 701,000 |
RELATED PARTY AND OTHER FINANCI
RELATED PARTY AND OTHER FINANCING TRANSACTIONS | 12 Months Ended |
Jun. 30, 2022 | |
Related Party And Other Financing Transactions | |
RELATED PARTY AND OTHER FINANCING TRANSACTIONS | NOTE 9 – RELATED PARTY AND OTHER FINANCING TRANSACTIONS The following summarizes the balances of related party and other notes payable as of June 30, 2022 and 2021, respectively. SCHEDULE OF RELATED PARTY AND OTHER NOTES PAYABLE As of June 30, 2022 2021 Note payable - InterGroup $ 14,200,000 $ 6,650,000 Note payable - Hilton 2,375,000 2,692,000 Note payable - Aimbridge 1,146,000 1,396,000 SBA Loan - Justice - 2,000,000 Total related party and other notes payable $ 17,721,000 $ 12,738,000 On July 2, 2014, the Partnership obtained from InterGroup an unsecured loan in the principal amount of $ 4,250,000 12 2 3 The loan was extended to July 31, 2023 10,000,000 11,350,000 16,000,000 14,200,000 6,650,000 zero Note payable to Hilton (Franchisor) is a self-exhausting, interest free development incentive note which is reduced by approximately $ 317,000 through 2030 On February 1, 2017, Operating entered an HMA with Ambridge to manage the Hotel with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of 10 2,000,000 8 On April 9, 2020, Justice entered into a loan agreement (“SBA Loan”) with CIBC Bank USA under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (the “SBA”). Justice received proceeds of $ 4,719,000 April 9, 2022 1.00 4,719,000 On February 3, 2021, Justice entered into a second loan agreement (“Second SBA Loan”) with CIBC Bank USA administered by the SBA. Justice received proceeds of $ 2,000,000 February 3, 2026 1.00 2,000,000 Future minimum principal payments for all related party and other financing transactions are as follows: SCHEDULE OF FUTURE MINIMUM PRINCIPAL PAYMENTS For the year ending June 30, 2023 $ 567,000 2024 14,767,000 2025 567,000 2026 567,000 2027 462,000 Thereafter 791,000 Long term debt $ 17,721,000 As of June 30, 2022 and 2021, the Company had accounts payable to related party of $ 4,908,000 3,193,000 To fund the redemption of limited partnership interests and to repay the prior mortgage of $ 42,940,000 97,000,000 20,000,000 5.275 Beginning in February 2017, the loan began to amortize over a thirty-year period through its maturity date of January 2024 89,114,000 90,745,000 The mezzanine interest only loan had an interest rate of 9.75% per annum and a maturity date of January 1, 2024 20,000,000 9.75 7.25 January 1, 2024 Effective 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 20,000,000 The Company’s Board of Directors is currently comprised of directors John V. Winfield, William J. Nance, John C. Love, Jerold R. Babin, and Steve Grunwald. All the Company’s directors also serve as directors of InterGroup except for Mr. Grunwald. The Company’s director and Chairman of the Audit Committee, William J. Nance, serves as Comstock’s director and Chairman of the Audit and Finance, Compensation and Nominating and Governance Committees of Comstock. John V. Winfield serves as Chief Executive Officer and Chairman of the Company and InterGroup. Effective June 2016, Mr. Winfield became the Managing Director of Justice till its dissolution in December 2021. Depending on certain market conditions and various risk factors, the Chief Executive Officer and InterGroup may, at times, invest in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of the Chief Executive Officer and the resources of InterGroup, at risk in connection with investment decisions made on behalf of the Company. On May 24, 2021, John V. Winfield resigned effective immediately as the Company’s President and the Company’s Board of Directors elected David C. Gonzalez as the Company’s new President, effective as of May 24, 2021. Mr. Gonzalez serves as Vice President Real Estate of InterGroup and is an advisor of the Executive Strategic Real Estate and Securities Investment Committee of InterGroup and Portsmouth. |
MORTGAGE NOTES PAYABLE
MORTGAGE NOTES PAYABLE | 12 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
MORTGAGE NOTES PAYABLE | NOTE 10 – MORTGAGE NOTES PAYABLE On December 18, 2013: (i) Justice Operating Company, LLC, a Delaware limited liability company (“Operating”), entered into a loan agreement (“Mortgage Loan Agreement”) with Bank of America (“Mortgage Lender”); and (ii) Justice Mezzanine Company, a Delaware limited liability company (“Mezzanine”), entered into a mezzanine loan agreement (“Mezzanine Loan Agreement” and, together with the Mortgage Loan Agreement, the “Loan Agreements”) with ISBI San Francisco Mezz Lender LLC (“Mezzanine Lender” and, together with Mortgage Lender, the “Lenders”). The Partnership was the sole member of Mezzanine until its dissolution in December 2021 when Portsmouth replaced the Partnership as the sole member of Mezzanine. Mezzanine is the sole member of Operating. The Loan Agreements provide for a $ 97,000,000 20,000,000 The Mortgage Loan is secured by Operating’s principal asset, the Hilton San Francisco-Financial District (the “Property”). The Mortgage Loan bears an interest rate of 5.275 matures in January 2024 ten years The Mezzanine Loan is secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The Mezzanine Loan had an interest rate of 9.75 January 1, 2024 20,000,000 7.25 January 1, 2024 The Guaranties are limited to what are commonly referred to as “bad boy” acts, including: (i) fraud or intentional misrepresentations; (ii) gross negligence or willful misconduct; (iii) misapplication or misappropriation of rents, security deposits, insurance or condemnation proceeds; and (iv) failure to pay taxes or insurance. The Guaranties are full recourse guaranties under identified circumstances, including failure to maintain “single purpose” status which is a factor in a consolidation of Operating or Mezzanine in a bankruptcy of another person, transfer or encumbrance of the Property in violation of the applicable loan documents, Operating or Mezzanine incurring debts that are not permitted, and the Property becoming subject to a bankruptcy proceeding. Pursuant to the Guaranties, the Partnership was required to maintain a certain minimum net worth and liquidity. 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 the $ 97,000,000 20,000,000 The DSCR for Operating had been below 1.00 from third quarter of fiscal year 2020 to third quarter of fiscal year 2022 while it is required to maintain a DSCR of at least 1.10 to 1.00 for two consecutive quarters. 1.69 1.34 Each of the Loan Agreements contains customary representations and warranties, events of default, reporting requirements, affirmative covenants and negative covenants, which impose restrictions on, among other things, organizational changes of the respective borrower, operations of the Property, agreements with affiliates and third parties. Each of the Loan Agreements also provides for mandatory prepayments under certain circumstances (including casualty or condemnation events) and voluntary prepayments, subject to satisfaction of prescribed conditions set forth in the Loan Agreements. As of June 30, 2022 and 2021, the Company had the following mortgages: SCHEDULE OF MORTGAGES June 30, 2022 June 30, 2021 Interest Rate Origination Date Maturity Date $ 89,114,000 $ 90,745,000 Fixed 5.28 December 18, 2013 January 1, 2024 20,000,000 20,000,000 Fixed 7.25 July 31, 2019 January 1, 2024 109,114,000 110,745,000 Mortgage notes payable - hotel (367,000 ) (611,000 ) Net debt issuance costs $ 108,747,000 $ 110,134,000 Total mortgage notes payable - hotel Future minimum principal payments for mortgage notes payable are as follows: SCHEDULE OF MORTGAGE NOTES PAYABLE FUTURE MINIMUM PRINCIPLE PAYMENTS For the year ending June 30, 2023 $ 1,721,000 2024 107,393,000 $ 109,114,000 |
MANAGEMENT AGREEMENTS
MANAGEMENT AGREEMENTS | 12 Months Ended |
Jun. 30, 2022 | |
Management Agreements | |
MANAGEMENT AGREEMENTS | NOTE 11 – MANAGEMENT AGREEMENTS On February 1, 2017, Operating entered into a Hotel management agreement (“HMA”) with Aimbridge Hospitality (“Aimbridge”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of management agreement is for an initial period of 10 2,000,000 8 nd zero 1,146,000 1,396,000 1,055,000 242,000 250,000 |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 12 – CONCENTRATION OF CREDIT RISK As of June 30, 2022 and 2021, all accounts receivables are related to Hotel customers. The Hotel had two customers that accounted for 88 183,000 89 64,000 The Company maintains its cash and cash equivalents and restricted cash with various financial institutions that are monitored regularly for credit quality. At times, such cash and cash equivalents holdings may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) or other federally insured limits; however, the Company has never suffered any losses as a result of such high balances. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13 - INCOME TAXES The provision for income tax (expense) benefit consists of the following: SCHEDULE OF PROVISION FOR INCOME TAX (EXPENSE) BENEFIT For the years ended June 30, 2022 2021 Federal Current tax expense $ - $ - Deferred tax (expense) benefit (310,000 ) 1,606,000 Federal income tax benefit (310,000 ) 1,606,000 State Current tax (expense)benefit (1,000 ) 65,000 Deferred tax benefit 169,000 475,000 State and local income tax benefit 168,000 540,000 Total income tax (expense) benefit $ (142,000 ) $ 2,146,000 A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows: SCHEDULE OF STATUTORY FEDERAL INCOME TAX RATE For the years ended June 30, 2022 2021 Statutory federal tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 2.0 % 5.8 % Non-taxable PPP loan 21.7 % - Provision to return adjustment 8.3 % 2.9 % Valuation allowance -236.7 % -4.3 % Deferral True-Up – Justice Basis Diff in FA 180.9 % - Other 0.6 % 3.6 % Effective income tax rate reconciliation percentage -2.2 % 29.0 % The components of the Company’s deferred tax assets and (liabilities) as of June 30, 2022 and 2021 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 Deferred tax assets Net operating loss carryforward $ 10,925,000 $ 9,802,000 Investment reserve - 671,000 Interest expense 2,231,000 2,684,000 Accruals and reserves 587,000 - Depreciation 15,646,000 - Other 1,800,000 1,423,000 Deferred tax assets before valuation allowance 31,189,000 14,580,000 Less Valuation allowance (22,775,000 ) (951,000 ) Deferred tax assets after valuation allowance 8,414,000 13,629,000 Deferred tax liabilities Basis difference in Justice - (5,092,000 ) State taxes (503,000 ) (482,000 ) Deferred Tax Liabilities (503,000 ) (5,574,000 ) Net deferred tax assets $ 7,911,000 $ 8,055,000 Management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets to determine if it is more likely than not that the deferred tax asset will be realized. As of June 30, 2022, it has been determined that it is more likely than not that the deferred tax asset will not be recognized with the exception of forecasted five-year projected income. Thus, there was a valuation allowance of $ 22,775,000 21,824,000 As of June 30, 2022, the Company had net operating loss (“NOL”) carryforwards of approximately $ 35,011,000 and $ 40,416,000 for federal and state purposes, respectively. Of the $ 35,011,000 14,697,000 $ 20,314,000 80 Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. As of June 30, 2022, it has been determined that there are no uncertain tax positions likely to impact the Company. Utilization of the net operating loss carryover may be subject a substantial annual limitation if it should be determined that there has been a change in the ownership of more than 50 percent of the value of the Company’s stock, pursuant to Section 382 of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating loss carryovers before utilization. The Company and the Partnership files tax returns as prescribed by the tax laws of the jurisdictions in which it operates and is subject to examination by federal, state and local jurisdictions, where applicable. Note that the Partnership was dissolved in 2021 and filed its required final tax returns as a result of the Company completing the acquisition of 100% of Justice Investors LP. As of June 30, 2022, tax years beginning in fiscal years 2018 and 2017 remain open to examination by the major tax jurisdictions and are subject to the statute of limitations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 14 - SEGMENT INFORMATION The Company operates in two Information below represents reporting segments for the years ended June 30, 2022 and 2021, respectively. Segment loss from Hotel operations consists of the operation of the Hotel and operation of the garage. Income (loss) from investments consists of net investment gain (loss), dividend and interest income and investment related expenses. SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT As of and for the year Hotel Investment ended June 30, 2022 Operations Transactions Other Total Revenues $ 31,534,000 $ - $ - $ 31,534,000 Segment operating expenses (27,451,000 ) - (1,130,000 ) (28,581,000 ) Segment income (loss) 4,083,000 - (1,130,000 ) 2,953,000 Interest expense - mortgage (6,549,000 ) - - (6,549,000 ) Interest expense – related party (1,375,000 ) - - (1,375,000 ) Gain on debt forgiveness 2,000,000 2,000,000 Depreciation and amortization expense (2,209,000 ) - - (2,209,000 ) Loss from investments - (1,243,000 ) - (1,243,000 ) Income tax expense - - (142,000 ) (142,000 ) Net loss $ (4,050,000 ) $ (1,243,000 ) $ (1,272,000 ) $ (6,565,000 ) Total assets $ 40,810,000 $ 541,000 $ 8,448,000 $ 49,799,000 As of and for the year Hotel Investment ended June 30, 2021 Operations Transactions Other Total Revenues $ 14,668,000 $ - $ - $ 14,668,000 Segment operating expenses (17,911,000 ) - (796,000 ) (18,707,000 ) Segment loss (3,243,000 ) - (796,000 ) (4,039,000 ) Segment income (loss) (3,243,000 ) - (796,000 ) (4,039,000 ) Interest expense – mortgage (6,710,000 ) - - (6,710,000 ) Interest expense – related party (572,000 ) - - (572,000 ) Gain on disposal of asset 12,000 - - 12,000 Gain on debt forgiveness 4,719,000 - - 4,719,000 Gain on debt forgiveness 4,719,000 - - 4,719,000 Depreciation and amortization expense (2,079,000 ) - - (2,079,000 ) Gain from investments - 1,237,000 - 1,237,000 Income (loss) from investments - 1,237,000 - 1,237,000 Income tax benefit - - 2,146,000 2,146,000 Net income (loss) $ (7,873,000 ) $ 1,237,000 $ 1,350,000 $ (5,286,000 ) Total assets $ 40,367,000 $ 3,556,000 $ 8,628,000 $ 52,551,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS As discussed in Note 9 – Related Party and Other Financing Transactions, upon the dissolution of Justice in December 2021, Portsmouth assumed Justice’s note payable to InterGroup in the amount of $ 11,350,000 16,000,000 July 31, 2023 14,200,000 6,650,000 Certain shared costs and expenses, primarily administrative expenses, rent and insurance are allocated between the Company and InterGroup based on management’s estimate of the pro rata utilization of resources. For the years ended June 30, 2022 and 2021, these expenses were approximately $ 144,000 96,000 Four of the Company’s Directors serve as directors of InterGroup. As Chairman of the Executive Strategic Real Estate and Securities Investment Committee 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 President, Chief Executive Officer, and Chairman of InterGroup and oversees the investment activity of InterGroup. Effective June 2016, Mr. Winfield became the Managing Director of Justice. Depending on certain market conditions and various risk factors, the Chief Executive Officer and InterGroup 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 these related parties because it places the personal resources of the Chief Executive Officer and the resources of InterGroup at risk in substantially the same manner as the Company in connection with investment decisions made on behalf of the Company. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES Cash Management Agreement As part of the Hotel refinancing effective December 18, 2013, Operating entered into a Cash Management Agreement with Bank of America, N.A. (“Lender”) and Wells Fargo Bank, N.A. (“Cash Management Bank”) whereby all cash received by Operating is to be deposited into a business checking account controlled by the Cash Management Bank up to the loan maturity date. Additionally, other terms of the Cash Management Agreement provide that effective February 2019 or upon a Property Improvement Plan (“PIP”) requirement by Hilton (“Franchisor”) deemed the “Cash Sweep Period” during which all excess cash generated by Operating beyond the monthly budgeted expenses and debt services including principal and interest, insurance reserves, real estate taxes reserve, furniture fixtures and equipment (“FF&E”) reserves, for the senior and mezzanine loans, will be held by the Cash Management Bank for future hotel improvements as required by the date or a PIP. Currently, any and all funds are being controlled by the Cash Management Bank according to the Cash Management Agreement. Franchise Agreements The Partnership entered into a Franchise License Agreement (the “License Agreement”) with the HLT Existing Franchise Holding LLC (“Hilton”) on December 10, 2004. The term of the License agreement was for an initial period of 15 Since the opening of the Hotel as a full brand Hilton in January 2006, it has incurred monthly royalties, program fees and information technology recapture charges equal to a percentage of the Hotel’s gross room revenue. Fees for such services during fiscal year 2022 and 2021 totaled approximately $ 2,107,000 703,000 Hotel Employees On February 3, 2017, Aimbridge assumed all labor union agreements and retained employees of their choice to continue providing services to the Hotel. As of June 30, 2022, approximately 86% of those employees were represented by one of three labor unions, and their terms of employment were determined under various collective bargaining agreements (“CBAs”) to which Aimbridge was a party. CBA for Local 2 (Hotel and Restaurant Employees) expired on August 13, 2022 and is currently under review. CBA for Local 856 (International Brotherhood of Teamsters) will expire on December 31, 2022. CBA for Local 39 (Stationary Engineers) will expire on July 31, 2024. Negotiation of collective bargaining agreements, which includes not just terms and conditions of employment, but scope and coverage of employees, is a regular and expected course of business operations for the Company and Aimbridge. The Company expects and anticipates that the terms of conditions of CBAs will have an impact on wage and benefit costs, operating expenses, and certain hotel operations during the life of each CBA and incorporates these principles into its operating and budgetary practices. Legal Matters Portsmouth Square Inc., through its operating company Justice Investors Operating Co., a Delaware limited liability company (the “Company”), is the owner of the real property located at 750 Kearny Street in San Francisco, currently improved with a 27 – story building which houses a Hilton Hotel (the “Property”). The Property was improved pursuant to approvals granted by the City and County of San Francisco (the “City”) in 1970. Those approvals included a Major Encroachment Permit (“Permit”) by which the Company was authorized to construct an ornamental overhead pedestrian bridge across Kearny Street, connecting the Property to the City park and underground parking garage known as Portsmouth Square (the “Bridge”). The construction of the Bridge was a condition of the City’s approval of the construction of the hotel structure on the Property. Effective on May 24, 2022, the City has revoked the Permit and directed the Company to remove the Bridge at the Company’s expense, including construction management costs and traffic control. Pursuant to a letter dated June 13, 2022, the City’s Department of Public works has specifically directed the “removal of the unpermitted pedestrian bridge and all related physical encroachments in the public right-of-way and on City property” and the submission of a general bridge removal and restoration plan (the “Plan”). The Company disputes the legality of the purported revocation of the Permit. The Company further disputes any obligation to remove the Bridge at its expense. In particular, representatives of the Company have participated in meetings with the City since August 1, 2019, discussing a collaborative process for the possible removal of the Bridge. Until the recent revocation of the Permit, the City representatives have repeatedly and consistently agreed that the City will pay for the associated costs of any Bridge removal. Nevertheless, without waiving any rights, in an effort to understand all of the available options, and to provide a response to the City’s new directives, the Company has engaged a Project Manager, a structural engineering firm and an architect to advise on the process and for the development of a Plan for the Bridge removal, as well as the reconstruction of the front of the Hilton Hotel. The Plan is currently not expected to be completed until early in 2023. At this time, early estimates of the cost of the Plan exceed $ 2 The Company may be subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company will defend itself vigorously against any such claims. Management does not believe that the impact of such matters will have a material effect on the financial conditions or result of operations when resolved. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS The Company evaluated subsequent events through the date that the accompanying financial statements were issued, and has determined that no material subsequent events exist through the date of this filing. |
BUSINESS AND SIGNIFICANT ACCO_2
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Portsmouth’s primary business was conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”). Effective July 15, 2021, Portsmouth completed the purchase of 100 0.7 Prior to its dissolution effective December 23, 2021, Justice owned and operated 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 through its subsidiaries Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”). Mezzanine was a wholly owned subsidiary of the Partnership; Operating is a wholly owned subsidiary of Mezzanine. Effective December 23, 2021, Portsmouth replaced Justice as the single member 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 a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (“Hilton”) through January 31, 2030. Operating entered into a hotel management agreement (“HMA”) with Aimbridge Hospitality (“Aimbridge”) to manage the Hotel, along with its five-level parking garage, with an effective date of February 3, 2017. The term of the management agreement is for an initial period of ten years automatically renews for successive one (1) year periods, not to exceed five years in the aggregate, subject to certain conditions 1.70% As of June 30, 2022, The InterGroup Corporation (“InterGroup”), a public company, owns approximately 75.0 2.5 67.8 |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and Justice up to its dissolution in December 2021 at which time all subsidiaries of Justice became subsidiaries of Portsmouth as the Company replaced Justice as the single member of Justice’s subsidiaries where appropriate. All significant inter-company transactions and balances have been eliminated. |
Investment in Hotel, Net | Investment in Hotel, Net Property and equipment are stated at cost. Building improvements are depreciated on a straight-line basis over their useful lives ranging from 3 39 3 7 Repairs and maintenance are charged to expense as incurred. Costs of significant renewals and improvements are capitalized and depreciated over the shorter of its remaining estimated useful life or life of the asset. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts; any resulting gain or loss is included in other income (expenses). The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with generally accepted accounting principles (“GAAP”). If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between the assets’ carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. For a depreciable asset, the new cost will be depreciated over the asset’s remaining useful life. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the property. No |
Investment in Marketable Securities | Investment in Marketable Securities Marketable securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. Marketable securities are classified as trading securities with all unrealized gains and losses on the Company’s investment portfolio recorded through the consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased and are carried at cost, which approximates fair value. As of June 30, 2022 and 2021, the Company does no |
Restricted Cash | Restricted Cash Restricted cash is comprised of amounts held by lenders for payment of real estate taxes, insurance, replacement and capital addition reserves for the Hotel. It also includes key money received from Aimbridge that is restricted for capital improvements. |
Accounts Receivable - Hotel, Net | Accounts Receivable - Hotel, Net Accounts receivable from Hotel customers are carried at cost less an allowance for doubtful accounts that is based on management’s assessment of the collectability of accounts receivable. The net accounts receivable balance on July 1, 2020 was $ 251,000 392,000 211,000 15,000 17,000 |
Other Assets | Other Assets Other assets include prepaid insurance, estimated life insurance proceeds, prepaid expenses, other investments, net, and other miscellaneous assets. Other investments include non-marketable securities (carried at cost, net of any impairments loss). The Company has no significant influence or control over the entities that issue these 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. For the years ended June 30, 2022 and 2021, the Company recorded impairment losses related to other investments of $ 20,000 38,000 2,269,000 2,249,000 |
Income Taxes | Income Taxes The Company consolidated Justice (“Hotel”) for financial reporting purposes up to its dissolution in December 2021 and was not taxed on its non-controlling interest in the Hotel. Effective July 15, 2021, the Company become the owner of 100% of Justice and began to include all the Hotel’s income and expense accounts into its income taxes calculations. The income tax expense or benefit during the fiscal years ended June 30, 2022 and 2021, respectively, represent the income tax effect on the Company’s pretax loss which includes its share in the net loss of the Hotel accordingly. Deferred income taxes are calculated under the liability method. Deferred income tax assets and liabilities are based on differences between the financial statement and tax basis of assets and liabilities at the current enacted tax rates. Changes in deferred income tax assets and liabilities are included as a component of income tax expense. Changes in deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets where realization is not likely. We have considered the income tax accounting and disclosure implications of the relief provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020, and the American Rescue Plan Act enacted on March 11, 2021. The effect of tax law changes is required to be recognized either in the interim period in which the legislation is enacted or reflected in the computation of the annual effective tax rate, depending on the nature of the change. As of June 30, 2022 and 2021, we evaluated the income tax provisions of the CARES Act and the American Rescue Plan Act and have determined there to be no material effect on the fiscal years’ tax provision. We will continue to evaluate the income tax provisions of both acts and monitor the tax law changes that could have income tax accounting and disclosure implications. The Company accounts for its uncertain tax positions pursuant to ASC 740, Income Taxes. |
Due to Securities Broker | 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. |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities include trade payables, advance customer deposits, accrued wages, accrued real estate taxes, and other liabilities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting standards for fair value measurement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: Level 1 Level 2 Level 3 |
Revenue Recognition | Revenue Recognition On July 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in Hotel operating expenses in the consolidated statements of operations. Advertising costs were $ 61,000 110,000 |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share Basic loss per share is calculated based upon the weighted average number of common shares outstanding during each fiscal year. As of June 30, 2022 and 2021, the Company did not have any potentially dilutive securities outstanding. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to the recording of allowance for doubtful accounts which are based on management’s assessment of the collectability of accounts receivable, as of the end of the fiscal year. Actual results may differ from those estimates. Management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets and when appropriate, records tax valuation allowances based on that evidence and estimates. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability and are amortized over the life of the debt. Loan amortization costs are included in interest expense in the consolidated statement of operations. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements As of June 30, 2022, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on the Company’s consolidated financial statements. |
LIQUIDITY (Tables)
LIQUIDITY (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Liquidity | |
SCHEDULE OF FINANCIAL OBLIGATIONS INCLUDING INTEREST PAYMENTS | The following table provides a summary as of June 30, 2022, the Company’s material financial obligations which also including interest payments: SCHEDULE OF FINANCIAL OBLIGATIONS INCLUDING INTEREST PAYMENTS Year Year Year Year Year Total 2023 2024 2025 2026 2027 Thereafter Mortgage notes payable $ 109,114,000 $ 1,721,000 $ 107,393,000 $ - $ - $ - $ - Related party notes payable 17,721,000 567,000 14,767,000 567,000 567,000 462,000 791,000 Interest 11,080,000 7,871,000 3,209,000 - - - - Total $ 137,915,000 $ 10,159,000 $ 125,369,000 $ 567,000 $ 567,000 $ 462,000 $ 791,000 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE DISAGGREGATION BY REVENUE STREAMS | The following table present our revenue disaggregated by revenue streams. SCHEDULE OF REVENUE DISAGGREGATION BY REVENUE STREAMS For the year ended June 30, 2022 2021 Hotel revenues: Hotel rooms $ 26,599,000 $ 12,138,000 Food and beverage 1,471,000 293,000 Garage 3,112,000 2,117,000 Other operating departments 352,000 120,000 Total Hotel revenue $ 31,534,000 $ 14,668,000 |
INVESTMENT IN HOTEL, NET (Table
INVESTMENT IN HOTEL, NET (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Investment In Hotel Net | |
SCHEDULE OF INVESTMENT IN HOTEL, NET | Investment in Hotel consisted of the following as of: SCHEDULE OF INVESTMENT IN HOTEL, NET Accumulated Net Book June 30, 2022 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 1,805,000 (922,000 ) 883,000 Furniture and equipment 32,860,000 (28,567,000 ) 4,293,000 Building and improvements 56,274,000 (31,344,000 ) 24,930,000 Investment in Hotel, net $ 92,063,000 $ (60,833,000 ) $ 31,230,000 Accumulated Net Book June 30, 2021 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 1,805,000 (606,000 ) 1,199,000 Furniture and equipment 31,014,000 (27,956,000 ) 3,058,000 Building and improvements 56,194,000 (30,062,000 ) 26,132,000 Investment in Hotel, net $ 90,137,000 $ (58,624,000 ) $ 31,513,000 |
INVESTMENT IN MARKETABLE SECU_2
INVESTMENT IN MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
SCHEDULE OF CHANGES IN UNREALIZED GAINS AND LOSSES ON INVESTMENTS | As of June 30, 2022 and 2021, 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: SCHEDULE OF CHANGES IN UNREALIZED GAINS AND LOSSES ON INVESTMENTS Gross Gross Net Investment Cost Unrealized Gain Unrealized Loss Unrealized Loss Fair As of June 30, 2022 Corporate Equities $ 643,000 $ 42,000 $ (144,000 ) $ (102,000 ) $ 541,000 As of June 30, 2021 Corporate Equities $ 4,987,000 $ 438,000 $ (1,889,000 ) $ (1,451,000 ) $ 3,536,000 |
SCHEDULE OF NET (LOSS) GAIN ON MARKETABLE SECURITIES | Net (loss) gain on marketable securities on the statement of operations is comprised of realized and unrealized losses. Below is the breakdown of the two components for the years ended June 30, 2022 and 2021, respectively. SCHEDULE OF NET (LOSS) GAIN ON MARKETABLE SECURITIES For the year ended June 30, 2022 2021 Realized (loss) gain on marketable securities $ (433,000 ) $ 32,000 Realized loss on marketable securities related to Comstock (2,056,000 ) (572,000 ) Unrealized gain on marketable securities 1,348,000 336,000 Unrealized gain on marketable securities related to Comstock - 1,603,000 Net (loss) gain on marketable securities $ (1,141,000 ) $ 1,399,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS | 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, due to securities broker and obligations for securities sold) or the nature and terms of the obligation (i.e., other notes payable and mortgage notes payable). The assets measured at fair value on a recurring basis are as follows: SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS As of June 30, 2022 Level 1 Assets: Investment in marketable securities: Communication services $ 355,000 REITs and real estate companies 162,000 Basic materials 18,000 Utilities 5,000 Technology 1,000 Investment in marketable securities $ 541,000 As of June 30, 2021 Level 1 Assets: Investment in marketable securities: Communication services $ 1,334,000 Basic materials 720,000 Industrials 653,000 REITs and real estate companies 438,000 Energy 250,000 Healthcare 141,000 Investment in marketable securities $ 3,536,000 |
SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON NONRECURRING BASIS | 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 or adjusted to record the fair value of new instruments received (i.e., preferred shares) in exchange for old instruments (i.e., debt instruments). The following table shows the fair value hierarchy for these assets measured at fair value on a non-recurring basis as follows: SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON NONRECURRING BASIS Assets Level 3 June 30, 2022 Net loss for the Other non-marketable investments $ - $ - $ (20,000 ) Net loss for the Assets Level 3 June 30, 2021 year ended June Other non-marketable investments $ 20,000 $ 20,000 $ (38,000 ) |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER ASSETS | Other assets consist of the following as of June 30: SCHEDULE OF OTHER ASSETS 2022 2021 Inventory - Hotel $ 27,000 $ 37,000 Prepaid expenses 534,000 381,000 Miscellaneous assets 291,000 283,000 Total other assets $ 852,000 $ 701,000 |
RELATED PARTY AND OTHER FINAN_2
RELATED PARTY AND OTHER FINANCING TRANSACTIONS (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Related Party And Other Financing Transactions | |
SCHEDULE OF RELATED PARTY AND OTHER NOTES PAYABLE | The following summarizes the balances of related party and other notes payable as of June 30, 2022 and 2021, respectively. SCHEDULE OF RELATED PARTY AND OTHER NOTES PAYABLE As of June 30, 2022 2021 Note payable - InterGroup $ 14,200,000 $ 6,650,000 Note payable - Hilton 2,375,000 2,692,000 Note payable - Aimbridge 1,146,000 1,396,000 SBA Loan - Justice - 2,000,000 Total related party and other notes payable $ 17,721,000 $ 12,738,000 |
SCHEDULE OF FUTURE MINIMUM PRINCIPAL PAYMENTS | Future minimum principal payments for all related party and other financing transactions are as follows: SCHEDULE OF FUTURE MINIMUM PRINCIPAL PAYMENTS For the year ending June 30, 2023 $ 567,000 2024 14,767,000 2025 567,000 2026 567,000 2027 462,000 Thereafter 791,000 Long term debt $ 17,721,000 |
MORTGAGE NOTES PAYABLE (Tables)
MORTGAGE NOTES PAYABLE (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF MORTGAGES | As of June 30, 2022 and 2021, the Company had the following mortgages: SCHEDULE OF MORTGAGES June 30, 2022 June 30, 2021 Interest Rate Origination Date Maturity Date $ 89,114,000 $ 90,745,000 Fixed 5.28 December 18, 2013 January 1, 2024 20,000,000 20,000,000 Fixed 7.25 July 31, 2019 January 1, 2024 109,114,000 110,745,000 Mortgage notes payable - hotel (367,000 ) (611,000 ) Net debt issuance costs $ 108,747,000 $ 110,134,000 Total mortgage notes payable - hotel |
SCHEDULE OF MORTGAGE NOTES PAYABLE FUTURE MINIMUM PRINCIPLE PAYMENTS | Future minimum principal payments for mortgage notes payable are as follows: SCHEDULE OF MORTGAGE NOTES PAYABLE FUTURE MINIMUM PRINCIPLE PAYMENTS For the year ending June 30, 2023 $ 1,721,000 2024 107,393,000 $ 109,114,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROVISION FOR INCOME TAX (EXPENSE) BENEFIT | The provision for income tax (expense) benefit consists of the following: SCHEDULE OF PROVISION FOR INCOME TAX (EXPENSE) BENEFIT For the years ended June 30, 2022 2021 Federal Current tax expense $ - $ - Deferred tax (expense) benefit (310,000 ) 1,606,000 Federal income tax benefit (310,000 ) 1,606,000 State Current tax (expense)benefit (1,000 ) 65,000 Deferred tax benefit 169,000 475,000 State and local income tax benefit 168,000 540,000 Total income tax (expense) benefit $ (142,000 ) $ 2,146,000 |
SCHEDULE OF STATUTORY FEDERAL INCOME TAX RATE | A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows: SCHEDULE OF STATUTORY FEDERAL INCOME TAX RATE For the years ended June 30, 2022 2021 Statutory federal tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 2.0 % 5.8 % Non-taxable PPP loan 21.7 % - Provision to return adjustment 8.3 % 2.9 % Valuation allowance -236.7 % -4.3 % Deferral True-Up – Justice Basis Diff in FA 180.9 % - Other 0.6 % 3.6 % Effective income tax rate reconciliation percentage -2.2 % 29.0 % |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The components of the Company’s deferred tax assets and (liabilities) as of June 30, 2022 and 2021 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 Deferred tax assets Net operating loss carryforward $ 10,925,000 $ 9,802,000 Investment reserve - 671,000 Interest expense 2,231,000 2,684,000 Accruals and reserves 587,000 - Depreciation 15,646,000 - Other 1,800,000 1,423,000 Deferred tax assets before valuation allowance 31,189,000 14,580,000 Less Valuation allowance (22,775,000 ) (951,000 ) Deferred tax assets after valuation allowance 8,414,000 13,629,000 Deferred tax liabilities Basis difference in Justice - (5,092,000 ) State taxes (503,000 ) (482,000 ) Deferred Tax Liabilities (503,000 ) (5,574,000 ) Net deferred tax assets $ 7,911,000 $ 8,055,000 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT | Information below represents reporting segments for the years ended June 30, 2022 and 2021, respectively. Segment loss from Hotel operations consists of the operation of the Hotel and operation of the garage. Income (loss) from investments consists of net investment gain (loss), dividend and interest income and investment related expenses. SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT As of and for the year Hotel Investment ended June 30, 2022 Operations Transactions Other Total Revenues $ 31,534,000 $ - $ - $ 31,534,000 Segment operating expenses (27,451,000 ) - (1,130,000 ) (28,581,000 ) Segment income (loss) 4,083,000 - (1,130,000 ) 2,953,000 Interest expense - mortgage (6,549,000 ) - - (6,549,000 ) Interest expense – related party (1,375,000 ) - - (1,375,000 ) Gain on debt forgiveness 2,000,000 2,000,000 Depreciation and amortization expense (2,209,000 ) - - (2,209,000 ) Loss from investments - (1,243,000 ) - (1,243,000 ) Income tax expense - - (142,000 ) (142,000 ) Net loss $ (4,050,000 ) $ (1,243,000 ) $ (1,272,000 ) $ (6,565,000 ) Total assets $ 40,810,000 $ 541,000 $ 8,448,000 $ 49,799,000 As of and for the year Hotel Investment ended June 30, 2021 Operations Transactions Other Total Revenues $ 14,668,000 $ - $ - $ 14,668,000 Segment operating expenses (17,911,000 ) - (796,000 ) (18,707,000 ) Segment loss (3,243,000 ) - (796,000 ) (4,039,000 ) Segment income (loss) (3,243,000 ) - (796,000 ) (4,039,000 ) Interest expense – mortgage (6,710,000 ) - - (6,710,000 ) Interest expense – related party (572,000 ) - - (572,000 ) Gain on disposal of asset 12,000 - - 12,000 Gain on debt forgiveness 4,719,000 - - 4,719,000 Gain on debt forgiveness 4,719,000 - - 4,719,000 Depreciation and amortization expense (2,079,000 ) - - (2,079,000 ) Gain from investments - 1,237,000 - 1,237,000 Income (loss) from investments - 1,237,000 - 1,237,000 Income tax benefit - - 2,146,000 2,146,000 Net income (loss) $ (7,873,000 ) $ 1,237,000 $ 1,350,000 $ (5,286,000 ) Total assets $ 40,367,000 $ 3,556,000 $ 8,628,000 $ 52,551,000 |
BUSINESS AND SIGNIFICANT ACCO_3
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jul. 15, 2021 | Feb. 03, 2017 | Jun. 30, 2022 | Jun. 30, 2021 | Jul. 01, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Managment agreement term | 10 years | ||||
Option to extend | automatically renews for successive one (1) year periods, not to exceed five years in the aggregate, subject to certain conditions | ||||
Percentage of management fee payable | 1.70% | ||||
Cash equivalents | $ 0 | $ 0 | |||
Accounts receivable | 392,000 | 211,000 | $ 251,000 | ||
Allowance for doubtful accounts | 15,000 | 17,000 | |||
Impairment losses on other investments | 20,000 | 38,000 | |||
Cumulative impairment losses | 2,269,000 | 2,249,000 | |||
Advertising expense | 61,000 | 110,000 | |||
Hotel [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment losses | $ 0 | $ 0 | |||
Hotel [Member] | Minimum [Member] | Building Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, useful life | 3 years | ||||
Hotel [Member] | Minimum [Member] | Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, useful life | 3 years | ||||
Hotel [Member] | Maximum [Member] | Building Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, useful life | 39 years | ||||
Hotel [Member] | Maximum [Member] | Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, useful life | 7 years | ||||
Santa Fe Financial Corporation [Member] | John V. Winfield [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Ownership percentage | 2.50% | ||||
Santa Fe Financial Corporation [Member] | John V. Winfield [Member] | Inter Group Corporation [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Ownership percentage | 67.80% | ||||
Parent Company [Member] | Inter Group Corporation [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Ownership percentage | 75% | ||||
Justice Investors Limited Partnership [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Subsidiary of limited liability company or limited partnership, ownership interest | 100% | ||||
Remaining non-controlling interest | 0.70% |
SCHEDULE OF FINANCIAL OBLIGATIO
SCHEDULE OF FINANCIAL OBLIGATIONS INCLUDING INTEREST PAYMENTS (Details) | Jun. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
Long-term Debt | $ 109,114,000 |
2023 | 1,721,000 |
2024 | 107,393,000 |
Obligations [Member] | |
Debt Instrument [Line Items] | |
Long-term Debt | 137,915,000 |
2023 | 10,159,000 |
2024 | 125,369,000 |
2025 | 567,000 |
2026 | 567,000 |
2027 | 462,000 |
Thereafter | 791,000 |
Mortgage Notes Payable [Member] | Obligations [Member] | |
Debt Instrument [Line Items] | |
Long-term Debt | 109,114,000 |
2023 | 1,721,000 |
2024 | 107,393,000 |
2025 | |
2026 | |
2027 | |
Thereafter | |
Related Party Notes Payable [Member] | Obligations [Member] | |
Debt Instrument [Line Items] | |
Long-term Debt | 17,721,000 |
2023 | 567,000 |
2024 | 14,767,000 |
2025 | 567,000 |
2026 | 567,000 |
2027 | 462,000 |
Thereafter | 791,000 |
Interest [Member] | Obligations [Member] | |
Debt Instrument [Line Items] | |
Long-term Debt | 11,080,000 |
2023 | 7,871,000 |
2024 | 3,209,000 |
2025 | |
2026 | |
2027 | |
Thereafter |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Feb. 03, 2021 | Dec. 16, 2020 | Apr. 09, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Jan. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net cash used in operating activities | $ 2,761,000 | $ 10,687,000 | |||||
Cash and cash equivalents | 2,662,000 | 2,310,000 | |||||
Restricted cash | 6,226,000 | 6,222,000 | |||||
Marketable securities, net | 411,000 | 1,821,000 | |||||
Proceeds from related party debt | 7,550,000 | 3,650,000 | |||||
Debt interest rate | 5.275% | ||||||
Gain (loss) on extinguishment of debt | 2,000,000 | $ 4,719,000 | |||||
Cares Act [Member] | CIBC Bank USA [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Proceeds from loan | $ 4,719,000 | ||||||
Debt interest rate | 1% | ||||||
Second SBA Loan [Member] | CIBC Bank USA [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Proceeds from loan | $ 2,000,000 | ||||||
Debt interest rate | 1% | ||||||
Debt instrument, maturity date | Feb. 03, 2026 | ||||||
InterGroup Corp [Member] | Hotel Rooms [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Proceeds from related party debt | $ 7,550,000 | ||||||
InterGroup Corp [Member] | Loan Modification Agreement [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Revolving line of credit amount | $ 10,000,000 | $ 16,000,000 | |||||
Line of credit facility, expiration date | Jul. 31, 2021 | Jul. 31, 2023 | |||||
Notes payable | $ 14,200,000 | $ 11,350,000 |
SCHEDULE OF REVENUE DISAGGREGAT
SCHEDULE OF REVENUE DISAGGREGATION BY REVENUE STREAMS (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Hotel revenue | $ 31,534,000 | $ 14,668,000 |
Hotel Rooms [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Hotel revenue | 26,599,000 | 12,138,000 |
Food and Beverage [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Hotel revenue | 1,471,000 | 293,000 |
Garage [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Hotel revenue | 3,112,000 | 2,117,000 |
Other Operating Departments [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Hotel revenue | $ 352,000 | $ 120,000 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 | Jul. 01, 2020 |
Revenue from Contract with Customer [Abstract] | |||
Contract with customer, liability | $ 493,000 | $ 161,000 | $ 375,000 |
SCHEDULE OF INVESTMENT IN HOTEL
SCHEDULE OF INVESTMENT IN HOTEL, NET (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 92,063,000 | $ 90,137,000 |
Accumulated Depreciation | (60,833,000) | (58,624,000) |
Net Book Value | 31,230,000 | 31,513,000 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,124,000 | 1,124,000 |
Accumulated Depreciation | ||
Net Book Value | 1,124,000 | 1,124,000 |
Finance Lease ROU Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,805,000 | 1,805,000 |
Accumulated Depreciation | (922,000) | (606,000) |
Net Book Value | 883,000 | 1,199,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 32,860,000 | 31,014,000 |
Accumulated Depreciation | (28,567,000) | (27,956,000) |
Net Book Value | 4,293,000 | 3,058,000 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 56,274,000 | 56,194,000 |
Accumulated Depreciation | (31,344,000) | (30,062,000) |
Net Book Value | $ 24,930,000 | $ 26,132,000 |
INVESTMENT IN REAL ESTATE (Deta
INVESTMENT IN REAL ESTATE (Details Narrative) - USD ($) | 1 Months Ended | |
Mar. 31, 2021 | Aug. 31, 2007 | |
Inter Group Uluniu Inc [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of voting interests acquired | 50% | 50% |
Business acquisition, purchase price of acquired entity | $ 980,000 | $ 973,000 |
Hawaiian Corporation [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of voting interests acquired | 100% |
SCHEDULE OF CHANGES IN UNREALIZ
SCHEDULE OF CHANGES IN UNREALIZED GAINS AND LOSSES ON INVESTMENTS (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Marketable Securities [Line Items] | ||
Gross Unrealized Gain | $ 1,603,000 | |
Equity Securities [Member] | ||
Marketable Securities [Line Items] | ||
Cost | 643,000 | 4,987,000 |
Gross Unrealized Gain | 42,000 | 438,000 |
Gross Unrealized Loss | (144,000) | (1,889,000) |
Net Unrealized Loss | (102,000) | (1,451,000) |
Fair Value | $ 541,000 | $ 3,536,000 |
SCHEDULE OF NET (LOSS) GAIN ON
SCHEDULE OF NET (LOSS) GAIN ON MARKETABLE SECURITIES (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Realized (loss) gain on marketable securities | $ (433,000) | $ 32,000 |
Realized loss on marketable securities related to Comstock | (2,056,000) | (572,000) |
Unrealized gain on marketable securities | 1,348,000 | 336,000 |
Unrealized gain on marketable securities related to Comstock | 1,603,000 | |
Net (loss) gain on marketable securities | $ (1,141,000) | $ 1,399,000 |
INVESTMENT IN MARKETABLE SECU_3
INVESTMENT IN MARKETABLE SECURITIES (Details Narrative) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Marketable Securities [Line Items] | ||
Investment for marketable securities | $ 541,000 | $ 3,536,000 |
Securities Held for Over One Year [Member] | ||
Marketable Securities [Line Items] | ||
Unrealized losses related to securities | 73,000 | $ 1,873,000 |
Comstock Mining, Inc [Member] | ||
Marketable Securities [Line Items] | ||
Percentage of investment in marketable securities | 19% | |
Investment for marketable securities | $ 0 | $ 1,789,000 |
SCHEDULE OF FAIR VALUE, ASSETS
SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS (Details) - Fair Value, Recurring [Member] - Fair Value, Inputs, Level 1 [Member] - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | $ 541,000 | $ 3,536,000 |
Communication Services [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | 355,000 | 1,334,000 |
REITs and Real Estate Companies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | 162,000 | 438,000 |
Basic Materials [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | 18,000 | 720,000 |
Utilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | 5,000 | |
Technology [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | $ 1,000 | |
Industrials [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | 653,000 | |
Energy [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | 250,000 | |
Health Care [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in marketable securities | $ 141,000 |
SCHEDULE OF FAIR VALUE, ASSET_2
SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON NONRECURRING BASIS (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other non-marketable investments | $ 20,000 | |
Net loss for the period | (20,000) | (38,000) |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other non-marketable investments | $ 20,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | ||
Other non-marketable investments | $ 0 | $ 30,000 |
SCHEDULE OF OTHER ASSETS (Detai
SCHEDULE OF OTHER ASSETS (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventory - Hotel | $ 27,000 | $ 37,000 |
Prepaid expenses | 534,000 | 381,000 |
Miscellaneous assets | 291,000 | 283,000 |
Total other assets | $ 852,000 | $ 701,000 |
SCHEDULE OF RELATED PARTY AND O
SCHEDULE OF RELATED PARTY AND OTHER NOTES PAYABLE (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total related party and other notes payable | $ 17,721,000 | $ 12,738,000 |
Note Payable InterGroup [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total related party and other notes payable | 14,200,000 | 6,650,000 |
Note payable - Hilton [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total related party and other notes payable | 2,375,000 | 2,692,000 |
Note payable - Aimbridge [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total related party and other notes payable | 1,146,000 | 1,396,000 |
SBA Loan Justice [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total related party and other notes payable | $ 2,000,000 |
SCHEDULE OF FUTURE MINIMUM PRIN
SCHEDULE OF FUTURE MINIMUM PRINCIPAL PAYMENTS (Details) | Jun. 30, 2022 USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | $ 1,721,000 |
2024 | 107,393,000 |
Long term debt | 109,114,000 |
Related Party and Other Financing Transaction [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | 567,000 |
2024 | 14,767,000 |
2025 | 567,000 |
2026 | 567,000 |
2027 | 462,000 |
Thereafter | 791,000 |
Long term debt | $ 17,721,000 |
RELATED PARTY AND OTHER FINAN_3
RELATED PARTY AND OTHER FINANCING TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||||
Feb. 03, 2021 | Apr. 09, 2020 | Jul. 31, 2019 | Feb. 01, 2017 | Jul. 02, 2014 | Feb. 28, 2017 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 16, 2020 | May 11, 2017 | Jan. 31, 2017 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate, stated percentage | 5.275% | ||||||||||||
Debt instrument terms | 10 years | ||||||||||||
Debt instrument, maturity date, description | Beginning in February 2017, the loan began to amortize over a thirty-year period through its maturity date of January 2024 | The mezzanine interest only loan had an interest rate of 9.75% per annum and a maturity date of January 1, 2024 | |||||||||||
Key money incentive advance to related party | $ 2,000,000 | ||||||||||||
Debt Instrument amortization period | 8 years | ||||||||||||
Gain on debt extinguishment | $ 2,000,000 | $ 4,719,000 | |||||||||||
Accounts payable to related party | 4,908,000 | 3,193,000 | |||||||||||
Outstanding loan principal amount | 89,114,000 | 90,745,000 | |||||||||||
Prior Mortgage [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Accounts payable to related party | $ 42,940,000 | ||||||||||||
Mortgage Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Accounts payable to related party | $ 97,000,000 | 97,000,000 | |||||||||||
Mezzanine Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Accounts payable to related party | $ 20,000,000 | $ 20,000,000 | |||||||||||
New Mezzanine Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate, stated percentage | 7.25% | ||||||||||||
Debt instrument maturity date | Jan. 01, 2024 | ||||||||||||
Note payable - Hilton [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Notes reduction | $ 317,000 | ||||||||||||
Debt instrument, payment terms | through 2030 | ||||||||||||
Loan Modification Agreement [Member] | InterGroup Corp [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Working capital | $ 16,000,000 | ||||||||||||
Current loan balance | $ 14,200,000 | $ 11,350,000 | |||||||||||
Justice Investors Limited Partnership and Intergroup [Member] | Loan Modification Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | 11,350,000 | $ 10,000,000 | |||||||||||
Current loan balance | 14,200,000 | 6,650,000 | |||||||||||
Amortization of financing costs | $ 0 | $ 0 | |||||||||||
CIBC Bank USA [Member] | Cares Act [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate, stated percentage | 1% | ||||||||||||
Proceeds from Loans | $ 4,719,000 | ||||||||||||
Debt instrument maturity date | Apr. 09, 2022 | ||||||||||||
CIBC Bank USA [Member] | Second SBA Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate, stated percentage | 1% | ||||||||||||
Proceeds from Loans | $ 2,000,000 | ||||||||||||
Debt instrument maturity date | Feb. 03, 2026 | ||||||||||||
Cred Reit Holdco LLC [Member] | New Mezzanine Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 20,000,000 | ||||||||||||
Debt instrument, interest rate, stated percentage | 9.75% | ||||||||||||
Unsecured Debt [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 4,250,000 | ||||||||||||
Debt instrument, interest rate, stated percentage | 12% | ||||||||||||
Debt instrument terms | 2 years | ||||||||||||
Percentage of loan fee received | 3% | ||||||||||||
Debt instrument, maturity date, description | The loan was extended to July 31, 2023 |
SCHEDULE OF MORTGAGES (Details)
SCHEDULE OF MORTGAGES (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jan. 31, 2017 | |
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.275% | ||
Mortgage notes payable - hotel | $ 109,114,000 | $ 110,745,000 | |
Net debt issuance costs | (367,000) | (611,000) | |
Total mortgage notes payable - hotel | 108,747,000 | 110,134,000 | |
Fixed Mortgage Notes Payable Hotel 5.28% [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage notes payable hotel | $ 89,114,000 | 90,745,000 | |
Debt instrument, interest rate, stated percentage | 5.28% | ||
Debt instrument, maturity date range, start | Dec. 18, 2013 | ||
Debt instrument, maturity date range, end | Jan. 01, 2024 | ||
Fixed Mortgage Notes Payable Hotel 7.25% [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage notes payable hotel | $ 20,000,000 | $ 20,000,000 | |
Debt instrument, interest rate, stated percentage | 7.25% | ||
Debt instrument, maturity date range, start | Jul. 31, 2019 | ||
Debt instrument, maturity date range, end | Jan. 01, 2024 |
SCHEDULE OF MORTGAGE NOTES PAYA
SCHEDULE OF MORTGAGE NOTES PAYABLE FUTURE MINIMUM PRINCIPLE PAYMENTS (Details) | Jun. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 1,721,000 |
2024 | 107,393,000 |
Long term debt | $ 109,114,000 |
MORTGAGE NOTES PAYABLE (Details
MORTGAGE NOTES PAYABLE (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2019 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | May 12, 2017 USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||||
Investment in mortgage loans on real estate, interest rate | 5.275% | |||
Investment in mortgage loans on real estate, final maturity date, description | matures in January 2024 | |||
Mortgage loan on real estate final maturity period | 10 years | |||
Debt service coverage ratio description | The DSCR for Operating had been below 1.00 from third quarter of fiscal year 2020 to third quarter of fiscal year 2022 while it is required to maintain a DSCR of at least 1.10 to 1.00 for two consecutive quarters. | |||
Mortgage Loans [Member] | ||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||||
Investment in mortgage loans | $ 97,000,000 | $ 97,000,000 | ||
Guarantor obligations, current carrying value | $ 97,000,000 | |||
Debt service coverage ratio | 1.69 | |||
Mezzanine Loan [Member] | ||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||||
Investment in mortgage loans | $ 20,000,000 | $ 20,000,000 | ||
Investment in mortgage loans on real estate, interest rate | 9.75% | |||
Investment in mortgage loans on real estate, final maturity date | Jan. 01, 2024 | |||
Guarantor obligations, current carrying value | $ 20,000,000 | |||
Debt service coverage ratio | 1.34 | |||
New Mezzanine Loan [Member] | ||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||||
Investment in mortgage loans | $ 20,000,000 | |||
Investment in mortgage loans on real estate, interest rate | 7.25% | |||
Investment in mortgage loans on real estate, final maturity date | Jan. 01, 2024 |
MANAGEMENT AGREEMENTS (Details
MANAGEMENT AGREEMENTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 01, 2017 | Jun. 30, 2022 | Jun. 30, 2021 | |
Management Agreements | |||
Debt instrument terms | 10 years | ||
Key money incentive advance to related party | $ 2,000,000 | ||
Debt Instrument amortization period | 8 years | ||
Accrued interest | $ 0 | ||
Unamortized portion of key money payment | $ 1,146,000 | 1,396,000 | |
Hotel management fees | 1,055,000 | 242,000 | |
Amortization expense | $ 250,000 | $ 250,000 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Concentration Risk [Line Items] | ||
Accounts receivable, net | $ 377,000 | $ 194,000 |
Two Customers [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | Hotel [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 88% | 89% |
Accounts receivable, net | $ 183,000 | $ 64,000 |
SCHEDULE OF PROVISION FOR INCOM
SCHEDULE OF PROVISION FOR INCOME TAX (EXPENSE) BENEFIT (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Current tax expense | ||
Deferred tax (expense) benefit | (310,000) | 1,606,000 |
Federal income tax benefit | (310,000) | 1,606,000 |
Current tax (expense)benefit | (1,000) | 65,000 |
Deferred tax benefit | 169,000 | 475,000 |
State and local income tax benefit | 168,000 | 540,000 |
Total income tax (expense) benefit | $ (142,000) | $ 2,146,000 |
SCHEDULE OF STATUTORY FEDERAL I
SCHEDULE OF STATUTORY FEDERAL INCOME TAX RATE (Details) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax rate | 21% | 21% |
State income taxes, net of federal tax benefit | 2% | 5.80% |
Non-taxable PPP loan | 21.70% | |
Provision to return adjustment | 8.30% | 2.90% |
Valuation allowance | (236.70%) | (4.30%) |
Deferral True-Up – Justice Basis Diff in FA | 180.90% | |
Other | 0.60% | 3.60% |
Effective income tax rate reconciliation percentage | (2.20%) | 29% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 10,925,000 | $ 9,802,000 |
Investment reserve | 671,000 | |
Interest expense | 2,231,000 | 2,684,000 |
Accruals and reserves | 587,000 | |
Depreciation | 15,646,000 | |
Other | 1,800,000 | 1,423,000 |
Deferred tax assets before valuation allowance | 31,189,000 | 14,580,000 |
Less Valuation allowance | (22,775,000) | (951,000) |
Deferred tax assets after valuation allowance | 8,414,000 | 13,629,000 |
Basis difference in Justice | (5,092,000) | |
State taxes | (503,000) | (482,000) |
Deferred Tax Liabilities | (503,000) | (5,574,000) |
Net deferred tax assets | $ 7,911,000 | $ 8,055,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 22,775,000 | $ 951,000 |
Increase in valuation allowance | 21,824,000 | |
Net operating loss carryforwards, federal | 35,011,000 | |
Operating loss carryforwards | $ 10,925,000 | $ 9,802,000 |
Future taxable income percentage | 80% | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, state | $ 40,416,000 | |
2037 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 14,697,000 | |
2017 NOLs [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 20,314,000 |
SCHEDULE OF SEGMENT REPORTING I
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 31,534,000 | $ 14,668,000 |
Segment operating expenses | 28,581,000 | (18,707,000) |
Segment income (loss) | 2,953,000 | (4,039,000) |
Interest expense – mortgage | (6,549,000) | (6,710,000) |
Interest expense – related party | (1,375,000) | (572,000) |
Gain on forgiveness of debt | 2,000,000 | 4,719,000 |
Depreciation and amortization expense | (2,209,000) | (2,079,000) |
Income (loss) from investments | (1,243,000) | 1,237,000 |
Income tax expense | (142,000) | |
Net income (loss) | (6,565,000) | (5,286,000) |
Total assets | 49,799,000 | 52,551,000 |
Gain on disposal of asset | 12,000 | |
Income tax benefit | (142,000) | 2,146,000 |
Hotel Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 31,534,000 | 14,668,000 |
Segment operating expenses | 27,451,000 | (17,911,000) |
Segment income (loss) | 4,083,000 | (3,243,000) |
Interest expense – mortgage | (6,549,000) | (6,710,000) |
Interest expense – related party | (1,375,000) | (572,000) |
Gain on forgiveness of debt | 2,000,000 | 4,719,000 |
Depreciation and amortization expense | (2,209,000) | (2,079,000) |
Income (loss) from investments | ||
Income tax expense | ||
Net income (loss) | (4,050,000) | (7,873,000) |
Total assets | 40,810,000 | 40,367,000 |
Gain on disposal of asset | 12,000 | |
Income tax benefit | ||
Investment Transactions [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Segment operating expenses | ||
Segment income (loss) | ||
Interest expense – mortgage | ||
Interest expense – related party | ||
Gain on forgiveness of debt | ||
Depreciation and amortization expense | ||
Income (loss) from investments | (1,243,000) | 1,237,000 |
Income tax expense | ||
Net income (loss) | (1,243,000) | 1,237,000 |
Total assets | 541,000 | 3,556,000 |
Gain on disposal of asset | ||
Income tax benefit | ||
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Segment operating expenses | 1,130,000 | (796,000) |
Segment income (loss) | (1,130,000) | (796,000) |
Interest expense – mortgage | ||
Interest expense – related party | ||
Gain on forgiveness of debt | ||
Depreciation and amortization expense | ||
Income (loss) from investments | ||
Income tax expense | (142,000) | |
Net income (loss) | (1,272,000) | 1,350,000 |
Total assets | $ 8,448,000 | 8,628,000 |
Gain on disposal of asset | ||
Income tax benefit | $ 2,146,000 |
SEGMENT INFORMATION (Details Na
SEGMENT INFORMATION (Details Narrative) | 12 Months Ended |
Jun. 30, 2022 Segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 16, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
InterGroup Corp [Member] | ||||
Related Party Transaction [Line Items] | ||||
Costs and expenses, related party | $ 144,000 | $ 96,000 | ||
Loan Modification Agreement [Member] | InterGroup Corp [Member] | ||||
Related Party Transaction [Line Items] | ||||
Line of credit facility maximum borrowing capacity | $ 10,000,000 | $ 16,000,000 | ||
Line of credit facility, expiration date | Jul. 31, 2021 | Jul. 31, 2023 | ||
Balance of loans | $ 14,200,000 | $ 6,650,000 | ||
Justice Investors Limited Partnership and Intergroup [Member] | Loan Modification Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument, face amount | $ 11,350,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Service fees | $ 2,107,000 | $ 703,000 | |
Cost of damages value | $ 2,000,000 | ||
Franchise License Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
License agreement period | 15 years |