10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2015

or

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

For the transition period from _______ to_________

Commission File Number 1-10324

THE INTERGROUP CORPORATION

(Exact name of registrant as specified in its charter)

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

10940 Wilshire Blvd., Suite 2150, Los Angeles, California 90024

(Address of principal executive offices) (Zip Code)

(310) 889-2500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                      x Yes ¨ No

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

x Yes ¨ No

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

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

¨ Yes x No

The number of shares outstanding of registrant’s Common Stock, as of January 8, 2016 was 2,383,689.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Consolidated Balance Sheets as of December 31, 2015 (Unaudited) and June 30, 2015	3
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months ended December 31, 2015 and 2014	4
	Condensed Consolidated Statements of Operations (Unaudited) for the Six Months ended December 31, 2015 and 2014	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six months ended December 31, 2015 and 2014	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 4.	Controls and Procedures.	23
PART II – OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6.	Exhibits.	25
Signatures		25

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PART I

FINANCIAL INFORMATION

Item 1 - Condensed Consolidated Financial Statements

THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

As of	December 31, 2015			June 30, 2015
	(Unaudited)
ASSETS
Investment in Hotel, net	$	45,096,000		$	43,840,000
Investment in real estate, net		57,193,000			55,768,000
Investment in marketable securities		16,005,000			5,827,000
Other investments, net		1,415,000			15,082,000
Cash and cash equivalents		5,079,000			8,529,000
Restricted cash - mortgage impounds		2,937,000			2,868,000
Other assets, net		6,537,000			11,505,000
Deferred income taxes		1,917,000			-
Total assets	$	136,179,000		$	143,419,000
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Accounts payable and other liabilities	$	3,497,000		$	5,268,000
Accounts payable and other liabilities - Hotel		12,280,000			13,615,000
Due to securities broker		1,552,000			345,000
Obligations for securities sold		-			22,000
Other notes payable		4,643,000			4,905,000
Mortgage notes payable - Hotel		117,000,000			117,000,000
Mortgage notes payable - real estate		65,541,000			66,233,000
Deferred income taxes		-			3,000
Total liabilities		204,513,000			207,391,000
Commitments and contingencies
Shareholders' deficit:
Preferred stock, $.01 par value, 100,000 shares authorized; none issued		-			-
Common stock, $.01 par value, 4,000,000 shares authorized; 3,395,616 and 3,391,096 issued; 2,383,689 and 2,386,029 outstanding, respectively		33,000			33,000
Additional paid-in capital		10,532,000			10,494,000
Accumulated deficit		(40,285,000	)		(36,459,000	)
Treasury stock, at cost, 1,011,927 and 1,005,067 shares		(12,033,000	)		(11,878,000	)
Total InterGroup shareholders' deficit		(41,753,000	)		(37,810,000	)
Noncontrolling interest		(26,581,000	)		(26,162,000	)
Total shareholders' deficit		(68,334,000	)		(63,972,000	)
Total liabilities and shareholders' equity	$	136,179,000		$	143,419,000

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

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THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the three months ended December 31,	2015			2014
Revenues:
Hotel	$	13,713,000		$	14,044,000
Real estate		3,546,000			4,030,000
Total revenues		17,259,000			18,074,000
Costs and operating expenses:
Hotel operating expenses		(11,969,000	)		(12,033,000	)
Real estate operating expenses		(1,715,000	)		(2,192,000	)
Depreciation and amortization expense		(1,285,000	)		(1,232,000	)
General and administrative expense		(585,000	)		(960,000	)
Total costs and operating expenses		(15,554,000	)		(16,417,000	)
Income from operations		1,705,000			1,657,000
Other income (expense):
Interest expense - mortgages		(2,461,000	)		(2,517,000	)
Disposal of other assets		-			(51,000	)
Gain on sale of real estate		-			1,742,000
Net loss on marketable securities		(6,356,000	)		(1,544,000	)
Net unrealized (loss) gain on other investments		(53,000	)		16,000
Impairment loss on other investments		(287,000	)		-
Dividend and interest income		6,000			503,000
Trading and margin interest expense		(222,000	)		(431,000	)
Other expense, net		(9,373,000	)		(2,282,000	)
Loss before income taxes		(7,668,000	)		(625,000	)
Income tax benefit		2,538,000			17,000
Net loss		(5,130,000	)		(608,000	)
Less:  Net loss attributable to the noncontrolling interest		835,000			319,000
Net loss attributable to InterGroup	$	(4,295,000	)	$	(289,000	)
Basic and diluted net loss per share	$	(2.15	)	$	(0.25	)
Basic and diluted net loss per share attributable to InterGroup	$	(1.80	)	$	(0.12	)
Weighted average number of basic and diluted common shares outstanding		2,384,272			2,385,955

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

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THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the six months ended December 31,	2015			2014
Revenues:
Hotel	$	28,851,000		$	28,874,000
Real estate		7,128,000			8,227,000
Total revenues		35,979,000			37,101,000
Costs and operating expenses:
Hotel operating expenses		(23,162,000	)		(23,871,000	)
Real estate operating expenses		(3,451,000	)		(4,332,000	)
Depreciation and amortization expense		(2,521,000	)		(2,458,000	)
General and administrative expense		(1,394,000	)		(1,741,000	)
Total costs and operating expenses		(30,528,000	)		(32,402,000	)
Income from operations		5,451,000			4,699,000
Other income (expense):
Interest expense - mortgages		(4,925,000	)		(5,175,000	)
Disposal of other assets		(30,000	)		(51,000	)
Gain on sale of real estate		-			1,742,000
Other real estate gain		-			458,000
Net loss on marketable securities		(5,976,000	)		(3,034,000	)
Net unrealized loss on other investments		(127,000	)		(26,000	)
Impairment loss on other investments		(287,000	)		-
Dividend and interest income		19,000			517,000
Trading and margin interest expense		(462,000	)		(900,000	)
Other expense, net		(11,788,000	)		(6,469,000	)
Loss before income taxes		(6,337,000	)		(1,770,000	)
Income tax benefit		1,920,000			258,000
Net loss		(4,417,000	)		(1,512,000	)
Less:  Net loss attributable to the noncontrolling interest		591,000			460,000
Net loss attributable to InterGroup	$	(3,826,000	)	$	(1,052,000	)
Basic and diluted net loss per share	$	(1.85	)	$	(0.63	)
Basic and diluted net loss per share attributable to InterGroup	$	(1.60	)	$	(0.44	)
Weighted average number of basic and diluted common shares outstanding		2,385,784			2,386,051

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

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THE INTERGROUP CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the six months ended December 31,	2015			2014
Cash flows from operating activities:
Net loss	$	(4,417,000	)	$	(1,512,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,521,000			2,458,000
Loss on disposal of assets		30,000			51,000
Gain on sale of real estate		-			(1,742,000	)
Net unrealized loss on marketable securities		5,519,000			3,106,000
Unrealized loss on other investments		127,000			26,000
Impairment loss on other investments		287,000			-
Stock compensation expense		330,000			552,000
Changes in assets and liabilities:
Investment in marketable securities		(2,444,000	)		(3,612,000	)
Other assets		5,063,000			12,000
Accounts payable and other liabilities		(3,106,000	)		(3,765,000	)
Due to securities broker		1,207,000			1,954,000
Obligations for securities sold		(22,000	)		397,000
Deferred taxes		(1,920,000	)		(258,000	)
Net cash provided by (used in) operating activities		3,175,000			(2,333,000	)
Cash flows from investing activities:
Net proceeds from sale of real estate		-			3,288,000
Investment in hotel, net		(2,902,000	)		(2,916,000	)
Investment in real estate, net		(2,425,000	)		(331,000	)
Investment in Santa Fe		(120,000	)		(68,000	)
Investment in Portsmouth		-			(33,000	)
Net cash used in investing activities		(5,447,000	)		(60,000	)
Cash flows from financing activities:
Restricted cash - (payments to) withdrawal of mortgage impounds		(69,000	)		360,000
Net payments on mortgage and other notes payable		(954,000	)		(1,463,000	)
Purchase of treasury stock		(155,000	)		(56,000	)
Net cash used in financing activities		(1,178,000	)		(1,159,000	)
Net decrease in cash and cash equivalents		(3,450,000	)		(3,552,000	)
Cash and cash equivalents at the beginning of the period		8,529,000			4,705,000
Cash and cash equivalents at the end of the period	$	5,079,000		$	1,153,000
Supplemental information:
Interest paid	$	5,132,000		$	5,471,000
Non-cash transaction:
Conversion of other investments to marketable securities	$	13,231,000		$	-

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

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THE INTERGROUP CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have been prepared by The InterGroup Corporation (“InterGroup” or the “Company”), without audit, according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures that are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all adjustments (which included only normal recurring adjustments) necessary for a fair statement of the financial position, cash flows and results of operations as of and for the periods indicated. It is suggested that these financial statements be read in conjunction with the audited financial statements of InterGroup and the notes therein included in the Company's Annual Report on Form 10-K for the year ended June 30, 2015. The June 30, 2015 Condensed Consolidated Balance Sheet was derived from the Company’s Form 10-K for the year ended June 30, 2015.

The results of operations for the three and six months ended December 31, 2015 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2016.

For the three and six months ended December 31, 2015 and 2014, the Company had no components of comprehensive income other than net loss itself.

Basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. The computation of diluted income per share is similar to the computation of basic earnings per share except that the weighted-average number of common shares is increased to include the number of additional common shares that would have been outstanding if potential dilutive common shares had been issued. The Company's only potentially dilutive common shares are stock options. For the three and six months ended December 31, 2015 and 2014, the Company did not have diluted earnings per share as the Company had a net loss for the respective periods.

As of December 31, 2015, the Company had the power to vote 85.6% of the voting shares of Santa Fe Financial Corporation (“Santa Fe”), a public company (OTCBB: SFEF). This percentage includes the power to vote an approximately 4% interest in the common stock in Santa Fe owned by the Company’s Chairman and President pursuant to a voting trust agreement entered into on June 30, 1998.

Santa Fe’s primary business is conducted through the management of its 68.8% owned subsidiary, Portsmouth Square, Inc. (“Portsmouth”), a public company (OTCBB: PRSI). Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors, a California limited partnership (“Justice” or the “Partnership”). Portsmouth controls approximately 93% of the voting interest in Justice and is the sole general partner. InterGroup also directly owns approximately 13.1% of the common stock of Portsmouth. The financial statements of Justice are consolidated with those of the Company.

Justice, through its subsidiaries Justice Holdings Company, LLC (“Holdings”), a Delaware limited liability Company, Justice Operating Company, LLC (“Operating”) , a Delaware limited liability Company, and Justice Mezzanine Company, LLC (“Mezzanine”) , a Delaware limited liability Company, owns a 543-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. Holdings and Mezzanine are both wholly-owned subsidiaries of the Partnership; Operating is a wholly-owned subsidiary of Mezzanine. Mezzanine is the mezzanine borrower under certain indebtedness of Justice, and in December 2013, the Partnership conveyed ownership of the Hotel to Operating. See Recent Business Developments – Limited Partnership Redemption and Restructuring. The Hotel is operated by the Partnership as a full service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (Hilton) . Justice also has entered into a Management Agreement with Prism Hospitality L.P. (“Prism”) to perform management functions for the Hotel. The management agreement with Prism had an original term of ten years and can be terminated at any time with or without cause by the Partnership owner. Effective January 2014, the management agreement with Prism was amended by the Partnership. The Owner and Manager desire to amend and restate the Existing Management Agreement to change the nature of the services provided by Manager and its compensation, among other things. Effective December 1, 2013, GMP Management, Inc., a company owned by a Justice limited partner and related party, also provides management services for the Partnership pursuant to a Management Services Agreement, which is for a term of 3 years, but which can be terminated earlier by the Partnership for cause.

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Management believes that the revenues expected to be generated from the operations of the hotel, garage and leases will be sufficient to meet all of the Partnership’s current and future obligations and financial requirements. Management also believes that there is significant value in the Hotel to support additional borrowings, if necessary.

In addition to the operations of the Hotel, the Company also generates income from the ownership of real estate. Properties include sixteen apartment complexes, one commercial real estate, and three single-family houses as strategic investments. The properties are located throughout the United States, but are concentrated in Texas and Southern California. The Company also has investments in unimproved real property.

Recently Issued Accounting Pronouncements

In November 2015, FASB issued Accounting Standards Update 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, which is intended to improve how deferred taxes are classified on organizations’ balance sheets by eliminating the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred

tax assets and liabilities as noncurrent. The changes are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, which means the first quarter of the Company’s fiscal year 2018. We are currently reviewing the ASU and assessing the potential impact on the consolidated financial statements.

In July 2015, the FASB issued Accounting Standard Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11") which requires entities to measure most inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for annual and interim periods beginning after December 15, 2016. Though permitted, the Company does not plan to early adopt. We are currently evaluating the impact ASU 2015-11 will have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and early application is permitted. We are in the process of evaluating this guidance.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015 and for interim periods within those fiscal years, early application is permitted. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. We are in the process of evaluating this guidance and our method of adoption.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)(“ASU 2014-08”). The amendments in ASU 2014-08 provide guidance for the recognition of discontinued operations, change the requirements for reporting discontinued operations in ASC 205-20, “Discontinued Operations” (“ASC 205-20”) and require additional disclosures about discontinued operations. ASU 2014-08 is effective for the Company for annual periods beginning after December 15, 2014. The Company adopted this standard in the quarter ended September 30, 2015 and it did not have an impact on its consolidated financial statements as it relates primarily to how items are presented in the financial statements.

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company does not plan to early adopt. We are currently evaluating the impact ASU 2014-09 will have on the Company's consolidated financial statements.

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In August 2014, the FASB issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements — Going Concern ("ASU 2014-15"). The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Though permitted, the Company does not plan to early adopt. The Company does not believe that this standard will have a significant impact on its consolidated financial statements.

NOTE 2 – INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

			Accumulated			Net Book
December 31, 2015	Cost		Depreciation			Value
Land	$	2,738,000	$	-		$	2,738,000
Furniture and equipment		26,704,000		(22,344,000	)		4,360,000
Building and improvements		63,917,000		(25,919,000	)		37,998,000
	$	93,359,000	$	(48,263,000	)	$	45,096,000

			Accumulated			Net Book
June 30, 2015	Cost		Depreciation			Value
Land	$	2,738,000	$	-		$	2,738,000
Furniture and equipment		25,958,000		(21,603,000	)		4,355,000
Building and improvements		62,031,000		(25,284,000	)		36,747,000
	$	90,727,000	$	(46,887,000	)	$	43,840,000

NOTE 3 – INVESTMENT IN REAL ESTATE

Investment in real estate consisted of the following:

As of	December 31, 2015			June 30, 2015
Land	$	24,828,000		$	23,453,000
Buildings, improvements and equipment		65,878,000			64,828,000
Accumulated depreciation		(33,513,000	)		(32,513,000	)
Investment in real estate, net	$	57,193,000		$	55,768,000

In July 2015, the Company purchased a residential house in Los Angeles, California as a strategic asset for $1,975,000 in cash.

NOTE 4 – INVESTMENT IN MARKETABLE SECURITIES

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

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At December 31, 2015 and June 30, 2015, all of the Company’s marketable securities are classified as trading securities. The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:

			Gross		Gross			Net			Fair
Investment	Cost		Unrealized Gain		Unrealized Loss			Unrealized Gain (Loss)			Value
As of December 31, 2015
Corporate
Equities	$	23,542,000	$	724,000	$	(8,261,000	)	$	(7,537,000	)	$	16,005,000
As of June 30, 2015
Corporate
Equities	$	7,845,000	$	1,136,000	$	(3,154,000	)	$	(2,018,000	)	$	5,827,000

As of December 31, 2015 and June 30, 2015, the Company had unrealized losses of $3,395,000 and $3,062,000, respectively, related to securities held for over one year.

As of December 31, 2015, approximately 66% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining, Inc.

Net loss on marketable securities on the statement of operations is comprised of realized and unrealized gains (losses). Below is the composition of the two components for the respective periods:

For the three months ended December 31,	2015			2014
Realized loss on marketable securities	$	(397,000	)	$	(83,000	)
Unrealized loss on marketable securities		(5,959,000	)		(1,461,000	)
Net loss on marketable securities	$	(6,356,000	)	$	(1,544,000	)
For the six months ended December 31,		2015			2014
Realized (loss) gain on marketable securities	$	(457,000	)	$	72,000
Unrealized loss on marketable securities		(5,519,000	)		(3,106,000	)
Net loss on marketable securities	$	(5,976,000	)	$	(3,034,000	)

NOTE 5 – OTHER INVESTMENTS, NET

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

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Other investments, net consist of the following:

Type	December 31, 2015		June 30, 2015
Preferred stock - Comstock, at cost	$	-	$	13,231,000
Private equity hedge fund, at cost		1,144,000		1,250,000
Other preferred stock, at cost		255,000		497,000
Warrants - at fair value		16,000		104,000
	$	1,415,000	$	15,082,000

As of June 30, 2015, the Company had $13,231,000 (13,231 preferred shares) held in Comstock Mining, Inc. (“Comstock” – OTCBB: LODE) 7 1/2% Series A-1 Convertible Preferred Stock (the “A-1 Preferred”). On August 27, 2015, all of such preferred stock was converted into common stock of Comstock. Such shares are now included on the balance sheet under “Investment in marketable securities”.

NOTE 6 - FAIR VALUE MEASUREMENTS

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

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

As of December 31, 2015	Level 1		Level 2		Level 3		Total
Assets:
Other investments - warrants	$	-	$	-	$	16,000	$	16,000
Investment in marketable securities:
Basic materials		10,938,000		-		-		10,938,000
Oil, gas and energy		1,769,000		-		-		1,769,000
Other		3,298,000		-		-		3,298,000
		16,005,000		-		-		16,005,000
	$	16,005,000	$	-	$	16,000	$	16,021,000

As of June 30, 2015	Level 1		Level 2		Level 3		Total
Assets:
Other investments - warrants	$	-	$	-	$	104,000	$	104,000
Investment in marketable securities:
Basic materials		2,761,000		-		-		2,761,000
Other		3,066,000		-		-		3,066,000
		5,827,000		-		-		5,827,000
	$	5,827,000	$	-	$	104,000	$	5,931,000

The fair values of investments in marketable securities are determined by the most recently traded price of each security at the balance sheet date. The fair value of the warrants was determined based upon a Black-Scholes option valuation model.

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:

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									Net loss for the six months
Assets	Level 1		Level 2		Level 3		December 31, 2015		ended December 31, 2015
Other non-marketable investments	$	-	$	-	$	1,399,000	$	1,399,000	$	(287,000	)

									Net loss for the six months
Assets	Level 1		Level 2		Level 3		June 30, 2015		ended December 31, 2014
Other non-marketable investments	$	-	$	-	$	14,978,000	$	14,978,000	$	-

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 and holds less than 20% ownership in each of the investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value.

NOTE 7 – STOCK BASED COMPENSATION PLANS

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

Please refer to Note 16 – Stock Based Compensation Plans in the Company's Form 10-K for the year ended June 30, 2015 for more detail information on the Company’s stock-based compensation plans.

During the three months ended December 31, 2015 and 2014, the Company recorded stock option compensation cost of $123,000 and $227,000, respectively, related to stock options that were previously issued. During the six months ended December 31, 2015 and 2014, the Company recorded stock option compensation cost of $242,000 and $464,000, respectively, related to stock options that were previously issued. As of December 31, 2015, there was a total of $508,000 of unamortized compensation related to stock options which is expected to be recognized over the weighted-average period of 3 years.

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

The following table summarizes the stock options activity from July 1, 2014 through December 31, 2015:

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		Number of			Weighted Average		Weighted Average	Aggregate
		Shares			Exercise Price		Remaining Life	Intrinsic Value
Oustanding at	July 1, 2014		367,000		$	16.85	7.71 years	$	953,000
Granted			-			-
Exercised			(2,400	)		18.00
Forfeited			(5,000	)		24.92
Exchanged			(9,600	)		18.00
Oustanding at	June 30, 2015		350,000		$	16.70	6.95 years	$	939,000
Exercisable at	June 30, 2015		126,639		$	12.06	6.46 years	$	939,000
Vested and Expected to vest at	June 30, 2015		350,000		$	16.70	6.95 years	$	939,000
Oustanding at	July 1, 2015		350,000		$	16.70	6.95 years	$	939,000
Granted			-			-
Exercised			-			-
Forfeited			-			-
Exchanged			-			-
Oustanding at	December 31, 2015		350,000		$	16.70	6.44 years	$	3,078,000
Exercisable at	December 31, 2015		218,000		$	15.19	5.80 years	$	2,246,000
Vested and Expected to vest at	December 31, 2015		350,000		$	16.70	6.44 years	$	3,078,000

On July 1 of every year, as part of the Stock Compensation Plan for Non-employee Directors, each non-employee director received an automatic grant of a number of shares of Company’s Common Stock equal in value to $22,000 ($88,000 total recorded as stock compensation expense for the six months ended December 31, 2015 and 2014) based on 100% of the fair market value of the Company’s stock on the day of grant. The four non-employee directors of the Company received a total grant of 4,520 and 4,608 shares of common stock on July 1, 2015.

NOTE 8 – SEGMENT INFORMATION

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

Information below represents reported segments for the three and six months ended December 31, 2015 and 2014. Operating income (loss) from hotel operations consist of the operation of the hotel and operation of the garage. Operating income for rental properties consist of rental income. Operating income (loss) for investment transactions consist of net investment gain (loss), impairment loss on other investments, net unrealized gain (loss) on other investments, dividend and interest income and trading and margin interest expense.

-13-

As of and for the three months	Hotel			Real Estate			Investment
ended December 31, 2015	Operations			Operations			Transactions			Other			Total
Revenues	$	13,713,000		$	3,546,000		$	-		$	-		$	17,259,000
Segment operating expenses		(11,969,000	)		(1,715,000	)		-			(585,000	)		(14,269,000	)
Segment income (loss) from operations		1,744,000			1,831,000			-			(585,000	)		2,990,000
Interest expense - mortgage		(1,813,000	)		(648,000	)		-			-			(2,461,000	)
Depreciation and amortization expense		(759,000	)		(526,000	)		-			-			(1,285,000	)
Loss from investments		-			-			(6,912,000	)		-			(6,912,000	)
Income tax benefit		-			-			-			2,538,000			2,538,000
Net income (loss)	$	(828,000	)	$	657,000		$	(6,912,000	)	$	1,953,000		$	(5,130,000	)
Total assets	$	50,664,000		$	57,193,000		$	17,420,000		$	10,902,000		$	136,179,000

As of and for the three months	Hotel			Real Estate			Investment
ended December 31, 2014	Operations			Operations			Transactions			Other			Total
Revenues	$	14,044,000		$	4,030,000		$	-		$	-		$	18,074,000
Segment operating expenses		(12,033,000	)		(2,192,000	)		-			(960,000	)		(15,185,000	)
Segment income (loss) from operations		2,011,000			1,838,000			-			(960,000	)		2,889,000
Interest expense - mortgage		(1,769,000	)		(748,000	)		-			-			(2,517,000	)
Loss on disposal of assets		(51,000	)		-			-			-			(51,000	)
Gain on sale of real estate		-			1,742,000			-			-			1,742,000
Depreciation and amortization expense		(714,000	)		(518,000	)		-			-			(1,232,000	)
Loss from investments		-			-			(1,456,000	)		-			(1,456,000	)
Income tax benefit		-			-			-			17,000			17,000
Net income (loss)	$	(523,000	)	$	2,314,000		$	(1,456,000	)	$	(943,000	)	$	(608,000	)
Total assets	$	51,234,000		$	61,429,000		$	27,737,000		$	6,250,000		$	146,650,000

As of and for the six months	Hotel			Real Estate			Investment
ended December 31, 2015	Operations			Operations			Transactions			Other			Total
Revenues	$	28,851,000		$	7,128,000		$	-		$	-		$	35,979,000
Segment operating expenses		(23,162,000	)		(3,451,000	)		-			(1,394,000	)		(28,007,000	)
Segment income (loss) from operations		5,689,000			3,677,000			-			(1,394,000	)		7,972,000
Interest expense - mortgage		(3,627,000	)		(1,298,000	)		-			-			(4,925,000	)
Loss on disposal of assets		(30,000	)		-			-			-			(30,000	)
Depreciation and amortization expense		(1,521,000	)		(1,000,000	)		-			-			(2,521,000	)
Loss from investments		-			-			(6,833,000	)		-			(6,833,000	)
Income tax benefit		-			-			-			1,920,000			1,920,000
Net income (loss)	$	511,000		$	1,379,000		$	(6,833,000	)	$	526,000		$	(4,417,000	)
Total assets	$	50,664,000		$	57,193,000		$	17,420,000		$	10,902,000		$	136,179,000

As of and for the six months	Hotel			Real Estate			Investment
ended December 31, 2014	Operations			Operations			Transactions			Other			Total
Revenues	$	28,874,000		$	8,227,000		$	-		$	-		$	37,101,000
Segment operating expenses		(23,871,000	)		(4,332,000	)		-			(1,741,000	)		(29,944,000	)
Segment income (loss) from operations		5,003,000			3,895,000			-			(1,741,000	)		7,157,000
Interest expense - mortgage		(3,665,000	)		(1,510,000	)		-			-			(5,175,000	)
Loss on disposal of assets		(51,000	)		-			-			-			(51,000	)
Gain on sale of real estate		-			1,742,000			-			-			1,742,000
Other real estate income		-			458,000			-			-			458,000
Depreciation and amortization expense		(1,405,000	)		(1,053,000	)		-			-			(2,458,000	)
Loss from investments		-			-			(3,443,000	)		-			(3,443,000	)
Income tax benefit		-			-			-			258,000			258,000
Net income (loss)	$	(118,000	)	$	3,532,000		$	(3,443,000	)	$	(1,483,000	)	$	(1,512,000	)
Total assets	$	51,234,000		$	61,429,000		$	27,737,000		$	6,250,000		$	146,650,000

NOTE 9 – RELATED PARTY TRANSACTIONS

On July 2, 2014, the Partnership obtained from the InterGroup Corporation (parent company of Portsmouth) an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The loan was eliminated in consolidation.

During the three months ended December 31, 2015 and 2014, the Company received management fees from Justice Investors totaling $137,000 and $140,000, respectively. During the six months ended December 31, 2015 and 2014, the Company received management fees from Justice Investors totaling $300,000 and $281,000, respectively.

These fees are eliminated in consolidation.

In connection with the redemption of limited partnership interests of Justice Investors, Limited Partnership (which took place during fiscal year ended June 30, 2014), Justice Operating Company, LLC agreed to pay a total of $1,550,000 in fees to certain officers and directors of the Company for services rendered in connection with the redemption of partnership interests, refinancing of Justice’s properties and reorganization of Justice Investors. This agreement was superseded by a letter dated December 11, 2013 from Justice Investors, Limited Partnership, in which Justice Investors Limited Partnership assumed the payment obligations of Justice Operating Company, LLC. The first payment under this agreement was made concurrently with the closing of the loan agreements, with the remaining payments due upon Justice Investor’s having adequate available cash as described in the letter. As of December 31, 2015, $400,000 of these fees remains outstanding.

-14-

Four of the Portsmouth directors serve as directors of InterGroup. Three of those directors also serve as directors of Santa Fe. The three Santa Fe directors also serve as directors of InterGroup.

John V. Winfield serves as Chief Executive Officer and Chairman of the Company, Portsmouth and Santa Fe. Depending on certain market conditions and various risk factors, the Chief Executive Officer, Portsmouth and Santa Fe may, at times, invest in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of the Chief Executive Officer and the resources of Portsmouth and Santa Fe, at risk in connection with investment decisions made on behalf of the Company.

-15-

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

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

The Company may from time to time make forward-looking statements and projections concerning future expectations. When used in this discussion, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “could,” “might” and similar expressions, are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties, such as national and worldwide economic conditions, including the impact of recessionary conditions on tourism, travel and the lodging industry, the impact of terrorism and war on the national and international economies, including tourism and securities markets, energy and fuel costs, natural disasters, general economic conditions and competition in the hotel industry in the San Francisco area, seasonality, labor relations and labor disruptions, actual and threatened pandemics such as swine flu, partnership distributions, the ability to obtain financing at favorable interest rates and terms, securities markets, regulatory factors, litigation and other factors discussed below in this Report and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015, that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

As of December 31, 2015, the Company owned approximately 81.7% of the common shares of its subsidiary, Santa Fe and Santa Fe owned approximately 68.8% of the common shares of Portsmouth Square, Inc. InterGroup also directly owns approximately 13.1% of the common shares of Portsmouth. The Company's principal sources of revenue continue to be derived from the general and limited partnership interests of its subsidiary, Portsmouth, in the Justice Investors limited partnership (“Justice” or the “Partnership”), rental income from its investments in multi-family real estate properties and income received from investment of its cash and securities assets. Justice owns a 543 room hotel property located at 750 Kearny Street, San Francisco, California 94108, known as the “Hilton San Francisco Financial District” (the “Hotel”) and related facilities, including a five-level underground parking garage. The financial statements of Justice have been consolidated with those of the Company.

The Hotel is operated by the Partnership as a full service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (Hilton). The Partnership entered into a Franchise License agreement with the HLT Franchise Holding LLC (Hilton) on December 10, 2004. The term of the License agreement was for an initial period of 15 years commencing on the opening date, with an option to extend the license agreement for another five years, subject to certain conditions. On June 26, 2015, the Partnership and Hilton entered into an amended franchise agreement which extended the franchise agreement through 2030, modified the monthly royalty rate, extended geographic protection to the Partnership and also provided the Partnership certain key money cash incentives to be earned through 2030. The key money cash incentives were received on July 1, 2015 and are included in accounts receivable at June 30, 2015.

Justice also has a Management Agreement with Prism Hospitality L.P. (“Prism”) to perform management functions for the Hotel. The management agreement with Prism had an original term of ten years and can be terminated at any time with or without cause by the Partnership owner. Effective January 2014, the management agreement with Prism was amended by the Partnership. Effective December 1, 2013, GMP Management, Inc., a company owned by a Justice limited partner and related party, also provides management services for the Partnership pursuant to a Management Services Agreement, which is for a term of 3 years, but which can be terminated earlier by the Partnership for cause.

The parking garage that is part of the Hotel property is managed by Ace Parking pursuant to a contract with the Partnership. Portsmouth also receives management fees as a general partner of Justice for its services in overseeing and managing the Partnership’s assets. Those fees are eliminated in consolidation.

In addition to the operations of the Hotel, the Company also generates income from the ownership and management of real estate. Properties include sixteen apartment complexes, one commercial real estate property, and three single-family houses as strategic investments. The properties are located throughout the United States, but are concentrated in Texas and Southern California. The Company also has an investment in unimproved real property. As of December 31, 2015, all of the Company’s properties are managed in-house.

-16-

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

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

The Company had a net loss of $5,130,000 for the three months ended December 31, 2015 compared to a net loss of $608,000 for the three months ended December 31, 2014. The increase in the net loss is primarily attributable to the higher net loss on marketable securities primarily as the result of the decrease in the market value of the Company’s holdings in common stock of Comstock Mining, Inc., offset by the gain on the sale of real estate recognized during the three months ended December 31, 2014.

The Company had a net loss from hotel operations of $828,000 for the three months ended December 31, 2015 compared to a net loss of $523,000 for the three months ended December 31, 2014. Hotel revenues decreased during the current quarter, while operating expenses also decreased by a lower percentage relative to the decrease in revenues.

The following table sets forth a more detailed presentation of Hotel operations for the three months ended December 31, 2015 and 2014.

For the three months ended December 31,	2015			2014
Hotel revenues:
Hotel rooms	$	10,796,000		$	10,916,000
Food and beverage		1,858,000			2,073,000
Garage		674,000			721,000
Other operating departments		385,000			334,000
Total hotel revenues		13,713,000			14,044,000
Operating expenses, excluding loss on disposal of assets, depreciation and amortization		(11,969,000	)		(12,033,000	)
Operating income before loss on disposal of assets, interest and depreciation and amortization		1,744,000			2,011,000
Loss on disposal of assets		-			(51,000	)
Interest expense - mortgage		(1,813,000	)		(1,769,000	)
Depreciation and amortization expense		(759,000	)		(714,000	)
Net loss from Hotel operations	$	(828,000	)	$	(523,000	)

For the three months ended December 31, 2015, the Hotel generated operating income of $1,744,000 before the loss on disposal of assets and interest and depreciation and amortization on total operating revenues of $13,713,000 compared to operating income of $2,011,000 before the loss on disposal of assets and interest and depreciation and amortization on total operating revenues of $14,044,000 for the three months ended December 31, 2014.  Room revenues decreased by $120,000 for the three months ended December 31, 2015 compared to the three months ended December 31, 2014 primarily as the result of the decrease in group stays.  Food and beverage revenue also decreased by $215,000 as the result of lower catering and banquet services from groups.

Total operating expenses remained consistent with the prior comparable period. However, the Hotel did have a decrease in franchise fees and legal expenses offset by increases in property taxes, repairs and maintenance expense and management fees. Franchise fees decreased as the result of the new Hilton franchise agreement. Legal expenses decreased as the result of coming closer to a settlement of the current litigation. 

The following table sets forth the average daily room rate, average occupancy percentage and room revenue per available room (“RevPAR”) of the Hotel for the three months ended December 31, 2015 and 2014.

-17-

Three Months Ended December 31,	Average Daily Rate		Average Occupancy %			RevPAR
2015	$	243		89	%	$	216
2014	$	245		89	%	$	218

The Hotel’s revenues decreased by 2.4% this quarter as compared to the previous comparable quarter. Average daily rate and RevPAR decreased by $2 for the three months ended December 31, 2015 compared to the three months ended December 31, 2014.

Our highest priority is guest satisfaction. We believe that enhancing the guest experience differentiates the Hotel from our competition by building the most sustainable guest loyalty program. The Hotel's loyalty score improved by five percentage points year-over-year and our overall service score by four percentage points. We attribute this improvement to continued training of team members on Hilton brand standards and guest satisfaction, hiring and retaining talents in key operations, and enhancing the arrival experience. In addition, the Hotel replaced the carpet flooring in the lobby with oak wood, creating an open and welcoming environment; modernized the furniture in the lobby, the porte cochere, and the second floor; and replaced the third floor carpets and doors. The Wellness Center on the fifth floor features a new spa with two treatment rooms and a room for manicure and pedicure which has been doing well. The fitness center has been expanded with state of the art equipment. 

In order to further enhance the guest experience, the Hotel plans to renovate the fourth floor meeting rooms to make a state of the art meeting space and, concurrently, to renovate the fourth floor bathrooms. The hotel will remodel guest room bathrooms with modern shower amenities, and update desk tables and the night stands with granite tops for a sleek and modern look.  The Hotel is also looking into converting the carpet in the rooms to hardwood floors. Finally, the Hotel, in conjunction with the Chinese Cultural Center, is developing a landscape area on the Pedestrian Bridge that connects the Hotel to Portsmouth Square. We continue to take steps that further develop our ties with the local Chinese community and the city of San Francisco, representing good corporate citizenship and promoting important, new business opportunities.

Real estate revenues for the three months ended December 31, 2015 decreased to $3,546,000 from $4,030,000 for the three months ended December 31, 2014 primarily as the result of the sale of the 249 unit apartment located in Austin, Texas in March 2015. Real estate operating expenses also decreased to $1,715,000 from $2,192,000 primarily as the result of the sale of the property. In August 2015, the Company terminated its third party property management agreement for the management of the Company’s properties located in California and will manage the properties in-house going forward. As of September 2015, all of the Company’s properties are being managed in house. Management believes this will result in a decrease operating expenses and greater operating efficiencies. Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiencies.

In July 2015, the Company purchased a single family house located in Los Angeles, California for $1,975,000 as a strategic investment.

In November 2014, the Company sold its 5,900 square foot commercial property for $3,450,000 which resulted in a realized a gain on the sale of real estate of $1,742,000 for the three months ended December 31, 2014.

The Company had a net loss on marketable securities of $6,356,000 for the three months ended December 31, 2015 compared to a net loss on marketable securities of $1,544,000 for the three months ended December 31, 2014. Approximately $5,562,000 of the $6,356,000 net loss is related to the Company’s investment in the common stock of Comstock. Such investments represent approximately 66% of the Company’s portfolio as of December 31, 2015. For the three months ended December 31, 2015, the Company had a net realized loss of $397,000 and a net unrealized loss of $5,959,000. For the three months ended December 31, 2014, the Company had a net realized loss of $83,000 and a net unrealized loss of $1,461,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.

-18-

During the three months ended December 31, 2015 and 2014, the Company performed an impairment analysis of its other investments and determined that its investments had an other than temporary impairment and recorded impairment losses of $287,000 in the current quarter. There were no such losses in the prior year comparable period.

The Company and its subsidiaries, Portsmouth and Santa Fe, compute and file income tax returns and prepare discrete income tax provisions for financial reporting. The income tax benefit during the three months ended December 31, 2015 and 2014 represents primarily the income tax effect of the pre-tax loss at InterGroup and Portsmouth’s pretax loss which includes its share in net loss of the Hotel.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

The Company had a net loss of $4,417,000 for the six months ended December 31, 2015 compared to a net loss of $1,512,000 for the six months ended December 31, 2014. The increase in the net loss is primarily attributable to the higher net loss on marketable securities primarily as the result of the decrease in the market value of the Company’s holdings in common stock of Comstock Mining, Inc., partially offset by the gain on the sale of real estate recognized during the six months ended December 31, 2014 and to a lesser extent by the higher income from Hotel operations in the current six month period.

The Company had net income from hotel operations of $511,000 for the six months ended December 31, 2015 compared to a net loss of $118,000 for the six months ended December 31, 2014. Hotel revenues remained relatively consistent for the six months ended December 31, 2015 compared to the same period in the prior year while operating expenses decreased.

The following table sets forth a more detailed presentation of Hotel operations for the six months ended December 31, 2015 and 2014.

For the six months ended December 31,	2015			2014
Hotel revenues:
Hotel rooms	$	23,403,000		$	23,260,000
Food and beverage		3,508,000			3,646,000
Garage		1,359,000			1,418,000
Other operating departments		581,000			550,000
Total hotel revenues		28,851,000			28,874,000
Operating expenses, excluding loss on disposal of assets, depreciation and amortization		(23,162,000	)		(23,871,000	)
Operating income before loss on disposal of assets, interest and depreciation and amortization		5,689,000			5,003,000
Loss on disposal of assets		(30,000	)		(51,000	)
Interest expense - mortgage		(3,627,000	)		(3,665,000	)
Depreciation and amortization expense		(1,521,000	)		(1,405,000	)
Net income (loss) from Hotel operations	$	511,000		$	(118,000	)

For the six months ended December 31, 2015, the Hotel generated operating income of $5,689,000 before the loss on disposal of assets and interest and depreciation and amortization on total operating revenues of $28,851,000 compared to operating income of $5,003,000 before the loss on disposal of assets and interest and depreciation and amortization on total operating revenues of $28,874,000 for the six months ended December 31, 2014.  Room revenues increased by $143,000 for the six months ended December 31, 2015 compared to the six months ended December 31, 2014 primarily as the result of the higher revenue from groups.  Food and beverage revenue decreased by $138,000 as the result of lower catering and banquet services from groups.

Operating expenses decreased by $709,000 compared to the prior comparable period primarily due to reduced royalty fees per the new Hilton franchise agreement and the decrease in legal expenses as the result of coming closer to a settlement of the current litigation. 

The following table sets forth the average daily room rate, average occupancy percentage and room revenue per available room (“RevPAR”) of the Hotel for the six months ended December 31, 2015 and 2014.

-19-

Six Months Ended December 31,	Average Daily Rate		Average Occupancy %			RevPAR
2015	$	254		92	%	$	234
2014	$	252		93	%	$	232

The Hotel’s revenues remained consistent with the previous comparable six months. Average daily rate and RevPAR increased by $2 for the six months ended December 31, 2015 compared to the six months ended December 31, 2014. The increases were offset by the decrease in the average occupancy by 1%.

Our highest priority is guest satisfaction. We believe that enhancing the guest experience differentiates the Hotel from our competition by building the most sustainable guest loyalty program. The Hotel's loyalty score improved by five percentage points year-over-year and our overall service score by four percentage points. We attribute this improvement to continued training of team members on Hilton brand standards and guest satisfaction, hiring and retaining talents in key operations, and enhancing the arrival experience. In addition, the Hotel replaced the carpet flooring in the lobby with oak wood, creating an open and welcoming environment; modernized the furniture in the lobby, the porte cochere, and the second floor; and replaced the third floor carpets and doors. The Wellness Center on the fifth floor features a new spa with two treatment rooms and a room for manicure and pedicure which has been doing well. The fitness center has been expanded with state of the art equipment. 

In order to further enhance the guest experience, the Hotel plans to renovate the fourth floor meeting rooms to make a state of the art meeting space and, concurrently, to renovate the fourth floor bathrooms. The hotel will remodel guest room bathrooms with modern shower amenities, and update desk tables and the night stands with granite tops for a sleek and modern look.  The Hotel is also looking into converting the carpet in the rooms to hardwood floors. Finally, the Hotel, in conjunction with the Chinese Cultural Center, is developing a landscape area on the Pedestrian Bridge that connects the Hotel to Portsmouth Square. We continue to take steps that further develop our ties with the local Chinese community and the city of San Francisco, representing good corporate citizenship and promoting important, new business opportunities.

Real estate revenues for the six months ended December 31, 2015 decreased to $7,128,000 from $8,227,000 for the six months ended December 31, 2014 primarily as the result of the sale of the 249 unit apartment located in Austin, Texas in March 2015. Real estate operating expenses also decreased to $3,451,000 from $4,332,000 primarily as the result of the sale of the property. In August 2015, the Company terminated its third party property management agreement for the management of the Company’s properties located in California and will manage the properties in-house going forward. As of September 2015, all of the Company’s properties are being managed in house. Management believes this will result in a decrease operating expenses and greater operating efficiencies. Management continues to review and analyze the Company’s real estate operations to improve occupancy and rental rates and to reduce expenses and improve efficiencies.

In July 2015, the Company purchased a single family house located in Los Angeles, California for $1,975,000 as a strategic investment.

In November 2014, the Company sold its 5,900 square foot commercial property for $3,450,000 which resulted in a realized a gain on the sale of real estate of $1,742,000 for the six months ended December 31, 2014.

The Company had a net loss on marketable securities of $5,976,000 for the six months ended December 31, 2015 compared to a net loss on marketable securities of $3,034,000 for the six months ended December 31, 2014. Approximately $5,146,000 of the $5,976,000 net loss is related to the Company’s investment in the common stock of Comstock. Such investments represent approximately 66% of the Company’s portfolio as of December 31, 2015. For the six months ended December 31, 2015, the Company had a net realized loss of $457,000 and a net unrealized loss of $5,519,000. For the six months ended December 31, 2014, the Company had a net realized gain of $72,000 and a net unrealized loss of $3,106,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.

-20-

During the six months ended December 31, 2015 and 2014, the Company performed an impairment analysis of its other investments and determined that its investments had an other than temporary impairment and recorded impairment losses of $287,000 in the current quarter. There were no such losses in the prior year comparable period.

The Company and its subsidiaries, Portsmouth and Santa Fe, compute and file income tax returns and prepare discrete income tax provisions for financial reporting. The income tax benefit during the six months ended December 31, 2015 and 2014 represents primarily the income tax effect of the pre-tax loss at InterGroup and Portsmouth’s pretax loss which includes its share in net income of the Hotel.

MARKETABLE SECURITIES

As of December 31, 2015 and June 30, 2015, the Company had investments in marketable equity securities of $16,005,000 and $5,827,000, respectively. The following table shows the composition of the Company’s marketable securities portfolio by selected industry groups as:

As of December 31, 2015			% of Total
			Investment
Industry Group	Fair Value		Securities
Basic materials	$	10,938,000		68.3	%
Oil, gas and energy	$	1,769,000		11.1	%
Other		3,298,000		20.6	%
	$	16,005,000		100.0	%

As of June 30, 2015			% of Total
			Investment
Industry Group	Fair Value		Securities
Basic materials	$	2,761,000		47.4	%
Other		3,066,000		52.6	%
	$	5,827,000		100.0	%

The Company’s investment in marketable securities portfolio consists primarily of (66%) of the common stock of Comstock Mining, Inc. (“Comstock” - NYSE MKT: LODE) which is included in the basic materials industry group. The significant increase in the Company’s investment in Comstock was due to the conversion of the $13,231,000 (13,231 preferred shares) held in Comstock Mining, Inc. (“Comstock” – OTCBB: LODE) 7 1/2% Series A-1 Convertible Preferred Stock (the “A-1 Preferred”) to common stock on August 27, 2015. The A-1 Preferred was previously included in other investments prior to its conversion.

Marketable securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date.

For the three months ended December 31,	2015			2014
Net loss on marketable securities	$	(6,356,000	)	$	(1,544,000	)
Net unrealized (loss) gain on other investments		(53,000	)		16,000
Impairment loss on other investments		(287,000	)		-
Dividend and interest income		6,000			503,000
Margin interest expense		(108,000	)		(139,000	)
Trading and management expenses		(114,000	)		(292,000	)
	$	(6,912,000	)	$	(1,456,000	)

-21-

For the six months ended December 31,	2015			2014
Net loss on marketable securities	$	(5,976,000	)	$	(3,034,000	)
Net unrealized loss on other investments		(127,000	)		(26,000	)
Impairment loss on other investments		(287,000	)		-
Dividend and interest income		19,000			517,000
Margin interest expense		(207,000	)		(296,000	)
Trading and management expenses		(255,000	)		(604,000	)
	$	(6,833,000	)	$	(3,443,000	)

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel operations, and general partner management fees, its real estate operations and from the investment of its cash in marketable securities and other investments.

On December 18, 2013, the Partnership completed an Offer to Redeem any and all limited partnership interests not held by Portsmouth. As a result, Portsmouth, which prior to the Offer to Redeem owned 50% of the then outstanding limited partnership interests now controls approximately 93% of the voting interest in Justice and is now its sole General Partner.

To fund redemption of limited partnership interests and to repay the prior mortgage, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan initially bears an interest rate of 5.28% per annum and matures in January 2024. As additional security for the mortgage loan, there is a limited guaranty executed by the Company in favor of mortgage lender. The mezzanine loan is a secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The mezzanine loan initially bears interest at 9.75% per annum and matures in January 2024. As additional security for the mezzanine loan, there is a limited guaranty executed by the Company in favor of mezzanine lender.

On July 2, 2014, the Partnership obtained from the Intergroup Corporation (parent company of Portsmouth) an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. Intergroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The proceeds of the loan were applied to the July 2014 payments to Holdings described in Note 2 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2015. The loan was eliminated in consolidation.

Despite an uncertain economy, the Hotel has continued to generate strong revenue growth. While the debt service requirements related the new loans and the ongoing legal dispute with some of the former Justice partners, may create some additional risk for the Company and its ability to generate cash flows in the future, management believes that cash flows from the operations of the Hotel and the garage will continue to be sufficient to meet all of the Partnership’s current and future obligations and financial requirements. Management also believes that there is sufficient equity in the Hotel assets to support future borrowings, if necessary, to fund any new capital improvements and other requirements.

In July 2015, the Company purchased residential house in Los Angeles, California as a strategic asset for $1,975,000 in cash.

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

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off balance sheet arrangements.

-22-

MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary as of December 31, 2015, the Company’s material financial obligations which also including interest payments.

			6 Months		Year		Year		Year		Year
	Total		2016		2017		2018		2019		2020		Thereafter
Mortgage and subordinated notes payable	$	182,541,000	$	1,879,000	$	2,140,000	$	2,929,000	$	3,070,000	$	3,219,000	$	169,304,000
Other notes payable		4,643,000		428,000		572,000		408,000		362,000		362,000		2,511,000
Interest		63,226,000		5,486,000		9,859,000		9,074,000		8,432,000		7,838,000		22,537,000
Total	$	250,410,000	$	7,793,000	$	12,571,000	$	12,411,000	$	11,864,000	$	11,419,000	$	194,352,000

IMPACT OF INFLATION

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

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

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

Critical accounting policies are those that are most significant to the presentation of our financial position and results of operations and require judgments by management in order to make estimates about the effect of matters that are inherently uncertain. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to the consolidation of our subsidiaries, to our revenues, allowances for bad debts, accruals, asset impairments, other investments, income taxes and commitments and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions. There have been no material changes to the Company’s critical accounting policies during the six months ended December 31, 2015. Please refer to the Company’s Annual Report on Form 10-K for the year ended June 30, 2015 for a summary of the critical accounting policies.

Item 4. Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Principal Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed in this filing is accumulated and communicated to management and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

-23-

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in the Company’s internal control over financial reporting during the last quarterly period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.

OTHER INFORMATION

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

(a) None.

(b) Not applicable.

(c) Purchases of equity securities by the small business issuer and affiliated purchasers.

The following table reflects purchases of InterGroup’s common stock made by The InterGroup Corporation, for its own account, during the second quarter of its fiscal year ending June 30, 2016.

SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

					(c) Total Number		(d) Maximum Number
	(a) Total		(b)		of Shares Purchased		of shares that May
Fiscal	Number of		Average		as Part of Publicly		Yet be Purchased
2016	Shares		Price Paid		Announced Plans		Under the Plans
Period	Purchased		Per Share		or Programs		or Programs
Month #1
(October 1-		400	$	27.20		400		91,806
October 31)
Month #2
(November 1-		700	$	24.81		700		91,106
November 30)
Month #3
(December 1-		200	$	25.07		200		90,906
December 31)
TOTAL:		1,300	$	25.59		1,300		90,906

The Company has only one stock repurchase program. The program was initially announced on January 13, 1998 and was amended on February 10, 2003 and October 12, 2004. The total number of shares authorized to be repurchased pursuant to those prior authorizations was 870,000, adjusted for stock splits. On June 3, 2009, the Board of Directors authorized the Company to purchase up to an additional 125,000 shares of Company’s common stock. On November 15, 2012, the Board of Directors authorized the Company to purchase up to an additional 100,000 shares of Company’s common stock. The purchases will be made, in the discretion of management, from time to time, in the open market or through privately negotiated third party transactions depending on market conditions and other factors. The Company’s repurchase program has no expiration date and can be amended and increased, from time to time, in the discretion of the Board of Directors. No plan or program expired during the period covered by the table.

-24-

Item 6. Exhibits.

31.1	Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
31.2	Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

EX-101.INS XBRL Instance Document

EX-101.SCH XBRL Taxonomy Extension Schema

EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase

EX-101.DEF XBRL Taxonomy Extension Definition Linkbase

EX-101.LAB XBRL Taxonomy Extension Label Linkbase

EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

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

	THE INTERGROUP CORPORATION
	(Registrant)
Date: February 5, 2016	by	/s/ John V. Winfield
		John V. Winfield, President,
		Chairman of the Board and
		Chief Executive Officer
Date: February 5, 2016	by	/s/ David T. Nguyen
		David T. Nguyen, Treasurer
		and Controller

-25-

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, John V. Winfield, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The InterGroup Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 5, 2016

/s/ John V. Winfield

John V. Winfield

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, David T. Nguyen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The InterGroup Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 5, 2016

/s/ David T. Nguyen

David T. Nguyen

Treasurer and Controller

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

Certification of Principal Executive Officer Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of The InterGroup Corporation (the "Company") on Form 10-Q for the quarterly period ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John V. Winfield, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

· The Report fully complies with the requirements of Section 13(a) or 5(d) of the Securities Exchange Act of 1934; and

· The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John V. Winfield

John V. Winfield

President and Chief Executive Officer

(Principal Executive Officer)

Date: February 5, 2016

A signed original of this written statement required by Section 906 has been provided to The InterGroup Corporation and will be retained by The InterGroup Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

Certification of Principal Financial Officer Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of The InterGroup Corporation (the "Company") on Form 10-Q for the quarterly period ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David T. Nguyen, Treasurer and Controller of the Company, serving as its Principal Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

· The Report fully complies with the requirements of Section 13(a) or 5(d) of the Securities Exchange Act of 1934; and

· The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David T. Nguyen

David T. Nguyen

Treasurer and Controller

(Principal Financial Officer)

Date: February 5, 2016

A signed original of this written statement required by Section 906 has been provided to The InterGroup Corporation and will be retained by The InterGroup Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	6 Months Ended
	Dec. 31, 2015	Jan. 08, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	INTERGROUP CORP
Entity Central Index Key	0000069422
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	INTG
Entity Common Stock, Shares Outstanding		2,383,689

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2015	Jun. 30, 2015
ASSETS
Investment in Hotel, net	$ 45,096,000	$ 43,840,000
Investment in real estate, net	57,193,000	55,768,000
Investment in marketable securities	16,005,000	5,827,000
Other investments, net	1,415,000	15,082,000
Cash and cash equivalents	5,079,000	8,529,000
Restricted cash - mortgage impounds	2,937,000	2,868,000
Other assets, net	6,537,000	11,505,000
Deferred income taxes	1,917,000	0
Total assets	136,179,000	143,419,000
Liabilities:
Accounts payable and other liabilities	3,497,000	5,268,000
Accounts payable and other liabilities - Hotel	12,280,000	13,615,000
Due to securities broker	1,552,000	345,000
Obligations for securities sold	0	22,000
Other notes payable	4,643,000	4,905,000
Mortgage notes payable - Hotel	117,000,000	117,000,000
Mortgage notes payable - real estate	65,541,000	66,233,000
Deferred income taxes	0	3,000
Total liabilities	$ 204,513,000	$ 207,391,000
Commitments and contingencies
Shareholders' deficit:
Preferred stock, $.01 par value, 100,000 shares authorized; none issued	$ 0	$ 0
Common stock, $.01 par value, 4,000,000 shares authorized; 3,395,616 and 3,391,096 issued; 2,383,689 and 2,386,029 outstanding, respectively	33,000	33,000
Additional paid-in capital	10,532,000	10,494,000
Accumulated deficit	(40,285,000)	(36,459,000)
Treasury stock, at cost, 1,011,927 and 1,005,067 shares	(12,033,000)	(11,878,000)
Total InterGroup shareholders' deficit	(41,753,000)	(37,810,000)
Noncontrolling interest	(26,581,000)	(26,162,000)
Total shareholders' deficit	(68,334,000)	(63,972,000)
Total liabilities and shareholders' equity	$ 136,179,000	$ 143,419,000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Dec. 31, 2015	Jun. 30, 2015
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000	100,000
Preferred stock , shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	4,000,000	4,000,000
Common stock, shares issued	3,395,616	3,391,096
Common stock, shares outstanding	2,383,689	2,386,029
Treasury stock, shares	1,011,927	1,005,067

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Revenues:
Hotel	$ 13,713,000	$ 14,044,000	$ 28,851,000	$ 28,874,000
Real estate	3,546,000	4,030,000	7,128,000	8,227,000
Total revenues	17,259,000	18,074,000	35,979,000	37,101,000
Costs and operating expenses:
Hotel operating expenses	(11,969,000)	(12,033,000)	(23,162,000)	(23,871,000)
Real estate operating expenses	(1,715,000)	(2,192,000)	(3,451,000)	(4,332,000)
Depreciation and amortization expense	(1,285,000)	(1,232,000)	(2,521,000)	(2,458,000)
General and administrative expense	(585,000)	(960,000)	(1,394,000)	(1,741,000)
Total costs and operating expenses	(15,554,000)	(16,417,000)	(30,528,000)	(32,402,000)
Income from operations	1,705,000	1,657,000	5,451,000	4,699,000
Other income (expense):
Interest expense - mortgages	(2,461,000)	(2,517,000)	(4,925,000)	(5,175,000)
Disposal of other assets	0	(51,000)	(30,000)	(51,000)
Gain on sale of real estate	0	1,742,000	0	1,742,000
Other real estate gain			0	458,000
Net loss on marketable securities	(6,356,000)	(1,544,000)	(5,976,000)	(3,034,000)
Net unrealized (loss) gain on other investments	(53,000)	16,000	(127,000)	(26,000)
Impairment loss on other investments	(287,000)	0	(287,000)	0
Dividend and interest income	6,000	503,000	19,000	517,000
Trading and margin interest expense	(222,000)	(431,000)	(462,000)	(900,000)
Other expense, net	(9,373,000)	(2,282,000)	(11,788,000)	(6,469,000)
Loss before income taxes	(7,668,000)	(625,000)	(6,337,000)	(1,770,000)
Income tax benefit	2,538,000	17,000	1,920,000	258,000
Net loss	(5,130,000)	(608,000)	(4,417,000)	(1,512,000)
Less: Net loss attributable to the noncontrolling interest	835,000	319,000	591,000	460,000
Net loss attributable to InterGroup	$ (4,295,000)	$ (289,000)	$ (3,826,000)	$ (1,052,000)
Net income (loss) per share
Basic and diluted net loss per share (in dollars per share)	$ (2.15)	$ (0.25)	$ (1.85)	$ (0.63)
Basic and diluted net loss per share attributable to InterGroup (in dollars per share)	$ (1.80)	$ (0.12)	$ (1.60)	$ (0.44)
Weighted average number of basic and diluted common shares outstanding (in shares)	2,384,272	2,385,955	2,385,784	2,386,051

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net loss	$ (4,417,000)	$ (1,512,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	2,521,000	2,458,000
Loss on disposal of assets	30,000	51,000
Gain on sale of real estate	0	(1,742,000)
Net unrealized loss on marketable securities	5,519,000	3,106,000
Unrealized loss on other investments	127,000	26,000
Impairment loss on other investments	287,000	0
Stock compensation expense	330,000	552,000
Changes in assets and liabilities:
Investment in marketable securities	(2,444,000)	(3,612,000)
Other assets	5,063,000	12,000
Accounts payable and other liabilities	(3,106,000)	(3,765,000)
Due to securities broker	1,207,000	1,954,000
Obligations for securities sold	(22,000)	397,000
Deferred taxes	(1,920,000)	(258,000)
Net cash provided by (used in) operating activities	3,175,000	(2,333,000)
Cash flows from investing activities:
Net proceeds from sale of real estate	0	3,288,000
Investment in hotel, net	(2,902,000)	(2,916,000)
Investment in real estate, net	(2,425,000)	(331,000)
Investment in Santa Fe	(120,000)	(68,000)
Investment in Portsmouth	0	(33,000)
Net cash used in investing activities	(5,447,000)	(60,000)
Cash flows from financing activities:
Restricted cash - (payments to) withdrawal of mortgage impounds	(69,000)	360,000
Net payments on mortgage and other notes payable	(954,000)	(1,463,000)
Purchase of treasury stock	(155,000)	(56,000)
Net cash used in financing activities	(1,178,000)	(1,159,000)
Net decrease in cash and cash equivalents	(3,450,000)	(3,552,000)
Cash and cash equivalents at the beginning of the period	8,529,000	4,705,000
Cash and cash equivalents at the end of the period	5,079,000	1,153,000
Supplemental information:
Interest paid	5,132,000	5,471,000
Non-cash transaction:
Conversion of other investments to marketable securities	$ 13,231,000	$ 0

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have been prepared by The InterGroup Corporation (“InterGroup” or the “Company”), without audit, according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures that are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all adjustments (which included only normal recurring adjustments) necessary for a fair statement of the financial position, cash flows and results of operations as of and for the periods indicated. It is suggested that these financial statements be read in conjunction with the audited financial statements of InterGroup and the notes therein included in the Company's Annual Report on Form 10-K for the year ended June 30, 2015. The June 30, 2015 Condensed Consolidated Balance Sheet was derived from the Company’s Form 10-K for the year ended June 30, 2015.

The results of operations for the three and six months ended December 31, 2015 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2016.

For the three and six months ended December 31, 2015 and 2014, the Company had no components of comprehensive income other than net loss itself.

Basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. The computation of diluted income per share is similar to the computation of basic earnings per share except that the weighted-average number of common shares is increased to include the number of additional common shares that would have been outstanding if potential dilutive common shares had been issued. The Company's only potentially dilutive common shares are stock options. For the three and six months ended December 31, 2015 and 2014, the Company did not have diluted earnings per share as the Company had a net loss for the respective periods.

As of December 31, 2015, the Company had the power to vote 85.6% of the voting shares of Santa Fe Financial Corporation (“Santa Fe”), a public company (OTCBB: SFEF). This percentage includes the power to vote an approximately 4% interest in the common stock in Santa Fe owned by the Company’s Chairman and President pursuant to a voting trust agreement entered into on June 30, 1998.

Santa Fe’s primary business is conducted through the management of its 68.8% owned subsidiary, Portsmouth Square, Inc. (“Portsmouth”), a public company (OTCBB: PRSI). Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors, a California limited partnership (“Justice” or the “Partnership”). Portsmouth controls approximately 93% of the voting interest in Justice and is the sole general partner. InterGroup also directly owns approximately 13.1% of the common stock of Portsmouth. The financial statements of Justice are consolidated with those of the Company.

Justice, through its subsidiaries Justice Holdings Company, LLC (“Holdings”), a Delaware limited liability Company, Justice Operating Company, LLC (“Operating”) , a Delaware limited liability Company, and Justice Mezzanine Company, LLC (“Mezzanine”) , a Delaware limited liability Company, owns a 543-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. Holdings and Mezzanine are both wholly-owned subsidiaries of the Partnership; Operating is a wholly-owned subsidiary of Mezzanine. Mezzanine is the mezzanine borrower under certain indebtedness of Justice, and in December 2013, the Partnership conveyed ownership of the Hotel to Operating. See Recent Business Developments – Limited Partnership Redemption and Restructuring. The Hotel is operated by the Partnership as a full service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC (Hilton) . Justice also has entered into a Management Agreement with Prism Hospitality L.P. (“Prism”) to perform management functions for the Hotel. The management agreement with Prism had an original term of ten years and can be terminated at any time with or without cause by the Partnership owner. Effective January 2014, the management agreement with Prism was amended by the Partnership. The Owner and Manager desire to amend and restate the Existing Management Agreement to change the nature of the services provided by Manager and its compensation, among other things. Effective December 1, 2013, GMP Management, Inc., a company owned by a Justice limited partner and related party, also provides management services for the Partnership pursuant to a Management Services Agreement, which is for a term of 3 years, but which can be terminated earlier by the Partnership for cause.

Management believes that the revenues expected to be generated from the operations of the hotel, garage and leases will be sufficient to meet all of the Partnership’s current and future obligations and financial requirements. Management also believes that there is significant value in the Hotel to support additional borrowings, if necessary.

In addition to the operations of the Hotel, the Company also generates income from the ownership of real estate. Properties include sixteen apartment complexes, one commercial real estate, and three single-family houses as strategic investments. The properties are located throughout the United States, but are concentrated in Texas and Southern California. The Company also has investments in unimproved real property.

Recently Issued Accounting Pronouncements

In November 2015, FASB issued Accounting Standards Update 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, which is intended to improve how deferred taxes are classified on organizations’ balance sheets by eliminating the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. The changes are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, which means the first quarter of the Company’s fiscal year 2018. We are currently reviewing the ASU and assessing the potential impact on the consolidated financial statements.

In July 2015, the FASB issued Accounting Standard Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11") which requires entities to measure most inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for annual and interim periods beginning after December 15, 2016. Though permitted, the Company does not plan to early adopt. We are currently evaluating the impact ASU 2015-11 will have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and early application is permitted. We are in the process of evaluating this guidance.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015 and for interim periods within those fiscal years, early application is permitted. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. We are in the process of evaluating this guidance and our method of adoption.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)(“ASU 2014-08”). The amendments in ASU 2014-08 provide guidance for the recognition of discontinued operations, change the requirements for reporting discontinued operations in ASC 205-20, “Discontinued Operations” (“ASC 205-20”) and require additional disclosures about discontinued operations. ASU 2014-08 is effective for the Company for annual periods beginning after December 15, 2014. The Company adopted this standard in the quarter ended September 30, 2015 and it did not have an impact on its consolidated financial statements as it relates primarily to how items are presented in the financial statements.

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company does not plan to early adopt. We are currently evaluating the impact ASU 2014-09 will have on the Company's consolidated financial statements.

In August 2014, the FASB issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements — Going Concern ("ASU 2014-15"). The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Though permitted, the Company does not plan to early adopt. The Company does not believe that this standard will have a significant impact on its consolidated financial statements.

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INVESTMENT IN HOTEL, NET

6 Months Ended

Dec. 31, 2015

Hotel [Member]

Real Estate Properties [Line Items]

Investment In Real Estate [Text Block]

NOTE 2 – INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

			Accumulated			Net Book
December 31, 2015	Cost		Depreciation			Value
Land	$	2,738,000	$	-		$	2,738,000
Furniture and equipment		26,704,000		(22,344,000	)		4,360,000
Building and improvements		63,917,000		(25,919,000	)		37,998,000
	$	93,359,000	$	(48,263,000	)	$	45,096,000

			Accumulated			Net Book
June 30, 2015	Cost		Depreciation			Value
Land	$	2,738,000	$	-		$	2,738,000
Furniture and equipment		25,958,000		(21,603,000	)		4,355,000
Building and improvements		62,031,000		(25,284,000	)		36,747,000
	$	90,727,000	$	(46,887,000	)	$	43,840,000

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INVESTMENT IN REAL ESTATE

6 Months Ended

Dec. 31, 2015

Apartment Building [Member]

Real Estate Properties [Line Items]

Real Estate Disclosure [Text Block]

NOTE 3 – INVESTMENT IN REAL ESTATE

Investment in real estate consisted of the following:

As of	December 31, 2015		June 30, 2015
Land	$	24,828,000	$	23,453,000
Buildings, improvements and equipment		65,878,000		64,828,000
Accumulated depreciation		(33,513,000)		(32,513,000)
Investment in real estate, net	$	57,193,000	$	55,768,000

In July 2015, the Company purchased a residential house in Los Angeles, California as a strategic asset for $1,975,000 in cash.

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INVESTMENT IN MARKETABLE SECURITIES

6 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 4 – INVESTMENT IN MARKETABLE SECURITIES

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

At December 31, 2015 and June 30, 2015, all of the Company’s marketable securities are classified as trading securities. The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:

			Gross		Gross		Net		Fair
Investment	Cost		Unrealized Gain		Unrealized Loss		Unrealized Gain (Loss)		Value
As of December 31, 2015
Corporate Equities	$	23,542,000	$	724,000	$	(8,261,000)	$	(7,537,000)	$	16,005,000
As of June 30, 2015
Corporate Equities	$	7,845,000	$	1,136,000	$	(3,154,000)	$	(2,018,000)	$	5,827,000

As of December 31, 2015 and June 30, 2015, the Company had unrealized losses of $3,395,000 and $3,062,000, respectively, related to securities held for over one year.

As of December 31, 2015, approximately 66% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining, Inc.

Net loss on marketable securities on the statement of operations is comprised of realized and unrealized gains (losses). Below is the composition of the two components for the respective periods:

For the three months ended December 31,	2015		2014
Realized loss on marketable securities	$	(397,000)	$	(83,000)
Unrealized loss on marketable securities		(5,959,000)		(1,461,000)
Net loss on marketable securities	$	(6,356,000)	$	(1,544,000)

For the six months ended December 31,	2015		2014
Realized (loss) gain on marketable securities	$	(457,000)	$	72,000
Unrealized loss on marketable securities		(5,519,000)		(3,106,000)
Net loss on marketable securities	$	(5,976,000)	$	(3,034,000)

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OTHER INVESTMENTS, NET

6 Months Ended

Dec. 31, 2015

Other Investments [Abstract]

Other Investments Disclosure [Text Block]

NOTE 5 – OTHER INVESTMENTS, NET

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

Other investments, net consist of the following:

Type	December 31, 2015		June 30, 2015
Preferred stock - Comstock, at cost	$	-	$	13,231,000
Private equity hedge fund, at cost		1,144,000		1,250,000
Other preferred stock, at cost		255,000		497,000
Warrants - at fair value		16,000		104,000
	$	1,415,000	$	15,082,000

As of June 30, 2015, the Company had $13,231,000 (13,231 preferred shares) held in Comstock Mining, Inc. (“Comstock” – OTCBB: LODE) 7 1/2% Series A-1 Convertible Preferred Stock (the “A-1 Preferred”). On August 27, 2015, all of such preferred stock was converted into common stock of Comstock. Such shares are now included on the balance sheet under “Investment in marketable securities”.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 6 - FAIR VALUE MEASUREMENTS

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

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

As of December 31, 2015	Level 1		Level 2		Level 3		Total
Assets:
Other investments - warrants	$	-	$	-	$	16,000	$	16,000
Investment in marketable securities:
Basic materials		10,938,000		-		-		10,938,000
Oil, gas and energy		1,769,000		-		-		1,769,000
Other		3,298,000		-		-		3,298,000
		16,005,000		-		-		16,005,000
	$	16,005,000	$	-	$	16,000	$	16,021,000

As of June 30, 2015	Level 1		Level 2		Level 3		Total
Assets:
Other investments - warrants	$	-	$	-	$	104,000	$	104,000
Investment in marketable securities:
Basic materials		2,761,000		-		-		2,761,000
Other		3,066,000		-		-		3,066,000
		5,827,000		-		-		5,827,000
	$	5,827,000	$	-	$	104,000	$	5,931,000

The fair values of investments in marketable securities are determined by the most recently traded price of each security at the balance sheet date. The fair value of the warrants was determined based upon a Black-Scholes option valuation model.

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:

									Net loss for the six months
Assets	Level 1		Level 2		Level 3		December 31, 2015		ended December 31, 2015
Other non-marketable investments	$	-	$	-	$	1,399,000	$	1,399,000	$	(287,000)

									Net loss for the six months
Assets	Level 1		Level 2		Level 3		June 30, 2015		ended December 31, 2014
Other non-marketable investments	$	-	$	-	$	14,978,000	$	14,978,000	$	-

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 and holds less than 20% ownership in each of the investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value.

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STOCK BASED COMPENSATION PLANS

6 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 7 – STOCK BASED COMPENSATION PLANS

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

Please refer to Note 16 – Stock Based Compensation Plans in the Company's Form 10-K for the year ended June 30, 2015 for more detail information on the Company’s stock-based compensation plans.

During the three months ended December 31, 2015 and 2014, the Company recorded stock option compensation cost of $123,000 and $227,000, respectively, related to stock options that were previously issued. During the six months ended December 31, 2015 and 2014, the Company recorded stock option compensation cost of $242,000 and $464,000, respectively, related to stock options that were previously issued. As of December 31, 2015, there was a total of $508,000 of unamortized compensation related to stock options which is expected to be recognized over the weighted-average period of 3 years.

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

The following table summarizes the stock options activity from July 1, 2014 through December 31, 2015:

		Number of	Weighted Average		Weighted Average	Aggregate
		Shares	Exercise Price		Remaining Life	Intrinsic Value
Oustanding at	July 1, 2014	367,000	$	16.85	7.71 years	$	953,000
Granted		-		-
Exercised		(2,400)		18.00
Forfeited		(5,000)		24.92
Exchanged		(9,600)		18.00
Oustanding at	June 30, 2015	350,000	$	16.70	6.95 years	$	939,000
Exercisable at	June 30, 2015	126,639	$	12.06	6.46 years	$	939,000
Vested and Expected to vest at	June 30, 2015	350,000	$	16.70	6.95 years	$	939,000
Oustanding at	July 1, 2015	350,000	$	16.70	6.95 years	$	939,000
Granted		-		-
Exercised		-		-
Forfeited		-		-
Exchanged		-		-
Oustanding at	December 31, 2015	350,000	$	16.70	6.44 years	$	3,078,000
Exercisable at	December 31, 2015	218,000	$	15.19	5.80 years	$	2,246,000
Vested and Expected to vest at	December 31, 2015	350,000	$	16.70	6.44 years	$	3,078,000

On July 1 of every year, as part of the Stock Compensation Plan for Non-employee Directors, each non-employee director received an automatic grant of a number of shares of Company’s Common Stock equal in value to $22,000 ($88,000 total recorded as stock compensation expense for the six months ended December 31, 2015 and 2014) based on 100% of the fair market value of the Company’s stock on the day of grant. The four non-employee directors of the Company received a total grant of 4,520 and 4,608 shares of common stock on July 1, 2015.

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SEGMENT INFORMATION

6 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 8 – SEGMENT INFORMATION

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

Information below represents reported segments for the three and six months ended December 31, 2015 and 2014. Operating income (loss) from hotel operations consist of the operation of the hotel and operation of the garage. Operating income for rental properties consist of rental income. Operating income (loss) for investment transactions consist of net investment gain (loss), impairment loss on other investments, net unrealized gain (loss) on other investments, dividend and interest income and trading and margin interest expense.

As of and for the three months	Hotel		Real Estate		Investment
ended December 31, 2015	Operations		Operations		Transactions		Other		Total
Revenues	$	13,713,000	$	3,546,000	$	-	$	-	$	17,259,000
Segment operating expenses		(11,969,000)		(1,715,000)		-		(585,000)		(14,269,000)
Segment income (loss) from operations		1,744,000		1,831,000		-		(585,000)		2,990,000
Interest expense - mortgage		(1,813,000)		(648,000)		-		-		(2,461,000)
Depreciation and amortization expense		(759,000)		(526,000)		-		-		(1,285,000)
Loss from investments		-		-		(6,912,000)		-		(6,912,000)
Income tax benefit		-		-		-		2,538,000		2,538,000
Net income (loss)	$	(828,000)	$	657,000	$	(6,912,000)	$	1,953,000	$	(5,130,000)
Total assets	$	50,664,000	$	57,193,000	$	17,420,000	$	10,902,000	$	136,179,000

As of and for the three months	Hotel		Real Estate		Investment
ended December 31, 2014	Operations		Operations		Transactions		Other		Total
Revenues	$	14,044,000	$	4,030,000	$	-	$	-	$	18,074,000
Segment operating expenses		(12,033,000)		(2,192,000)		-		(960,000)		(15,185,000)
Segment income (loss) from operations		2,011,000		1,838,000		-		(960,000)		2,889,000
Interest expense - mortgage		(1,769,000)		(748,000)		-		-		(2,517,000)
Loss on disposal of assets		(51,000)		-		-		-		(51,000)
Gain on sale of real estate		-		1,742,000		-		-		1,742,000
Depreciation and amortization expense		(714,000)		(518,000)		-		-		(1,232,000)
Loss from investments		-		-		(1,456,000)		-		(1,456,000)
Income tax benefit		-		-		-		17,000		17,000
Net income (loss)	$	(523,000)	$	2,314,000	$	(1,456,000)	$	(943,000)	$	(608,000)
Total assets	$	51,234,000	$	61,429,000	$	27,737,000	$	6,250,000	$	146,650,000

As of and for the six months	Hotel		Real Estate		Investment
ended December 31, 2015	Operations		Operations		Transactions		Other		Total
Revenues	$	28,851,000	$	7,128,000	$	-	$	-	$	35,979,000
Segment operating expenses		(23,162,000)		(3,451,000)		-		(1,394,000)		(28,007,000)
Segment income (loss) from operations		5,689,000		3,677,000		-		(1,394,000)		7,972,000
Interest expense - mortgage		(3,627,000)		(1,298,000)		-		-		(4,925,000)
Loss on disposal of assets		(30,000)		-		-		-		(30,000)
Depreciation and amortization expense		(1,521,000)		(1,000,000)		-		-		(2,521,000)
Loss from investments		-		-		(6,833,000)		-		(6,833,000)
Income tax benefit		-		-		-		1,920,000		1,920,000
Net income (loss)	$	511,000	$	1,379,000	$	(6,833,000)	$	526,000	$	(4,417,000)
Total assets	$	50,664,000	$	57,193,000	$	17,420,000	$	10,902,000	$	136,179,000

As of and for the six months	Hotel		Real Estate		Investment
ended December 31, 2014	Operations		Operations		Transactions		Other		Total
Revenues	$	28,874,000	$	8,227,000	$	-	$	-	$	37,101,000
Segment operating expenses		(23,871,000)		(4,332,000)		-		(1,741,000)		(29,944,000)
Segment income (loss) from operations		5,003,000		3,895,000		-		(1,741,000)		7,157,000
Interest expense - mortgage		(3,665,000)		(1,510,000)		-		-		(5,175,000)
Loss on disposal of assets		(51,000)		-		-		-		(51,000)
Gain on sale of real estate		-		1,742,000		-		-		1,742,000
Other real estate income		-		458,000		-		-		458,000
Depreciation and amortization expense		(1,405,000)		(1,053,000)		-		-		(2,458,000)
Loss from investments		-		-		(3,443,000)		-		(3,443,000)
Income tax benefit		-		-		-		258,000		258,000
Net income (loss)	$	(118,000)	$	3,532,000	$	(3,443,000)	$	(1,483,000)	$	(1,512,000)
Total assets	$	51,234,000	$	61,429,000	$	27,737,000	$	6,250,000	$	146,650,000

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RELATED PARTY TRANSACTIONS

6 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 9 – RELATED PARTY TRANSACTIONS

On July 2, 2014, the Partnership obtained from the InterGroup Corporation (parent company of Portsmouth) an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The loan was eliminated in consolidation.

During the three months ended December 31, 2015 and 2014, the Company received management fees from Justice Investors totaling $137,000 and $140,000, respectively. During the six months ended December 31, 2015 and 2014, the Company received management fees from Justice Investors totaling $300,000 and $281,000, respectively.

These fees are eliminated in consolidation.

In connection with the redemption of limited partnership interests of Justice Investors, Limited Partnership (which took place during fiscal year ended June 30, 2014), Justice Operating Company, LLC agreed to pay a total of $1,550,000 in fees to certain officers and directors of the Company for services rendered in connection with the redemption of partnership interests, refinancing of Justice’s properties and reorganization of Justice Investors. This agreement was superseded by a letter dated December 11, 2013 from Justice Investors, Limited Partnership, in which Justice Investors Limited Partnership assumed the payment obligations of Justice Operating Company, LLC. The first payment under this agreement was made concurrently with the closing of the loan agreements, with the remaining payments due upon Justice Investor’s having adequate available cash as described in the letter. As of December 31, 2015, $400,000 of these fees remains outstanding.

Four of the Portsmouth directors serve as directors of InterGroup. Three of those directors also serve as directors of Santa Fe. The three Santa Fe directors also serve as directors of InterGroup.

John V. Winfield serves as Chief Executive Officer and Chairman of the Company, Portsmouth and Santa Fe. Depending on certain market conditions and various risk factors, the Chief Executive Officer, Portsmouth and Santa Fe may, at times, invest in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of the Chief Executive Officer and the resources of Portsmouth and Santa Fe, at risk in connection with investment decisions made on behalf of the Company.

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

In November 2015, FASB issued Accounting Standards Update 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, which is intended to improve how deferred taxes are classified on organizations’ balance sheets by eliminating the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. The changes are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, which means the first quarter of the Company’s fiscal year 2018. We are currently reviewing the ASU and assessing the potential impact on the consolidated financial statements.

In July 2015, the FASB issued Accounting Standard Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11") which requires entities to measure most inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for annual and interim periods beginning after December 15, 2016. Though permitted, the Company does not plan to early adopt. We are currently evaluating the impact ASU 2015-11 will have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and early application is permitted. We are in the process of evaluating this guidance.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015 and for interim periods within those fiscal years, early application is permitted. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. We are in the process of evaluating this guidance and our method of adoption.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)(“ASU 2014-08”). The amendments in ASU 2014-08 provide guidance for the recognition of discontinued operations, change the requirements for reporting discontinued operations in ASC 205-20, “Discontinued Operations” (“ASC 205-20”) and require additional disclosures about discontinued operations. ASU 2014-08 is effective for the Company for annual periods beginning after December 15, 2014. The Company adopted this standard in the quarter ended September 30, 2015 and it did not have an impact on its consolidated financial statements as it relates primarily to how items are presented in the financial statements.

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company does not plan to early adopt. We are currently evaluating the impact ASU 2014-09 will have on the Company's consolidated financial statements.

In August 2014, the FASB issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements — Going Concern ("ASU 2014-15"). The new guidance explicitly requires that management assess an entity's ability to continue as a going concern and may require additional detailed disclosures. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Though permitted, the Company does not plan to early adopt. The Company does not believe that this standard will have a significant impact on its consolidated financial statements.

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INVESTMENT IN HOTEL, NET (Tables)

6 Months Ended

Dec. 31, 2015

Hotel [Member]

Real Estate Properties [Line Items]

Schedule of Real Estate Properties [Table Text Block]

Investment in hotel consisted of the following as of:

			Accumulated			Net Book
December 31, 2015	Cost		Depreciation			Value
Land	$	2,738,000	$	-		$	2,738,000
Furniture and equipment		26,704,000		(22,344,000	)		4,360,000
Building and improvements		63,917,000		(25,919,000	)		37,998,000
	$	93,359,000	$	(48,263,000	)	$	45,096,000

			Accumulated			Net Book
June 30, 2015	Cost		Depreciation			Value
Land	$	2,738,000	$	-		$	2,738,000
Furniture and equipment		25,958,000		(21,603,000	)		4,355,000
Building and improvements		62,031,000		(25,284,000	)		36,747,000
	$	90,727,000	$	(46,887,000	)	$	43,840,000

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INVESTMENT IN REAL ESTATE (Tables)

6 Months Ended

Dec. 31, 2015

Apartment Building [Member]

Real Estate Properties [Line Items]

Schedule of Real Estate Properties [Table Text Block]

Investment in real estate consisted of the following:

As of	December 31, 2015		June 30, 2015
Land	$	24,828,000	$	23,453,000
Buildings, improvements and equipment		65,878,000		64,828,000
Accumulated depreciation		(33,513,000)		(32,513,000)
Investment in real estate, net	$	57,193,000	$	55,768,000

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INVESTMENT IN MARKETABLE SECURITIES (Tables)

6 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Table Text Block]

At December 31, 2015 and June 30, 2015, all of the Company’s marketable securities are classified as trading securities. The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:

			Gross		Gross		Net		Fair
Investment	Cost		Unrealized Gain		Unrealized Loss		Unrealized Gain (Loss)		Value
As of December 31, 2015
Corporate
Equities	$	23,542,000	$	724,000	$	(8,261,000)	$	(7,537,000)	$	16,005,000
As of June 30, 2015
Corporate
Equities	$	7,845,000	$	1,136,000	$	(3,154,000)	$	(2,018,000)	$	5,827,000

Gain (Loss) on Investments [Table Text Block]

Net loss on marketable securities on the statement of operations is comprised of realized and unrealized gains (losses). Below is the composition of the two components for the respective periods:

For the three months ended December 31,	2015		2014
Realized loss on marketable securities	$	(397,000)	$	(83,000)
Unrealized loss on marketable securities		(5,959,000)		(1,461,000)
Net loss on marketable securities	$	(6,356,000)	$	(1,544,000)

For the six months ended December 31,	2015		2014
Realized (loss) gain on marketable securities	$	(457,000)	$	72,000
Unrealized loss on marketable securities		(5,519,000)		(3,106,000)
Net loss on marketable securities	$	(5,976,000)	$	(3,034,000)

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OTHER INVESTMENTS, NET (Tables)

6 Months Ended

Dec. 31, 2015

Other Investments [Abstract]

Other Investments Not Readily Marketable [Table Text Block]

Other investments, net consist of the following:

Type	December 31, 2015		June 30, 2015
Preferred stock - Comstock, at cost	$	-	$	13,231,000
Private equity hedge fund, at cost		1,144,000		1,250,000
Other preferred stock, at cost		255,000		497,000
Warrants - at fair value		16,000		104,000
	$	1,415,000	$	15,082,000

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

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

As of December 31, 2015	Level 1		Level 2		Level 3		Total
Assets:
Other investments - warrants	$	-	$	-	$	16,000	$	16,000
Investment in marketable securities:
Basic materials		10,938,000		-		-		10,938,000
Oil, gas and energy		1,769,000		-		-		1,769,000
Other		3,298,000		-		-		3,298,000
		16,005,000		-		-		16,005,000
	$	16,005,000	$	-	$	16,000	$	16,021,000

As of June 30, 2015	Level 1		Level 2		Level 3		Total
Assets:
Other investments - warrants	$	-	$	-	$	104,000	$	104,000
Investment in marketable securities:
Basic materials		2,761,000		-		-		2,761,000
Other		3,066,000		-		-		3,066,000
		5,827,000		-		-		5,827,000
	$	5,827,000	$	-	$	104,000	$	5,931,000

Fair Value Measurements, Nonrecurring [Table Text Block]

The following table shows the fair value hierarchy for these assets measured at fair value on a non-recurring basis as follows:

									Net loss for the six months
Assets	Level 1		Level 2		Level 3		December 31, 2015		ended December 31, 2015
Other non-marketable investments	$	-	$	-	$	1,399,000	$	1,399,000	$	(287,000)

									Net loss for the six months
Assets	Level 1		Level 2		Level 3		June 30, 2015		ended December 31, 2014
Other non-marketable investments	$	-	$	-	$	14,978,000	$	14,978,000	$	-

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STOCK BASED COMPENSATION PLANS (Tables)

6 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following table summarizes the stock options activity from July 1, 2014 through December 31, 2015:

		Number of	Weighted Average		Weighted Average	Aggregate
		Shares	Exercise Price		Remaining Life	Intrinsic Value
Oustanding at	July 1, 2014	367,000	$	16.85	7.71 years	$	953,000
Granted		-		-
Exercised		(2,400)		18.00
Forfeited		(5,000)		24.92
Exchanged		(9,600)		18.00
Oustanding at	June 30, 2015	350,000	$	16.70	6.95 years	$	939,000
Exercisable at	June 30, 2015	126,639	$	12.06	6.46 years	$	939,000
Vested and Expected to vest at	June 30, 2015	350,000	$	16.70	6.95 years	$	939,000
Oustanding at	July 1, 2015	350,000	$	16.70	6.95 years	$	939,000
Granted		-		-
Exercised		-		-
Forfeited		-		-
Exchanged		-		-
Oustanding at	December 31, 2015	350,000	$	16.70	6.44 years	$	3,078,000
Exercisable at	December 31, 2015	218,000	$	15.19	5.80 years	$	2,246,000
Vested and Expected to vest at	December 31, 2015	350,000	$	16.70	6.44 years	$	3,078,000

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SEGMENT INFORMATION (Tables)

6 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Information below represents reported segments for the three and six months ended December 31, 2015 and 2014. Operating income (loss) from hotel operations consist of the operation of the hotel and operation of the garage. Operating income for rental properties consist of rental income. Operating income (loss) for investment transactions consist of net investment gain (loss), impairment loss on other investments, net unrealized gain (loss) on other investments, dividend and interest income and trading and margin interest expense.

As of and for the three months	Hotel		Real Estate		Investment
ended December 31, 2015	Operations		Operations		Transactions		Other		Total
Revenues	$	13,713,000	$	3,546,000	$	-	$	-	$	17,259,000
Segment operating expenses		(11,969,000)		(1,715,000)		-		(585,000)		(14,269,000)
Segment income (loss) from operations		1,744,000		1,831,000		-		(585,000)		2,990,000
Interest expense - mortgage		(1,813,000)		(648,000)		-		-		(2,461,000)
Depreciation and amortization expense		(759,000)		(526,000)		-		-		(1,285,000)
Loss from investments		-		-		(6,912,000)		-		(6,912,000)
Income tax benefit		-		-		-		2,538,000		2,538,000
Net income (loss)	$	(828,000)	$	657,000	$	(6,912,000)	$	1,953,000	$	(5,130,000)
Total assets	$	50,664,000	$	57,193,000	$	17,420,000	$	10,902,000	$	136,179,000

As of and for the three months	Hotel		Real Estate		Investment
ended December 31, 2014	Operations		Operations		Transactions		Other		Total
Revenues	$	14,044,000	$	4,030,000	$	-	$	-	$	18,074,000
Segment operating expenses		(12,033,000)		(2,192,000)		-		(960,000)		(15,185,000)
Segment income (loss) from operations		2,011,000		1,838,000		-		(960,000)		2,889,000
Interest expense - mortgage		(1,769,000)		(748,000)		-		-		(2,517,000)
Loss on disposal of assets		(51,000)		-		-		-		(51,000)
Gain on sale of real estate		-		1,742,000		-		-		1,742,000
Depreciation and amortization expense		(714,000)		(518,000)		-		-		(1,232,000)
Loss from investments		-		-		(1,456,000)		-		(1,456,000)
Income tax benefit		-		-		-		17,000		17,000
Net income (loss)	$	(523,000)	$	2,314,000	$	(1,456,000)	$	(943,000)	$	(608,000)
Total assets	$	51,234,000	$	61,429,000	$	27,737,000	$	6,250,000	$	146,650,000

As of and for the six months	Hotel		Real Estate		Investment
ended December 31, 2015	Operations		Operations		Transactions		Other		Total
Revenues	$	28,851,000	$	7,128,000	$	-	$	-	$	35,979,000
Segment operating expenses		(23,162,000)		(3,451,000)		-		(1,394,000)		(28,007,000)
Segment income (loss) from operations		5,689,000		3,677,000		-		(1,394,000)		7,972,000
Interest expense - mortgage		(3,627,000)		(1,298,000)		-		-		(4,925,000)
Loss on disposal of assets		(30,000)		-		-		-		(30,000)
Depreciation and amortization expense		(1,521,000)		(1,000,000)		-		-		(2,521,000)
Loss from investments		-		-		(6,833,000)		-		(6,833,000)
Income tax benefit		-		-		-		1,920,000		1,920,000
Net income (loss)	$	511,000	$	1,379,000	$	(6,833,000)	$	526,000	$	(4,417,000)
Total assets	$	50,664,000	$	57,193,000	$	17,420,000	$	10,902,000	$	136,179,000

As of and for the six months	Hotel		Real Estate		Investment
ended December 31, 2014	Operations		Operations		Transactions		Other		Total
Revenues	$	28,874,000	$	8,227,000	$	-	$	-	$	37,101,000
Segment operating expenses		(23,871,000)		(4,332,000)		-		(1,741,000)		(29,944,000)
Segment income (loss) from operations		5,003,000		3,895,000		-		(1,741,000)		7,157,000
Interest expense - mortgage		(3,665,000)		(1,510,000)		-		-		(5,175,000)
Loss on disposal of assets		(51,000)		-		-		-		(51,000)
Gain on sale of real estate		-		1,742,000		-		-		1,742,000
Other real estate income		-		458,000		-		-		458,000
Depreciation and amortization expense		(1,405,000)		(1,053,000)		-		-		(2,458,000)
Loss from investments		-		-		(3,443,000)		-		(3,443,000)
Income tax benefit		-		-		-		258,000		258,000
Net income (loss)	$	(118,000)	$	3,532,000	$	(3,443,000)	$	(1,483,000)	$	(1,512,000)
Total assets	$	51,234,000	$	61,429,000	$	27,737,000	$	6,250,000	$	146,650,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	6 Months Ended
	Dec. 31, 2015
Basis Of Presentation And Significant Accounting Policies [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	93.00%
Portsmouth [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	68.80%
Noncontrolling Interest, Ownership Percentage by Parent	13.10%
Santa Fe [Member]
Basis Of Presentation And Significant Accounting Policies [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	85.60%
Percentage Of Voting Shares In Common Stock	4.00%

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INVESTMENT IN HOTEL, NET (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Property, Plant and Equipment [Line Items]
Net Book Value	$ 45,096,000	$ 43,840,000
Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	93,359,000	90,727,000
Accumulated Depreciation	(48,263,000)	(46,887,000)
Net Book Value	45,096,000	43,840,000
Land [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	2,738,000	2,738,000
Accumulated Depreciation	0	0
Net Book Value	2,738,000	2,738,000
Furniture and equipment [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	26,704,000	25,958,000
Accumulated Depreciation	(22,344,000)	(21,603,000)
Net Book Value	4,360,000	4,355,000
Building and improvements [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	63,917,000	62,031,000
Accumulated Depreciation	(25,919,000)	(25,284,000)
Net Book Value	$ 37,998,000	$ 36,747,000

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INVESTMENT IN REAL ESTATE (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Property, Plant and Equipment [Line Items]
Investment in real estate, net	$ 57,193,000	$ 55,768,000
Apartment Building [Member]
Property, Plant and Equipment [Line Items]
Accumulated depreciation	(33,513,000)	(32,513,000)
Apartment Building [Member] | Land [Member]
Property, Plant and Equipment [Line Items]
Cost	24,828,000	23,453,000
Apartment Building [Member] | Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Cost	$ 65,878,000	$ 64,828,000

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INVESTMENT IN REAL ESTATE (Details Textual)	1 Months Ended
	Jul. 31, 2015 USD ($)
Real Estate Investment [Member] | California Properties [Member]
Property, Plant and Equipment [Line Items]
Payments to Acquire Real Estate, Total	$ 1,975,000

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INVESTMENT IN MARKETABLE SECURITIES (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net Unrealized Gain (Loss)	$ (5,959,000)	$ (1,461,000)	$ (5,519,000)	$ (3,106,000)
Fair Value	16,005,000		16,005,000		$ 5,827,000
Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Cost	23,542,000		23,542,000		7,845,000
Gross Unrealized Gain			724,000		1,136,000
Gross Unrealized Loss			(8,261,000)		(3,154,000)
Net Unrealized Gain (Loss)			(7,537,000)		(2,018,000)
Fair Value	$ 16,005,000		$ 16,005,000		$ 5,827,000

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INVESTMENT IN MARKETABLE SECURITIES (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Schedule of Trading Securities and Other Trading Assets [Line Items]
Realized (loss) gain on marketable securities	$ (397,000)	$ (83,000)	$ (457,000)	$ 72,000
Unrealized loss on marketable securities	(5,959,000)	(1,461,000)	(5,519,000)	(3,106,000)
Net loss on marketable securities	$ (6,356,000)	$ (1,544,000)	$ (5,976,000)	$ (3,034,000)

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INVESTMENT IN MARKETABLE SECURITIES (Details Textual) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Loss	$ 3,395,000	$ 3,062,000
Percentage of Investment Marketable Securities	66.00%

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OTHER INVESTMENTS, NET (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Other Investment [Line Items]
Other investments, net	$ 1,415,000	$ 15,082,000
Preferred stock - Comstock, at cost [Member]
Other Investment [Line Items]
Other investments, net	0	13,231,000
Private equity hedge fund, at cost [Member]
Other Investment [Line Items]
Other investments, net	1,144,000	1,250,000
Other preferred stock, at cost [Member]
Other Investment [Line Items]
Other investments, net	255,000	497,000
Warrants - at fair value [Member]
Other Investment [Line Items]
Other investments, net	$ 16,000	$ 104,000

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OTHER INVESTMENTS, NET (Details Textual) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Other Investment [Line Items]
Other Investments, Total	$ 1,415,000	$ 15,082,000
Comstock Mining, Inc [Member]
Other Investment [Line Items]
Other Investments, Total		$ 13,231,000
Preferred Stock, Shares Outstanding		13,231

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Assets:
Investment in marketable securities	$ 16,005,000	$ 5,827,000
Assets, Fair Value Disclosure	16,021,000	5,931,000
Fair Value, Measurements, Recurring [Member]
Assets:
Other investments - warrants	16,000	104,000
Investment in marketable securities	16,005,000	5,827,000
Fair Value, Inputs, Level 1 [Member]
Assets:
Assets, Fair Value Disclosure	16,005,000	5,827,000
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Other investments - warrants	0	0
Investment in marketable securities	16,005,000	5,827,000
Fair Value, Inputs, Level 2 [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Other investments - warrants	0	0
Investment in marketable securities	0	0
Fair Value, Inputs, Level 3 [Member]
Assets:
Assets, Fair Value Disclosure	16,000	104,000
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Other investments - warrants	16,000	104,000
Investment in marketable securities	0	0
Basic Materials [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	10,938,000	2,761,000
Basic Materials [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	10,938,000	2,761,000
Basic Materials [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	0	0
Basic Materials [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	0	0
Oil, Gas and Energy [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	1,769,000
Oil, Gas and Energy [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	1,769,000
Oil, Gas and Energy [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	0
Oil, Gas and Energy [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	0
Other [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	3,298,000	3,066,000
Other [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	3,298,000	3,066,000
Other [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	0	0
Other [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment in marketable securities	$ 0	$ 0

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FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Net loss	$ (287,000)	$ 0
Other Investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	1,399,000		$ 14,978,000
Other Investments [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	0		0
Other Investments [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	0		0
Other Investments [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	$ 1,399,000		$ 14,978,000

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FAIR VALUE MEASUREMENTS (Details Textual)	6 Months Ended
	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost Method Investments, Additional Information	Other investments in non-marketable securities are carried at cost net of any impairment loss. The Company has no significant influence or control over the entities that issue these investments and holds less than 20% ownership in each of the investments.

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STOCK BASED COMPENSATION PLANS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015	Jun. 30, 2014
Stock Based Compensation [Line Items]
Oustanding at Weighted Average Remaining Life		6 years 11 months 12 days
Outstanding, Aggregate Intrinsic Value		$ 939,000
Equity Option [Member]
Stock Based Compensation [Line Items]
Oustanding, Number of Shares	350,000	367,000
Granted, Number of Shares	0	0
Exercised, Number of Shares	0	(2,400)
Forfeited, Number of Shares	0	(5,000)
Exchanged, Number of Shares	0	(9,600)
Oustanding, Number of Shares	350,000	350,000	367,000
Exercisable, Number of Shares	218,000	126,639
Vested and Expected to vest, Number of Shares	350,000	350,000
Oustanding, Weighted Average Exercise Price	$ 16.70	$ 16.85
Granted, Weighted Average Exercise Price	0	0
Exercised, Weighted Average Exercise Price	0	18.00
Forfeited, Weighted Average Exercise Price	0	24.92
Exchanged, Weighted Average Exercise Price	0	18.00
Oustanding, Weighted Average Exercise Price	16.70	16.70	$ 16.85
Exercisable, Weighted Average Exercise Price	15.19	12.06
Vested and Expected to vest, Weighted Average Exercise Price	$ 16.70	$ 16.70
Oustanding at Weighted Average Remaining Life	6 years 5 months 8 days	6 years 11 months 12 days	7 years 8 months 16 days
Exercisable, Weighted Average Remaining Life	5 years 9 months 18 days	6 years 5 months 16 days
Vested and Expected to vest, Weighted Average Remaining Life	6 years 5 months 8 days	6 years 11 months 12 days
Outstanding, Aggregate Intrinsic Value	$ 3,078,000	$ 939,000	$ 953,000
Exercisable, Aggregate Intrinsic Value	2,246,000	939,000
Vested and Expected to vest, Aggregate Intrinsic Value	$ 3,078,000	$ 939,000

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STOCK BASED COMPENSATION PLANS (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Stock Based Compensation [Line Items]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount	$ 123,000	$ 227,000	$ 242,000	$ 464,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 508,000		$ 508,000
Share-Based Compensation Arrangement By Share-Based Payment Award Award Vesting Period 1			3 years
Share-based Compensation, Total			$ 330,000	552,000
Non Employee Directors [Member]
Stock Based Compensation [Line Items]
Stock Issued During Period, Value, Share-based Compensation, Gross			$ 22,000
Share Based Compensation By Share Based Payment Award Fair Market Value, Percentage			100.00%
Share-based Compensation, Total			$ 88,000	$ 88,000
Non Employee Directors [Member] | Common Stock [Member]
Stock Based Compensation [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	4,520	4,608	4,520	4,608

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SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2015
Segment Reporting Information [Line Items]
Revenues	$ 17,259,000	$ 18,074,000	$ 35,979,000	$ 37,101,000
Segment operating expenses	(14,269,000)	(15,185,000)	(28,007,000)	(29,944,000)
Segment income (loss) from operations	1,705,000	1,657,000	5,451,000	4,699,000
Interest expense - mortgage	(2,461,000)	(2,517,000)	(4,925,000)	(5,175,000)
Loss on disposal of assets	0	(51,000)	(30,000)	(51,000)
Gain on sale of real estate	0	1,742,000	0	1,742,000
Depreciation and amortization expense	(1,285,000)	(1,232,000)	(2,521,000)	(2,458,000)
Other real estate income			0	458,000
Loss from investments	(6,912,000)	(1,456,000)	(6,833,000)	(3,443,000)
Income tax benefit	2,538,000	17,000	1,920,000	258,000
Net income (loss)	(5,130,000)	(608,000)	(4,417,000)	(1,512,000)
Total assets	136,179,000	146,650,000	136,179,000	146,650,000	$ 143,419,000
Hotel Operations [Member]
Segment Reporting Information [Line Items]
Revenues	13,713,000	14,044,000	28,851,000	28,874,000
Segment operating expenses	(11,969,000)	(12,033,000)	(23,162,000)	(23,871,000)
Segment income (loss) from operations	1,744,000	2,011,000	5,689,000	5,003,000
Interest expense - mortgage	(1,813,000)	(1,769,000)	(3,627,000)	(3,665,000)
Loss on disposal of assets		(51,000)	(30,000)	(51,000)
Gain on sale of real estate		0		0
Depreciation and amortization expense	(759,000)	(714,000)	(1,521,000)	(1,405,000)
Other real estate income				0
Loss from investments	0	0	0	0
Income tax benefit	0	0	0	0
Net income (loss)	(828,000)	(523,000)	511,000	(118,000)
Total assets	50,664,000	51,234,000	50,664,000	51,234,000
Real Estate Operations [Member]
Segment Reporting Information [Line Items]
Revenues	3,546,000	4,030,000	7,128,000	8,227,000
Segment operating expenses	(1,715,000)	(2,192,000)	(3,451,000)	(4,332,000)
Segment income (loss) from operations	1,831,000	1,838,000	3,677,000	3,895,000
Interest expense - mortgage	(648,000)	(748,000)	(1,298,000)	(1,510,000)
Loss on disposal of assets		0	0	0
Gain on sale of real estate		1,742,000		1,742,000
Depreciation and amortization expense	(526,000)	(518,000)	(1,000,000)	(1,053,000)
Other real estate income				458,000
Loss from investments	0	0	0	0
Income tax benefit	0	0	0	0
Net income (loss)	657,000	2,314,000	1,379,000	3,532,000
Total assets	57,193,000	61,429,000	57,193,000	61,429,000
Investment Transactions [Member]
Segment Reporting Information [Line Items]
Revenues	0	0	0	0
Segment operating expenses	0	0	0	0
Segment income (loss) from operations	0	0	0	0
Interest expense - mortgage	0	0	0	0
Loss on disposal of assets		0	0	0
Gain on sale of real estate		0		0
Depreciation and amortization expense	0	0	0	0
Other real estate income				0
Loss from investments	(6,912,000)	(1,456,000)	(6,833,000)	(3,443,000)
Income tax benefit	0	0	0	0
Net income (loss)	(6,912,000)	(1,456,000)	(6,833,000)	(3,443,000)
Total assets	17,420,000	27,737,000	17,420,000	27,737,000
Other [Member]
Segment Reporting Information [Line Items]
Revenues	0	0	0	0
Segment operating expenses	(585,000)	(960,000)	(1,394,000)	(1,741,000)
Segment income (loss) from operations	(585,000)	(960,000)	(1,394,000)	(1,741,000)
Interest expense - mortgage	0	0	0	0
Loss on disposal of assets		0	0	0
Gain on sale of real estate		0		0
Depreciation and amortization expense	0	0	0	0
Other real estate income				0
Loss from investments	0	0	0	0
Income tax benefit	2,538,000	17,000	1,920,000	258,000
Net income (loss)	1,953,000	(943,000)	526,000	(1,483,000)
Total assets	$ 10,902,000	$ 6,250,000	$ 10,902,000	$ 6,250,000

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RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2015
Related Party Transaction [Line Items]
Management Fees Revenue		$ 137,000	$ 140,000	$ 300,000	$ 281,000
Payments to Acquire Limited Partnership Interests						$ 1,550,000
Management Fee Payable		$ 400,000		$ 400,000
InterGroup [Member]
Related Party Transaction [Line Items]
Debt Instrument, Face Amount	$ 4,250,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Term	2 years
Debt Instrument Fee Percent	3.00%