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 September 30, 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 0-4057

PORTSMOUTH SQUARE, INC.

(Exact name of registrant as specified in its charter)

CALIFORNIA	94-1674111
(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 October 9, 2015, was 734,183.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and June 30, 2015.	3
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months ended September 30, 2015 and 2014.	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months ended September 30, 2015 and 2014.	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12
Item 4.	Controls and Procedures.	16
	PART II – OTHER INFORMATION
Item 6.	Exhibits.	17
Signatures		17

- 2 -

PART 1

FINANCIAL INFORMATION

Item 1 – Condensed Consolidated Financial Statements

PORTSMOUTH SQUARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of	September 30, 2015			June 30, 2015
	(Unaudited)
ASSETS
Investment in Hotel, net	$	37,068,000		$	36,567,000
Investment in real estate		973,000			973,000
Investment in marketable securities		5,697,000			1,301,000
Other investments, net		575,000			5,003,000
Cash and cash equivalents		3,814,000			1,077,000
Restricted cash - mortgage impounds		844,000			587,000
Accounts receivable - Hotel, net		2,229,000			6,791,000
Other assets, net		3,224,000			3,399,000
Deferred tax asset		7,908,000			8,351,000
Total assets	$	62,332,000		$	64,049,000
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Accounts payable and other liabilities	$	12,359,000		$	14,622,000
Related party and other notes payable		9,031,000			9,155,000
Mortgage notes payable - Hotel		117,000,000			117,000,000
Total liabilities		138,390,000			140,777,000
Commitments and contingencies
Shareholders' deficit:
Common stock, no par value: Authorized shares - 750,000; 734,183 shares issued and outstanding shares		2,092,000			2,092,000
Accumulated deficit		(71,928,000	)		(72,523,000	)
Total Portsmouth shareholders' deficit		(69,836,000	)		(70,431,000	)
Noncontrolling interest		(6,222,000	)		(6,297,000	)
Total shareholders' deficit		(76,058,000	)		(76,728,000	)
Total liabilities and shareholders' deficit	$	62,332,000		$	64,049,000

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

- 3 -

PORTSMOUTH SQUARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the three months ended September 30,	2015			2014
Revenue - Hotel	$	15,138,000		$	14,830,000
Costs and operating expenses
Hotel operating expenses		(11,193,000	)		(11,838,000	)
Hotel depreciation and amortization expense		(713,000	)		(642,000	)
General and administrative expense		(203,000	)		(188,000	)
Total costs and operating expenses		(12,109,000	)		(12,668,000	)
Income from operations		3,029,000			2,162,000
Other income (expense)
Interest expense - mortgage		(1,941,000	)		(2,024,000	)
Loss on disposal of assets		(30,000	)		-
Net gain (loss) on marketable securities		104,000			(479,000	)
Net unrealized loss on other investments		(19,000	)		(25,000	)
Dividend and interest income		2,000			3,000
Trading and margin interest expense		(32,000	)		(91,000	)
Other expense, net		(1,916,000	)		(2,616,000	)
Income (loss) before income taxes		1,113,000			(454,000	)
Income tax (expense) benefit		(443,000	)		182,000
Net income (loss)		670,000			(272,000	)
Less:  Net loss attributable to the noncontrolling interest		(75,000	)		(13,000	)
Net income (loss) attributable to Portsmouth	$	595,000		$	(285,000	)
Basic and diluted net income (loss) per share attributable to Portsmouth	$	0.81		$	(0.39	)
Weighted average number of common shares outstanding - basic and diluted		734,183			734,183

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

- 4 -

PORTSMOUTH SQUARE, INC.

CONDENDSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the three months ended September 30,	2015			2014
Cash flows from operating activities:
Net income (loss)	$	670,000		$	(272,000	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Net unrealized (gain) loss on marketable securities		(129,000	)		522,000
Unrealized loss on other investments		19,000			25,000
Loss on disposal of assets		30,000			-
Depreciation and amortization		713,000			642,000
Changes in assets and liabilities:
Investment in marketable securities		142,000			173,000
Accounts receivable		4,562,000			(383,000	)
Other assets		222,000			339,000
Accounts payable and other liabilities		(2,263,000	)		(3,333,000	)
Due to securities broker		-			(629,000	)
Obligations for securities sold		-			670,000
Deferred tax asset		443,000			(182,000	)
Net cash provided by (used in) operating activities		4,409,000			(2,428,000	)
Cash flows from investing activities:
Payments for hotel furniture, equipment and building improvements		(1,291,000	)		(1,314,000	)
Net cash provided used in investing activities		(1,291,000	)		(1,314,000	)
Cash flows from financing activities:
Restricted cash - (payments to) withdrawal of mortgage impounds, net		(257,000	)		98,000
Net (payments) proceeds from mortgage and other notes payable		(124,000	)		4,360,000
Net cash (used in) provided by financing activities		(381,000	)		4,458,000
Net increase in cash and cash equivalents		2,737,000			716,000
Cash and cash equivalents at the beginning of the period		1,077,000			1,058,000
Cash and cash equivalents at the end of the period	$	3,814,000		$	1,774,000
Supplemental information:
Interest paid	$	1,941,000		$	2,038,000
Non-cash transaction:
Conversion of other investments to marketable securities	$	4,410,000		$	-

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

- 5 -

PORTSMOUTH SQUARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have been prepared by Portsmouth Square, Inc. (“Portsmouth” 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 Portsmouth 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 months ended September 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2016.

For the three months ended September 30, 2015 and 2014, the Company had no components of comprehensive income other than net income itself.

As of September 30, 2015, Santa Fe Financial Corporation (“Santa Fe”), a public company, owns approximately 68.8% of the outstanding common shares of Portsmouth Square, Inc. (“Portsmouth” or the “Company”). Santa Fe is an 81.7%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.1% of the common stock of Portsmouth.

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.

Justice, through its subsidiaries Justice Holdings Company, LLC (“Holdings”), a Delaware Limited Liability Company, Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”), 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 a 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. 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 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.

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.

Basic income (loss) per share is calculated based upon the weighted average number of common shares outstanding during each period. During the three months September 30, 2015 and 2014, the Company did not have any potentially dilutive securities outstanding.

- 6 -

Recently Issued Accounting Pronouncements

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.

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.

- 7 -

NOTE 2 – INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

			Accumulated			Net Book
September 30, 2015	Cost		Depreciation			Value
Land	$	1,124,000	$	-		$	1,124,000
Furniture and equipment		26,197,000		(21,965,000	)		4,232,000
Building and improvements		54,502,000		(22,790,000	)		31,712,000
	$	81,823,000	$	(44,755,000	)	$	37,068,000

			Accumulated			Net Book
June 30, 2015	Cost		Depreciation			Value
Land	$	1,124,000	$	-		$	1,124,000
Furniture and equipment		25,958,000		(21,605,000	)		4,353,000
Building and improvements		53,641,000		(22,551,000	)		31,090,000
	$	80,723,000	$	(44,156,000	)	$	36,567,000

NOTE 3 - INVESTMENT IN MARKETABLE SECURITIES

The Company’s investment in marketable securities consists primarily of corporate equities. The Company has also 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 September 30, 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 September 30, 2015
Corporate
Equities	$	6,277,000	$	359,000	$	(939,000	)	$	(580,000	)	$	5,697,000
As of June 30, 2015
Corporate
Equities	$	2,009,000	$	240,000	$	(948,000	)	$	(708,000	)	$	1,301,000

As of September 30, 2015, approximately 95% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining, Inc.

As of September 30, 2015 and June 30, 2015, the Company had $935,000 and $940,000, respectively, of unrealized losses related to securities held for over one year.

Net gain (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 three months September 30, 2015 and 2014, respectively.

- 8 -

For the three months ended September 30,	2015			2014
Realized (loss) gain on marketable securities	$	(25,000	)	$	43,000
Unrealized gain (loss) on marketable securities		129,000			(522,000	)
Net gain (loss) on marketable securities	$	104,000		$	(479,000	)

NOTE 4 – 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	September 30, 2015		June 30, 2015
Preferred stock - Comstock, at cost	$	-	$	4,410,000
Private equity hedge fund, at cost		456,000		456,000
Other preferred stock		102,000		112,000
Warrants - at fair value		17,000		25,000
	$	575,000	$	5,003,000

As of June 30, 2015, the Company had $4,410,000 (4,410 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 5 - 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) 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 September 30, 2015
Assets:	Level 1		Level 2		Level 3		Total
Other investments - warrants	$	-	$	-	$	17,000	$	17,000
Investment in marketable securities:
Basic materials		5,422,000		-		-		5,422,000
Other		275,000		-		-		275,000
		5,697,000		-		-		5,697,000
	$	5,697,000	$	-	$	17,000	$	5,714,000

- 9 -

As of June 30, 2015
Assets:	Level 1		Level 2		Level 3		Total
Other investments - warrants	$	-	$	-	$	25,000	$	25,000
Investment in marketable securities:
Basic materials		926,000		-		-		926,000
Other		375,000		-		-		375,000
		1,301,000		-		-		1,301,000
	$	1,301,000	$	-	$	25,000	$	1,326,000

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, net (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 three months
Assets	Level 1		Level 2		Level 3		September 30, 2015		ended September 30, 2015
Other non-marketable investments	$	-	$	-	$	558,000	$	558,000	$	-

									Net loss for the three months
Assets	Level 1		Level 2		Level 3		June 30, 2015		ended September 30, 2014
Other non-marketable investments	$	-	$	-	$	4,978,000	$	4,978,000	$	-

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 6 - SEGMENT INFORMATION

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

Information below represents reporting segments for the three months September 30, 2015 and 2014, respectively. Operating income from Hotel operations consists of the operation of the hotel and operation of the garage. Income (loss) from 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.

- 10 -

As of and for the three months	Hotel			Investment
ended September 30, 2015	Operations			Transactions		Other			Total
Revenues	$	15,138,000		$	-	$	-		$	15,138,000
Segment operating expenses		(11,193,000	)		-		(203,000	)		(11,396,000	)
Segment income (loss)		3,945,000			-		(203,000	)		3,742,000
Interest expense - mortgage		(1,941,000	)		-		-			(1,941,000	)
Loss on disposal of assets		(30,000	)		-		-			(30,000	)
Depreciation and amortization expense		(713,000	)		-		-			(713,000	)
Income from investments		-			55,000		-			55,000
Incomt tax expense		-			-		(443,000	)		(443,000	)
Net income (loss)	$	1,261,000		$	55,000	$	(646,000	)	$	670,000
Total assets	$	46,672,000		$	6,272,000	$	9,388,000		$	62,332,000

As of and for the three months	Hotel			Investment
ended September 30, 2014	Operations			Transactions			Other			Total
Revenues	$	14,830,000		$	-		$	-		$	14,830,000
Segment operating expenses		(11,838,000	)		-			(188,000	)		(12,026,000	)
Segment income (loss)		2,992,000			-			(188,000	)		2,804,000
Interest expense - mortgage		(2,024,000	)		-			-			(2,024,000	)
Depreciation and amortization expense		(642,000	)		-			-			(642,000	)
Loss from investments		-			(592,000	)		-			(592,000	)
Income tax benefit		-			-			182,000			182,000
Net income (loss)	$	326,000		$	(592,000	)	$	(6,000	)	$	(272,000	)
Total assets	$	35,061,000		$	7,857,000		$	37,416,000		$	80,334,000

NOTE 7 - RELATED PARTY TRANSACTIONS

Certain shared costs and expenses, primarily administrative expenses, rent and insurance are allocated among the Company, the Company’s parent, Santa Fe and InterGroup, the parent of Santa Fe, based on management's estimate of the pro rata utilization of resources. For the three months ended September 30, 2015 and 2014, these expenses were approximately $18,000 for each respective period.

During the three months ended September 30, 2015 and 2014, the Company received management fees from Justice Investors totaling $163,000 and $140,000, respectively. These fees were 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 September 30, 2015, $400,000 of these fees remain 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, Santa Fe, and InterGroup.  Depending on certain market conditions and various risk factors, the Chief Executive Officer, Santa Fe and InterGroup may, at times, invest in the same companies in which the Company invests.  The Company encourages such investments because it places personal resources of the Chief Executive Officer and the resources of Santa Fe and InterGroup, at risk in connection with investment decisions made on behalf of the Company. 

- 11 -

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

The Company's principal business is conducted through its general and limited partnership interest in the Justice Investors limited partnership (“Justice” or the “Partnership”). 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 License Agreement through 2030, modified the monthly royalty rate, extended geographic protection to the Partnership and also provided the Partnership certain key money cash incentives to be earned through 2030. The key money cash incentives were received on July 1, 2015.

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.

Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014

The Company had a net income of $670,000 for the three months ended September 30, 2015 compared to a net loss of $272,000 for the three months ended September 30, 2014. The net income generated in current quarter is primarily attributable to the increased income from hotel operations and to a lesser extent, net gains from the Company’s investment activities.

- 12 -

The Company had net income from hotel operations of $1,261,000 for the three months ended September 30, 2015, compared to a net income of $326,000 for the three months ended September 30, 2014. Hotel revenues increased during the current quarter, while operating expenses increased by a lower percentage relative to the increase in revenues.

The following table sets forth a more detailed presentation of Hotel operations for the three months ended September 30, 2015 and 2014.

For the three months ended September 30,	2015			2014
Hotel revenues:
Hotel rooms	$	12,607,000		$	12,344,000
Food and beverage		1,650,000			1,573,000
Garage		685,000			697,000
Other operating departments		196,000			216,000
Total hotel revenues		15,138,000			14,830,000
Operating expenses, excluding loss on disposal of assets, depreciation and amortization		(11,193,000	)		(11,838,000	)
Operating income before loss on disposal of assets, interest and depreciation and amortization		3,945,000			2,992,000
Loss on disposal of assets		(30,000	)		-
Interest expense - mortgage		(1,941,000	)		(2,024,000	)
Depreciation and amortization expense		(713,000	)		(642,000	)
Net income from Hotel operations	$	1,261,000		$	326,000

For the three months ended September 30, 2015, the Hotel generated operating income of $3,945,000 before the loss on disposal of assets and interest and depreciation and amortization on total operating revenues of $15,138,000 compared to operating income of $2,992,000 before the loss on disposal of assets and interest and depreciation and amortization on total operating revenues of $14,830,000 for the three months ended September 30, 2014.  Room revenues increased by $263,000 for the three months ended September 30, 2015 compared to the three months ended September 30, 2014 primarily as the result of higher room rates.  Food and beverage revenue also increased by $77,000 as the result of the increase in room service and wine bar revenue during the current period.    

Operating expenses decreased by $645,000 compared to the prior period primarily due to royalty fees reduction per the new Hilton franchise agreement.  Legal expenses also 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 September 30, 2015 and 2014.

Three Months Ended September 30,	Average Daily Rate		Average Occupancy %			RevPAR
2015	$	265		95	%	$	252
2014	$	258		96	%	$	247

The Hotel’s revenues increased by 2.1% quarter over quarter same time last year. Average daily rate increased by $7 for the three months ended September 30, 2015 compared to the three months ended September 30, 2014. As a result, the Hotel was able to achieve a RevPAR number that was $5 higher than the comparative three month period. 

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. For the quarter, our loyalty score improved by one point percentage. This was achieved due 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. The carpet flooring in the lobby was replaced by oak wood, creating an open and welcoming environment. The furniture in the lobby, the porte cochere, and the second floor have been modernized. The third floor carpets and doors have been replaced. The Wellness Center on the fifth floor features a new spa with two treatment rooms and a room for manicure and pedicure. The fitness center has been expanded with state of the art equipment.

- 13 -

In order to further enhance the client experience, the Hotel plans to renovate the fourth floor meeting rooms to make a state of the art meeting space. The fourth floor bathrooms will also be renovated. In the guest rooms, the bathrooms will be remodeled with modern shower amenities, and the desk tables and the night stands will be updated with granite tops for a sleek and modern look.  And 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.

The Company had a net gain on marketable securities of $104,000 for the three months ended September 30, 2015 compared to a net loss on marketable securities of $479,000 for the three months ended September 30, 2014. Approximately $94,000 of the $104,000 net gain is related to the Company’s investment in the common stock of Comstock. Such investments represent approximately 95% of the Company’s portfolio as of September 30, 2015. For the three months ended September 30, 2015, the Company had a net realized loss of $25,000 and a net unrealized gain of $129,000. For the three months ended September 30, 2014, the Company had a net realized gain of $43,000 and a net unrealized loss of $522,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. For a more detailed description of the composition of the Company’s marketable securities see the Marketable Securities section below.

The Company consolidates Justice (Hotel) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel.  The income tax (expense) benefit during the three months ended September 30, 2015 and 2014 represents the income tax effect on the Company’s pretax income (loss) which includes its share in net income (loss) of the Hotel.

MARKETABLE SECURITIES

As of September 30, 2015 and June 30, 2015, the Company had investments in marketable equity securities of $5,697,000 and $1,301,000, respectively. The following table shows the composition of the Company’s marketable securities portfolio by selected industry groups as:

As of September 30, 2015			% of Total
			Investment
Industry Group	Fair Value		Securities
Basic materials	$	5,422,000		95.1	%
Other		275,000		4.9	%
	$	5,697,000		100.0	%

As of June 30, 2015			% of Total
			Investment
Industry Group	Fair Value		Securities
Basic materials	$	926,000		71.2	%
Other		375,000		28.8	%
	$	1,301,000		100.0	%

- 14 -

The Company’s investment in marketable securities portfolio consists primarily of (95.1%) 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 $4,410,000 (4,410 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.

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel operations, and general partner management fees and limited partnership distributions from the Partnership. The Company also receives cash generated from the investment of its cash and 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.

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.

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

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

- 15 -

MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary as of September 30, 2015, the Company’s material financial obligations which also including interest payments.

			9 Months		Year		Year		Year		Year
	Total		2016		2017		2018		2019		2020		Thereafter
Mortgage and subordinated notes payable	$	117,000,000	$	-	$	672,000	$	1,398,000	$	1,473,000	$	1,553,000	$	111,904,000
Other notes payable		9,031,000		395,000		4,723,000		406,000		362,000		362,000		2,783,000
Interest		47,657,000		5,663,000		7,281,000		6,560,000		5,979,000		5,451,000		16,723,000
Total	$	173,688,000	$	6,058,000	$	12,676,000	$	8,364,000	$	7,814,000	$	7,366,000	$	131,410,000

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no material off balance sheet arrangements.

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.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

Critical accounting policies are those that are most significant to the portrayal of our financial position and results of operations and require judgments by management in order to make estimates about the effect of matters that are inherently uncertain. The preparation of these 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 three months September 30, 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.

- 16 -

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 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.

		PORTSMOUTH SQUARE, INC.
		(Registrant)
Date: October 29, 2015	by	/s/ John V. Winfield
		John V. Winfield, President,
		Chairman of the Board and
		Chief Executive Officer
Date: October 29, 2015	by	/s/ Geoffrey M. Palermo
		Assistant Secretary
Date: October 29, 2015	by	/s/ David T. Nguyen
		David T. Nguyen, Treasurer
		and Controller

- 17 -

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 Portsmouth Square, Inc.;

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: October 29, 2015

/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 Portsmouth Square, Inc.;

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: October 29, 2015

/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 Portsmouth Square, Inc. (the "Company") on Form 10-Q for the quarterly period ended September 30, 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: October 29, 2015

A signed original of this written statement required by Section 906 has been provided to Portsmouth Square, Inc. and will be retained by Portsmouth Square, Inc. 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 Portsmouth Square, Inc. (the "Company") on Form 10-Q for the quarterly period ended September 30, 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: October 29, 2015

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

XML

OTHER INVESTMENTS, NET (Details Textual) - Comstock Mining, Inc [Member]	Jun. 30, 2015 USD ($) shares
Other Investments [Line Items]
Preferred Stock, Value, Issued | $	$ 4,410,000
Preferred Stock, Shares Issued	4,410

XML

OTHER INVESTMENTS, NET

3 Months Ended

Sep. 30, 2015

Investments, All Other Investments [Abstract]

Other Investments Disclosure [Text Block]

NOTE 4 – 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	September 30, 2015		June 30, 2015
Preferred stock - Comstock, at cost	$	-	$	4,410,000
Private equity hedge fund, at cost		456,000		456,000
Other preferred stock		102,000		112,000
Warrants - at fair value		17,000		25,000
	$	575,000	$	5,003,000

As of June 30, 2015, the Company had $4,410,000 (4,410 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”.

XML

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
Segment Reporting Information [Line Items]
Revenues	$ 15,138,000	$ 14,830,000
Segment operating expenses	(11,396,000)	(12,026,000)
Segment income (loss)	3,029,000	2,162,000
Interest expense - mortgage	(1,941,000)	(2,024,000)
Loss on disposal of assets	(30,000)	0
Depreciation and amortization expense	(713,000)	(642,000)
Income from investments	55,000	(592,000)
Incomt tax expense	(443,000)	182,000
Net income (loss)	670,000	(272,000)
Total assets	62,332,000	80,334,000	$ 64,049,000
Hotel Operations [Member]
Segment Reporting Information [Line Items]
Revenues	15,138,000	14,830,000
Segment operating expenses	(11,193,000)	(11,838,000)
Segment income (loss)	3,945,000	2,992,000
Interest expense - mortgage	(1,941,000)	(2,024,000)
Loss on disposal of assets	(30,000)
Depreciation and amortization expense	(713,000)	(642,000)
Income from investments	0	0
Incomt tax expense	0	0
Net income (loss)	1,261,000	326,000
Total assets	46,672,000	35,061,000
Investment Transactions [Member]
Segment Reporting Information [Line Items]
Revenues	0	0
Segment operating expenses	0	0
Segment income (loss)	0	0
Interest expense - mortgage	0	0
Loss on disposal of assets	0
Depreciation and amortization expense	0	0
Income from investments	55,000	(592,000)
Incomt tax expense	0	0
Net income (loss)	55,000	(592,000)
Total assets	6,272,000	7,857,000
Other [Member]
Segment Reporting Information [Line Items]
Revenues	0	0
Segment operating expenses	(203,000)	(188,000)
Segment income (loss)	(203,000)	(188,000)
Interest expense - mortgage	0	0
Loss on disposal of assets	0
Depreciation and amortization expense	0	0
Income from investments	0	0
Incomt tax expense	(443,000)	182,000
Net income (loss)	(646,000)	(6,000)
Total assets	$ 9,388,000	$ 37,416,000

XML

FAIR VALUE MEASUREMENTS (Details Textual)	3 Months Ended
	Sep. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other investments in nonmarketable securities Ownership Percentage	less than 20%

XML

RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Payment for Management Fee	$ 1,550,000
Costs and Expenses, Related Party	18,000	$ 18,000
Management Fee Payable	400,000
Justice [Member]
Related Party Transaction [Line Items]
Management Fees Revenue	$ 163,000	$ 140,000

XML

INVESTMENT IN MARKETABLE SECURITIES

3 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

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

NOTE 3 - INVESTMENT IN MARKETABLE SECURITIES

The Company’s investment in marketable securities consists primarily of corporate equities. The Company has also 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 September 30, 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 September 30, 2015
Corporate
Equities	$	6,277,000	$	359,000	$	(939,000)	$	(580,000)	$	5,697,000
As of June 30, 2015
Corporate
Equities	$	2,009,000	$	240,000	$	(948,000)	$	(708,000)	$	1,301,000

As of September 30, 2015, approximately 95% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining, Inc.

As of September 30, 2015 and June 30, 2015, the Company had $935,000 and $940,000, respectively, of unrealized losses related to securities held for over one year.

 

Net gain (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 three months September 30, 2015 and 2014, respectively.

For the three months ended September 30,	2015		2014
Realized (loss) gain on marketable securities	$	(25,000)	$	43,000
Unrealized gain (loss) on marketable securities		129,000		(522,000)
Net gain (loss) on marketable securities	$	104,000	$	(479,000)

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Jun. 30, 2015
ASSETS
Investment in Hotel, net	$ 37,068,000	$ 36,567,000
Investment in real estate	973,000	973,000
Investment in marketable securities	5,697,000	1,301,000
Other investments, net	575,000	5,003,000
Cash and cash equivalents	3,814,000	1,077,000
Restricted cash - mortgage impounds	844,000	587,000
Accounts receivable - Hotel, net	2,229,000	6,791,000
Other assets, net	3,224,000	3,399,000
Deferred tax asset	7,908,000	8,351,000
Total assets	62,332,000	64,049,000
Liabilities:
Accounts payable and other liabilities	12,359,000	14,622,000
Related party and other notes payable	9,031,000	9,155,000
Mortgage notes payable - Hotel	117,000,000	117,000,000
Total liabilities	$ 138,390,000	$ 140,777,000
Commitments and contingencies
Shareholders' deficit:
Common stock, no par value: Authorized shares - 750,000; 734,183 shares issued and outstanding shares	$ 2,092,000	$ 2,092,000
Accumulated deficit	(71,928,000)	(72,523,000)
Total Portsmouth shareholders' deficit	(69,836,000)	(70,431,000)
Noncontrolling interest	(6,222,000)	(6,297,000)
Total shareholders' deficit	(76,058,000)	(76,728,000)
Total liabilities and shareholders' deficit	$ 62,332,000	$ 64,049,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements included herein have been prepared by Portsmouth Square, Inc. (“Portsmouth” 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 Portsmouth 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 months ended September 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2016.

For the three months ended September 30, 2015 and 2014, the Company had no components of comprehensive income other than net income itself.

As of September 30, 2015, Santa Fe Financial Corporation (“Santa Fe”), a public company, owns approximately 68.8% of the outstanding common shares of Portsmouth Square, Inc. (“Portsmouth” or the “Company”). Santa Fe is an 81.7%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.1% of the common stock of Portsmouth.

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.

Justice, through its subsidiaries Justice Holdings Company, LLC (“Holdings”), a Delaware Limited Liability Company, Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”), 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 a 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. 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 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.

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.

Basic income (loss) per share is calculated based upon the weighted average number of common shares outstanding during each period. During the three months September 30, 2015 and 2014, the Company did not have any potentially dilutive securities outstanding.

Recently Issued Accounting Pronouncements

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.

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.

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INVESTMENT IN MARKETABLE SECURITIES (Details 1) - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Schedule of Trading Securities and Other Trading Assets [Line Items]
Realized (loss) gain on marketable securities	$ (25,000)	$ 43,000
Unrealized gain (loss) on marketable securities	129,000	(522,000)
Net gain (loss) on marketable securities	$ 104,000	$ (479,000)

XML

OTHER INVESTMENTS, NET (Details) - USD ($)	Sep. 30, 2015	Jun. 30, 2015
Other Investments [Line Items]
Other investments, net	$ 575,000	$ 5,003,000
Preferred Stock - Comstock, At Cost [Member]
Other Investments [Line Items]
Other investments, net	0	4,410,000
Private Equity Hedge Fund , At Cost [Member]
Other Investments [Line Items]
Other investments, net	456,000	456,000
Other preferred stock [Member]
Other Investments [Line Items]
Other investments, net	102,000	112,000
Warrants - at fair value [Member]
Other Investments [Line Items]
Other investments, net	$ 17,000	$ 25,000

XML

INVESTMENT IN HOTEL, NET

3 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 2 – INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

			Accumulated		Net Book
September 30, 2015	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		26,197,000		(21,965,000)		4,232,000
Building and improvements		54,502,000		(22,790,000)		31,712,000
	$	81,823,000	$	(44,755,000)	$	37,068,000

			Accumulated		Net Book
June 30, 2015	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		25,958,000		(21,605,000)		4,353,000
Building and improvements		53,641,000		(22,551,000)		31,090,000
	$	80,723,000	$	(44,156,000)	$	36,567,000

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Sep. 30, 2015	Jun. 30, 2015
Common Stock, No Par Value	$ 0	$ 0
Common stock, shares authorized	750,000	750,000
Common stock, shares issued	734,183	734,183
Common stock , shares outstanding	734,183	734,183

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Sep. 30, 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 September 30, 2015
Assets:	Level 1		Level 2		Level 3		Total
Other investments - warrants	$	-	$	-	$	17,000	$	17,000
Investment in marketable securities:
Basic materials		5,422,000		-		-		5,422,000
Other		275,000		-		-		275,000
		5,697,000		-		-		5,697,000
	$	5,697,000	$	-	$	17,000	$	5,714,000

As of June 30, 2015
Assets:	Level 1		Level 2		Level 3		Total
Other investments - warrants	$	-	$	-	$	25,000	$	25,000
Investment in marketable securities:
Basic materials		926,000		-		-		926,000
Other		375,000		-		-		375,000
		1,301,000		-		-		1,301,000
	$	1,301,000	$	-	$	25,000	$	1,326,000

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [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 three months
Assets	Level 1		Level 2		Level 3		September 30, 2015		ended September 30, 2015
Other non-marketable investments	$	-	$	-	$	558,000	$	558,000	$	-

									Net loss for the three months
Assets	Level 1		Level 2		Level 3		June 30, 2015		ended September 30, 2014
Other non-marketable investments	$	-	$	-	$	4,978,000	$	4,978,000	$	-

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Document And Entity Information - shares	3 Months Ended
	Sep. 30, 2015	Oct. 09, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Registrant Name	PORTSMOUTH SQUARE INC
Entity Central Index Key	0000079661
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	PRSI
Entity Common Stock, Shares Outstanding		734,183

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SEGMENT INFORMATION (Tables)

3 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

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

Information below represents reporting segments for the three months September 30, 2015 and 2014, respectively. Operating income from Hotel operations consists of the operation of the hotel and operation of the garage. Income (loss) from 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		Investment
ended September 30, 2015	Operations		Transactions		Other		Total
Revenues	$	15,138,000	$	-	$	-	$	15,138,000
Segment operating expenses		(11,193,000)		-		(203,000)		(11,396,000)
Segment income (loss)		3,945,000		-		(203,000)		3,742,000
Interest expense - mortgage		(1,941,000)		-		-		(1,941,000)
Loss on disposal of assets		(30,000)		-		-		(30,000)
Depreciation and amortization expense		(713,000)		-		-		(713,000)
Income from investments		-		55,000		-		55,000
Incomt tax expense		-		-		(443,000)		(443,000)
Net income (loss)	$	1,261,000	$	55,000	$	(646,000)	$	670,000
Total assets	$	46,672,000	$	6,272,000	$	9,388,000	$	62,332,000

As of and for the three months	Hotel		Investment
ended September 30, 2014	Operations		Transactions		Other		Total
Revenues	$	14,830,000	$	-	$	-	$	14,830,000
Segment operating expenses		(11,838,000)		-		(188,000)		(12,026,000)
Segment income (loss)		2,992,000		-		(188,000)		2,804,000
Interest expense - mortgage		(2,024,000)		-		-		(2,024,000)
Depreciation and amortization expense		(642,000)		-		-		(642,000)
Loss from investments		-		(592,000)		-		(592,000)
Income tax benefit		-		-		182,000		182,000
Net income (loss)	$	326,000	$	(592,000)	$	(6,000)	$	(272,000)
Total assets	$	35,061,000	$	7,857,000	$	37,416,000	$	80,334,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Revenue - Hotel	$ 15,138,000	$ 14,830,000
Costs and operating expenses
Hotel operating expenses	(11,193,000)	(11,838,000)
Hotel depreciation and amortization expense	(713,000)	(642,000)
General and administrative expense	(203,000)	(188,000)
Total costs and operating expenses	(12,109,000)	(12,668,000)
Income from operations	3,029,000	2,162,000
Other income (expense)
Interest expense - mortgage	(1,941,000)	(2,024,000)
Loss on disposal of assets	(30,000)	0
Net gain (loss) on marketable securities	104,000	(479,000)
Net unrealized loss on other investments	(19,000)	(25,000)
Dividend and interest income	2,000	3,000
Trading and margin interest expense	(32,000)	(91,000)
Other expense, net	(1,916,000)	(2,616,000)
Income (loss) before income taxes	1,113,000	(454,000)
Income tax (expense) benefit	(443,000)	182,000
Net income (loss)	670,000	(272,000)
Less: Net loss attributable to the noncontrolling interest	(75,000)	(13,000)
Net income (loss) attributable to Portsmouth	$ 595,000	$ (285,000)
Basic and diluted net income (loss) per share attributable to Portsmouth (in dollars per share)	$ 0.81	$ (0.39)
Weighted average number of common shares outstanding - basic and diluted (in shares)	734,183	734,183

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RELATED PARTY TRANSACTIONS

3 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 7 - RELATED PARTY TRANSACTIONS

Certain shared costs and expenses, primarily administrative expenses, rent and insurance are allocated among the Company, the Company’s parent, Santa Fe and InterGroup, the parent of Santa Fe, based on management's estimate of the pro rata utilization of resources. For the three months ended September 30, 2015 and 2014, these expenses were approximately $18,000 for each respective period.

During the three months ended September 30, 2015 and 2014, the Company received management fees from Justice Investors totaling $163,000 and $140,000, respectively. These fees were 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 September 30, 2015, $400,000 of these fees remain 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, Santa Fe, and InterGroup. Depending on certain market conditions and various risk factors, the Chief Executive Officer, Santa Fe and InterGroup may, at times, invest in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of the Chief Executive Officer and the resources of Santa Fe and InterGroup, at risk in connection with investment decisions made on behalf of the Company.

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SEGMENT INFORMATION

3 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 6 - SEGMENT INFORMATION

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

Information below represents reporting segments for the three months September 30, 2015 and 2014, respectively. Operating income from Hotel operations consists of the operation of the hotel and operation of the garage. Income (loss) from 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		Investment
ended September 30, 2015	Operations		Transactions		Other		Total
Revenues	$	15,138,000	$	-	$	-	$	15,138,000
Segment operating expenses		(11,193,000)		-		(203,000)		(11,396,000)
Segment income (loss)		3,945,000		-		(203,000)		3,742,000
Interest expense - mortgage		(1,941,000)		-		-		(1,941,000)
Loss on disposal of assets		(30,000)		-		-		(30,000)
Depreciation and amortization expense		(713,000)		-		-		(713,000)
Income from investments		-		55,000		-		55,000
Incomt tax expense		-		-		(443,000)		(443,000)
Net income (loss)	$	1,261,000	$	55,000	$	(646,000)	$	670,000
Total assets	$	46,672,000	$	6,272,000	$	9,388,000	$	62,332,000

As of and for the three months	Hotel		Investment
ended September 30, 2014	Operations		Transactions		Other		Total
Revenues	$	14,830,000	$	-	$	-	$	14,830,000
Segment operating expenses		(11,838,000)		-		(188,000)		(12,026,000)
Segment income (loss)		2,992,000		-		(188,000)		2,804,000
Interest expense - mortgage		(2,024,000)		-		-		(2,024,000)
Depreciation and amortization expense		(642,000)		-		-		(642,000)
Loss from investments		-		(592,000)		-		(592,000)
Income tax benefit		-		-		182,000		182,000
Net income (loss)	$	326,000	$	(592,000)	$	(6,000)	$	(272,000)
Total assets	$	35,061,000	$	7,857,000	$	37,416,000	$	80,334,000

XML

INVESTMENT IN MARKETABLE SECURITIES (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2015	Jun. 30, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Loss	$ 935,000	$ 940,000
Comstock Mining, Inc [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Percentage of Investment Marketable Securities	95.00%

XML

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	3 Months Ended
	Sep. 30, 2015
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Management Services Agreement Term	3 years
Inter Group Corporation [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	13.10%
Portsmouth [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent	68.80%
Justice Investors [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	93.00%
Subsidiary Of Inter Group [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent	81.70%

XML

INVESTMENT IN MARKETABLE SECURITIES (Tables)

3 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Table Text Block]

Trading securities are summarized as follows:

			Gross		Gross		Net		Fair
Investment	Cost		Unrealized Gain		Unrealized Loss		Unrealized Gain (Loss)		Value
As of September 30, 2015
Corporate
Equities	$	6,277,000	$	359,000	$	(939,000)	$	(580,000)	$	5,697,000
As of June 30, 2015
Corporate
Equities	$	2,009,000	$	240,000	$	(948,000)	$	(708,000)	$	1,301,000

Gain (Loss) on Investments [Table Text Block]

Below is the composition of the two components for the three months September 30, 2015 and 2014, respectively.

For the three months ended September 30,	2015		2014
Realized (loss) gain on marketable securities	$	(25,000)	$	43,000
Unrealized gain (loss) on marketable securities		129,000		(522,000)
Net gain (loss) on marketable securities	$	104,000	$	(479,000)

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

The condensed consolidated financial statements included herein have been prepared by Portsmouth Square, Inc. (“Portsmouth” 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 Portsmouth 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 months ended September 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2016.

For the three months ended September 30, 2015 and 2014, the Company had no components of comprehensive income other than net income itself.

As of September 30, 2015, Santa Fe Financial Corporation (“Santa Fe”), a public company, owns approximately 68.8% of the outstanding common shares of Portsmouth Square, Inc. (“Portsmouth” or the “Company”). Santa Fe is an 81.7%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.1% of the common stock of Portsmouth.

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.

Justice, through its subsidiaries Justice Holdings Company, LLC (“Holdings”), a Delaware Limited Liability Company, Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”), 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 a 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. 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 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.

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.

Basic income (loss) per share is calculated based upon the weighted average number of common shares outstanding during each period. During the three months September 30, 2015 and 2014, the Company did not have any potentially dilutive securities outstanding.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

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.

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.

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INVESTMENT IN HOTEL, NET (Tables)

3 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Investment in hotel consisted of the following as of:

			Accumulated		Net Book
September 30, 2015	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		26,197,000		(21,965,000)		4,232,000
Building and improvements		54,502,000		(22,790,000)		31,712,000
	$	81,823,000	$	(44,755,000)	$	37,068,000

			Accumulated		Net Book
June 30, 2015	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		25,958,000		(21,605,000)		4,353,000
Building and improvements		53,641,000		(22,551,000)		31,090,000
	$	80,723,000	$	(44,156,000)	$	36,567,000

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OTHER INVESTMENTS, NET (Tables)

3 Months Ended

Sep. 30, 2015

Investments, All Other Investments [Abstract]

Other Investments Not Readily Marketable [Table Text Block]

Other investments, net consist of the following:

Type	September 30, 2015		June 30, 2015
Preferred stock - Comstock, at cost	$	-	$	4,410,000
Private equity hedge fund, at cost		456,000		456,000
Other preferred stock		102,000		112,000
Warrants - at fair value		17,000		25,000
	$	575,000	$	5,003,000

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INVESTMENT IN MARKETABLE SECURITIES (Details) - USD ($)	3 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net Unrealized Gain (Loss)	$ 129,000	$ (522,000)
Fair Value	5,697,000		$ 1,301,000
Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Cost	6,277,000		2,009,000
Gross Unrealized Gain	359,000		240,000
Gross Unrealized Loss	(939,000)		(948,000)
Net Unrealized Gain (Loss)	(580,000)		(708,000)
Fair Value	$ 5,697,000		$ 1,301,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Sep. 30, 2015	Jun. 30, 2015
Assets:
Investment in marketable securities	$ 5,697,000	$ 1,301,000
Fair Value, Measurements, Recurring [Member]
Assets:
Other investments - warrants	17,000	25,000
Investment in marketable securities	5,697,000	1,301,000
Assets, Fair Value Disclosure	5,714,000	1,326,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Other investments - warrants	0	0
Investment in marketable securities	5,697,000	1,301,000
Assets, Fair Value Disclosure	5,697,000	1,301,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Other investments - warrants	0	0
Investment in marketable securities	0	0
Assets, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Other investments - warrants	17,000	25,000
Investment in marketable securities	0	0
Assets, Fair Value Disclosure	17,000	25,000
Fair Value, Measurements, Recurring [Member] | Basic Materials [Member]
Assets:
Investment in marketable securities	5,422,000	926,000
Fair Value, Measurements, Recurring [Member] | Basic Materials [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Investment in marketable securities	5,422,000	926,000
Fair Value, Measurements, Recurring [Member] | Basic Materials [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Investment in marketable securities	0	0
Fair Value, Measurements, Recurring [Member] | Basic Materials [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Investment in marketable securities	0	0
Fair Value, Measurements, Recurring [Member] | Other [Member]
Assets:
Investment in marketable securities	275,000	375,000
Fair Value, Measurements, Recurring [Member] | Other [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Investment in marketable securities	275,000	375,000
Fair Value, Measurements, Recurring [Member] | Other [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Investment in marketable securities	0	0
Fair Value, Measurements, Recurring [Member] | Other [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Investment in marketable securities	$ 0	$ 0

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CONDENDSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ 670,000	$ (272,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Net unrealized (gain) loss on marketable securities	(129,000)	522,000
Unrealized loss on other investments	19,000	25,000
Loss on disposal of assets	30,000	0
Depreciation and amortization	713,000	642,000
Changes in assets and liabilities:
Investment in marketable securities	142,000	173,000
Accounts receivable	4,562,000	(383,000)
Other assets	222,000	339,000
Accounts payable and other liabilities	(2,263,000)	(3,333,000)
Due to securities broker	0	(629,000)
Obligations for securities sold	0	670,000
Deferred tax asset	443,000	(182,000)
Net cash provided by (used in) operating activities	4,409,000	(2,428,000)
Cash flows from investing activities:
Payments for hotel furniture, equipment and building improvements	(1,291,000)	(1,314,000)
Net cash provided used in investing activities	(1,291,000)	(1,314,000)
Cash flows from financing activities:
Restricted cash - (payments to) withdrawal of mortgage impounds, net	(257,000)	98,000
Net (payments) proceeds from mortgage and other notes payable	(124,000)	4,360,000
Net cash (used in) provided by financing activities	(381,000)	4,458,000
Net increase in cash and cash equivalents	2,737,000	716,000
Cash and cash equivalents at the beginning of the period	1,077,000	1,058,000
Cash and cash equivalents at the end of the period	3,814,000	1,774,000
Supplemental information:
Interest paid	1,941,000	2,038,000
Non-cash transaction:
Conversion of other investments to marketable securities	$ 4,410,000	$ 0

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FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 5 - 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) 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 September 30, 2015
Assets:	Level 1		Level 2		Level 3		Total
Other investments - warrants	$	-	$	-	$	17,000	$	17,000
Investment in marketable securities:
Basic materials		5,422,000		-		-		5,422,000
Other		275,000		-		-		275,000
		5,697,000		-		-		5,697,000
	$	5,697,000	$	-	$	17,000	$	5,714,000

As of June 30, 2015
Assets:	Level 1		Level 2		Level 3		Total
Other investments - warrants	$	-	$	-	$	25,000	$	25,000
Investment in marketable securities:
Basic materials		926,000		-		-		926,000
Other		375,000		-		-		375,000
		1,301,000		-		-		1,301,000
	$	1,301,000	$	-	$	25,000	$	1,326,000

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, net (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 three months
Assets	Level 1		Level 2		Level 3		September 30, 2015		ended September 30, 2015
Other non-marketable investments	$	-	$	-	$	558,000	$	558,000	$	-

									Net loss for the three months
Assets	Level 1		Level 2		Level 3		June 30, 2015		ended September 30, 2014
Other non-marketable investments	$	-	$	-	$	4,978,000	$	4,978,000	$	-

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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FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	$ 558,000		$ 4,978,000
Net loss for the year	0	$ 0
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	0		0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	$ 558,000		$ 4,978,000

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INVESTMENT IN HOTEL, NET (Details) - USD ($)	Sep. 30, 2015	Jun. 30, 2015
Property, Plant and Equipment [Line Items]
Net Book Value	$ 37,068,000	$ 36,567,000
Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	81,823,000	80,723,000
Accumulated Depreciation	(44,755,000)	(44,156,000)
Net Book Value	37,068,000	36,567,000
Land [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	1,124,000	1,124,000
Accumulated Depreciation	0	0
Net Book Value	1,124,000	1,124,000
Furniture and Equipment [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	26,197,000	25,958,000
Accumulated Depreciation	(21,965,000)	(21,605,000)
Net Book Value	4,232,000	4,353,000
Building and Improvements [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	54,502,000	53,641,000
Accumulated Depreciation	(22,790,000)	(22,551,000)
Net Book Value	$ 31,712,000	$ 31,090,000