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, 2017

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.)

1100 Glendon Avenue, PH1, 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
	Emerging growth company ¨

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

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

¨ Yes   x No

The number of shares outstanding of registrant’s Common Stock, as of November 6, 2017, was 734,183.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Consolidated Balance Sheets as of September 30, 2017 (Unaudited) and June 30, 2017.	3
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months ended September 30, 2017 and 2016.	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months ended September 30, 2017 and 2016.	5
Item 2.	Legal Proceedings	13
Item 3.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13
Item 4.	Controls and Procedures.	18
	PART II – OTHER INFORMATION
Item 5.	Exhibits.	19
Signatures		19

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PART 1

FINANCIAL INFORMATION

Item 1 – Condensed Consolidated Financial Statements

PORTSMOUTH SQUARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
As of	September 30, 2017			June 30, 2017
ASSETS
Investment in Hotel, net	$	34,607,000		$	35,213,000
Investment in real estate, net		973,000			973,000
Investment in marketable securities		3,286,000			3,861,000
Other investments, net		389,000			389,000
Cash and cash equivalents		1,531,000			2,049,000
Restricted cash		5,534,000			5,111,000
Accounts receivable - Hotel, net		2,624,000			1,436,000
Other assets, net		679,000			867,000
Deferred income taxes		10,665,000			10,927,000
Total assets	$	60,288,000		$	60,826,000
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Accounts payable and other liabilities	$	14,765,000		$	15,085,000
Due to securities broker		393,000			592,000
Obligations for securities sold		807,000			867,000
Related party and other notes payable		10,129,000			10,209,000
Mortgage notes payable - Hotel, net		115,329,000			115,615,000
Total liabilities		141,423,000			142,368,000
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		(76,786,000	)		(77,120,000	)
Total Portsmouth shareholders' deficit		(74,694,000	)		(75,028,000	)
Noncontrolling interest		(6,441,000	)		(6,514,000	)
Total shareholders' deficit		(81,135,000	)		(81,542,000	)
Total liabilities and shareholders' deficit	$	60,288,000		$	60,826,000

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

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PORTSMOUTH SQUARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the three months ended September 30,	2017			2016
Revenue - Hotel	$	14,437,000		$	14,605,000
Costs and operating expenses
Hotel operating expenses		(10,589,000	)		(10,256,000	)
Hotel depreciation and amortization expense		(649,000	)		(664,000	)
General and administrative expense		(198,000	)		(154,000	)
Total costs and operating expenses		(11,436,000	)		(11,074,000	)
Income from operations		3,001,000			3,531,000
Other income (expense)
Interest expense - mortgage		(1,987,000	)		(1,988,000	)
Net (Loss) gain on marketable securities		(304,000	)		262,000
Impairment loss on other investments		-			(5,000	)
Dividend and interest income		11,000			10,000
Trading and margin interest expense		(52,000	)		(33,000	)
Other expense, net		(2,332,000	)		(1,754,000	)
Income before income taxes		669,000			1,777,000
Income tax expense		(262,000	)		(705,000	)
Net Income		407,000			1,072,000
Less: Net income attributable to the noncontrolling interest		(73,000	)		(107,000	)
Net income attributable to Portsmouth Square, Inc.	$	334,000		$	965,000
Basic and diluted net income per share attributable to Portsmouth Square, Inc.	$	0.45		$	1.31
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.

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PORTSMOUTH SQUARE, INC.

CONDENDSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the three months ended September 30,	2017			2016
Cash flows from operating activities:
Net income	$	407,000		$	1,072,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Net unrealized (loss) gain on marketable securities		290,000			(211,000	)
Impairment loss on other investments		-			5,000
Depreciation		649,000			636,000
Amortization of loan costs		28,000			28,000
Deferred tax asset		262,000			705,000
Changes in operating assets and liabilities:
Investment in marketable securities		285,000			(640,000	)
Accounts receivable		(1,188,000	)		206,000
Other assets		188,000			327,000
Accounts payable and other liabilities		(320,000	)		(3,144,000	)
Due to securities broker		(199,000	)		250,000
Obligations for securities sold		(60,000	)		339,000
Net cash provided by (used in) operating activities		342,000			(427,000	)
Cash flows from investing activities:
Payments for hotel furniture, equipment and building improvements		(43,000	)		(272,000	)
Net cash used in investing activities		(43,000	)		(272,000	)
Cash flows from financing activities:
Payments of mortgage and other notes payable		(394,000	)		(519,000	)
Restricted cash - payments for mortgage impounds, net		(423,000	)		(789,000	)
Net cash used in financing activities		(817,000	)		(1,308,000	)
Net decrease in cash and cash equivalents		(518,000	)		(2,007,000	)
Cash and cash equivalents at the beginning of the period		2,049,000			3,378,000
Cash and cash equivalents at the end of the period	$	1,531,000		$	1,371,000
Supplemental information:
Interest paid	$	2,010,000		$	1,997,000

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

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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, 2017. The June 30, 2017 Condensed Consolidated Balance Sheet was derived from the Company’s Form 10-K for the year ended June 30, 2017.

The results of operations for the three months ended September 30, 2017 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2018.

Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”). Portsmouth has a 93.1% limited partnership interest in Justice and is the sole general partner. The financial statements of Justice are consolidated with those of the Company.

As of September 30, 2017, 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 81.9%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.4% of the common stock of Portsmouth.

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

Justice had a management agreement with Prism Hospitality L.P. (“Prism”) to perform certain management functions for the Hotel. The management agreement with Prism had an original term of ten years, subject to the Partnership’s right to terminate at any time with or without cause. Effective January 2014, the management agreement with Prism was amended by the Partnership to change the nature of the services provided by Prism and the compensation payable to Prism, among other things. Prism’s management agreement was terminated upon its expiration date of February 3, 2017. Effective December 1, 2013, GMP Management, Inc. (“GMP”), a company owned by a Justice limited partner and a related party, also provided management services for the Partnership pursuant to a management services agreement, with a three-year term, subject to the Partnership’s right to terminate earlier for cause. In June 2016, GMP resigned. On February 1, 2017, Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of the HMA is for an initial period of ten years commencing on the takeover date and automatically renewals for an additional year not to exceed five years in the aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The $2,000,000 is included in the restricted cash and related party and other notes payable balances in the condensed consolidated balance sheets as of September 30, 2017 and June 30, 2017.

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The parking garage that is part of the Hotel property was managed by Ace Parking pursuant to a contract with the Partnership. The contract was terminated with an effective termination date of October 4, 2016. The Company began managing the parking garage in-house after the termination of Ace Parking. Effective February 3, 2017, Interstate took over the management of the parking garage along with the Hotel.

Due to Securities Broker

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

Obligations for Securities Sold

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

Income Tax

The Company consolidates Justice (“Hotel”) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel.  The income tax expense during the three months ended September 30, 2017 and 2016 represents the income tax effect on the Company’s pretax income which includes its share in the net income of the Hotel.

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel operations. The Company also receives cash generated from the investment of its cash and marketable securities and other investments.

To fund the redemption of limited partnership interests and to repay the prior mortgage of $42,940,000, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan bears an interest rate of 5.275% per annum with interest only payments due thru January 2017. Beginning in February 2017, the loan began to amortize over a thirty-year period thru its maturity date of 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 secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The mezzanine interest only loan 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.

Effective as of May 11, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. Pursuant to the agreement, InterGroup is required to maintain a certain net worth and liquidity. As of September 30, 2017, InterGroup is in compliance with both requirements.

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

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

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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.

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern that requires management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management is required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning after December 15, 2016 and for interim reporting periods thereafter. The Company’s adoption of this ASU did not have a material impact on its consolidated financial statements.

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

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The new revenue recognition standard will be effective for the Company in the first quarter of 2019, with the option to adopt it in the first quarter of 2018. We currently anticipate adopting the new standard effective July 1, 2019. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company currently anticipates adopting the standard using the modified retrospective method. While the Company is still in the process of completing the analysis on the impact this guidance will have on the consolidated financial statements and related disclosures, the Company does not expect the impact to be material.

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NOTE 2 – INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

			Accumulated			Net Book
September 30, 2017	Cost		Depreciation			Value
Land	$	1,124,000	$	-		$	1,124,000
Furniture and equipment		27,830,000		(24,987,000	)		2,843,000
Building and improvements		55,933,000		(25,293,000	)		30,640,000
	$	84,887,000	$	(50,280,000	)	$	34,607,000

			Accumulated			Net Book
June 30, 2017	Cost		Depreciation			Value
Land	$	1,124,000	$	-		$	1,124,000
Furniture and equipment		27,681,000		(24,570,000	)		3,111,000
Building and improvements		55,918,000		(24,940,000	)		30,978,000
	$	84,723,000	$	(49,510,000	)	$	35,213,000

NOTE 3 - INVESTMENT IN MARKETABLE SECURITIES

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

At September 30, 2017 and June 30, 2017, all of the Company’s marketable securities are classified as trading securities. The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:

			Gross		Gross			Net			Fair
Investment	Cost		Unrealized Gain		Unrealized Loss			Unrealized Loss			Value
As of September 30, 2017
Corporate
Equities	$	7,633,000	$	440,000	$	(4,787,000	)	$	(4,347,000	)	$	3,286,000
As of June 30, 2017
Corporate
Equities	$	8,012,000	$	381,000	$	(4,532,000	)	$	(4,151,000	)	$	3,861,000

As of September 30, 2017 and June 30, 2017, approximately 42% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining, Inc.

As of September 30, 2017 and June 30, 2017, the Company had $4,725,000 and $4,494,000, 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, 2017 and 2016, respectively.

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For the three months ended September 30,	2017			2016
Realized gain (loss) on marketable securities	$	(14,000	)	$	51,000
Unrealized gain (loss) on marketable securities		(290,000	)		211,000
Net gain on marketable securities	$	(304,000	)	$	262,000

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, net consist of the following:

Type	September 30, 2017		June 30, 2017
Private equity hedge fund, at cost	$	284,000	$	284,000
Other preferred stock		105,000		105,000
	$	389,000	$	389,000

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, 2017		June 30, 2017
Assets:	Total - Level 1		Total - Level 1
Investment in marketable securities:
Basic materials	$	1,703,000	$	1,816,000
Energy		203,000		411,000
Technology		863,000		918,000
Other		517,000		716,000
	$	3,286,000	$	3,861,000

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

Financial assets that are measured at fair value on a non-recurring basis and are not included in the tables above include “Other investments, 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:

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					Net loss for the three months
Assets	Level 3		September 30, 2017		ended September 30, 2017
Other non-marketable investments	$	389,000	$	389,000	$	-

					Net loss for the three months
Assets	Level 3		June 30, 2017		ended September 30, 2016
Other non-marketable investments	$	389,000	$	389,000	$	(5,000	)

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, 2017 and 2016, 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. The other segment consists of corporate general and administrative expenses and the income tax expense for the entire Company.

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As of and for the three months	Hotel			Investment
ended September 30, 2017	Operations			Transactions			Other			Total
Revenues	$	14,437,000		$	-		$	-		$	14,437,000
Segment operating expenses		(10,589,000	)		-			(198,000	)		(10,787,000	)
Segment income (loss)		3,848,000			-			(198,000	)		3,650,000
Interest expense - mortgage		(1,987,000	)		-			-			(1,987,000	)
Depreciation and amortization expense		(649,000	)		-			-			(649,000	)
Loss from investments		-			(345,000	)		-			(345,000	)
Income tax expense		-			-			(262,000	)		(262,000	)
Net income (loss)	$	1,212,000		$	(345,000	)	$	(460,000	)	$	407,000
Total assets	$	44,792,000		$	3,675,000		$	11,821,000		$	60,288,000

As of and for the three months	Hotel			Investment
ended September 30, 2016	Operations			Transactions		Other			Total
Revenues	$	14,605,000		$	-	$	-		$	14,605,000
Segment operating expenses		(10,256,000	)		-		(154,000	)		(10,410,000	)
Segment income (loss)		4,349,000			-		(154,000	)		4,195,000
Interest expense - mortgage		(1,988,000	)		-		-			(1,988,000	)
Depreciation and amortization expense		(664,000	)		-		-			(664,000	)
Income from investments		-			234,000		-			234,000
Incomt tax expense		-			-		(705,000	)		(705,000	)
Net income (loss)	$	1,697,000		$	234,000	$	(859,000	)	$	1,072,000
Total assets	$	43,958,000		$	5,243,000	$	11,795,000		$	60,996,000

NOTE 7 - RELATED PARTY TRANSACTIONS

On July 2, 2014, the Partnership obtained from InterGroup (a related party) an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The loan was extended to December 31, 2017.

Also included in the balance of related party note payable at September 30, 2017 is the obligation to Hilton (Franchisor) in the form of a self-exhausting, interest free development incentive note which is reduced by approximately $316,000 annually through 2030 by Hilton if the Partnership is still a Franchisee with Hilton. The outstanding balance of the note as of September 30, 2017 and June 30, 2017, was $3,879,000 and $3,958,000, respectively.

On February 1, 2017, Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of 10 years commencing on the takeover date and automatically renews for an additional year not to exceed five years in aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The key money contribution shall be amortized in equal monthly amounts over an eight (8) year period commencing on the second (2^nd) anniversary of the takeover date. The $2,000,000 is included in restricted cash and related party note payable balances in the condensed consolidated balance sheets as of September 30, 2017 and June 30, 2017.

In April 2017, Portsmouth obtained from InterGroup an unsecured short-term loan in the amount of $1,000,000 at 5% per year fixed interest, with a term of five months and maturing September 6, 2017. The loan was extended to September 15, 2017 and paid off on September 13, 2017.

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

- 12 -

In connection with the redemption of the limited partnership interest of Justice, Justice Operating Company, LLC agreed to pay a total of $1,550,000 in fees to certain officers and directors of the Company for services rendered in connection with the redemption of the partnership interests, refinancing of the Justices properties and reorganization of Justice. This agreement was superseded by a letter dated December 11, 2013 from Justice, in which Justice assumed the payment obligations of Justice Operating Company, LLC. As of September 30, 2017, $400,000 of these fees remain payable and are included in related party and other notes payable on the accompanying condensed consolidated balalcne sheets.

As of September 30, 2017, Justice has an outstanding accounts payable balance to InterGroup for $116,000 for management of the Hotel from June to December of 2016.

Four of the Company’s directors serve as directors of InterGroup and three of the Company’s Directors serve on the Board of Santa Fe.

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.

Item 2 – LEGAL PROCEEDINGS

We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings, such as employment of labor disputes, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain types of risk.

On April 21, 2014, the Partnership commenced arbitration against Glaser Weil Fink Howard Avchen & Shapiro, LLP, Greet J. Cohen, Gary N. Jacobs, Janet S. McCloud, Paul B. Salvaty, and Joseph K. Fletcher III (“Respondents”) in connection with the redemption transaction. The arbitration alleges legal malpractice and also seeks declaratory relief regarding provisions of the redemption option agreement. The arbitration proceedings are active; discovery is proceeding. The hearing is set for April 2018 before JAMS in Los Angeles, California. No prediction can be given as to the outcome of this matter.

On May 5, 2016, Justice and Portsmouth entered into a settlement agreement relating to previously reported litigation with Evon Corporation and certain other parties.  Under the settlement agreement, Justice, a subsidiary of Portsmouth agreed to pay Evon Corporation $5,575,000. The final installment due was made in January 2017 and all conditions of the settlement agreement have been satisfied by the Company.

Item 3 – 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, 2017, 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.

- 13 -

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 544 room hotel property located at 750 Kearny Street, San Francisco, California 94108, known as the “Hilton San Francisco Financial District” (the “Hotel” or the “Property”) and related facilities, including a five-level underground parking garage. The financial statements of Justice have been consolidated with those of the Company.

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

Justice had a management agreement with Prism Hospitality L.P. (“Prism”) to perform certain management functions for the Hotel. The management agreement with Prism had an original term of ten years and could be terminated at any time with or without cause by the Partnership. Effective January 2014, the management agreement with Prism was amended by the Partnership to change the nature of the services provided by Prism and the compensation payable to Prism, among other things. Prism’s management agreement was terminated upon its expiration date of February 3, 2017. Effective December 1, 2013, GMP Management, Inc. (“GMP”), a company owned by a Justice limited partner and a related party, began to provide management services for the Partnership pursuant to a management services agreement with a term of three years, subject to the Partnership’s right to terminate earlier, for cause. In June 2016, GMP resigned. After a lengthy review process of several national third party hotel management companies, on February 1, 2017, Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of HMA is for an initial period of ten years commencing on the takeover date and automatically renews for an additional year not to exceed five years in aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The $2,000,000 was received in May 2017 and is included in the restricted cash and related party and other notes payable balances in the condensed consolidated balance sheets as of September 30, 2017 and June 30, 2017.

The parking garage that is part of the Hotel property was managed by Ace Parking pursuant to a contract with the Partnership. The contract was terminated with an effective termination date of October 4, 2016. The Company began managing the parking garage in-house after the termination of Ace Parking. Effective February 3, 2017, Interstate took over the management of the parking garage along with the Hotel.

Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016

The Company had net income of $407,000, for the three months ended September 30, 2017 compared to net income of $1,072,000 for the three months ended September 30, 2016. The decrease in net income is primarily attributable to lower net income from Hotel operations and net losses from investment transactions during the quarter ended September 30, 2017.

- 14 -

Hotel Operations

The Company had net income from Hotel operations of $1,212,000 for the three months ended September 30, 2017 compared to net income of $1,697,000 for the three months ended September 30, 2016. The decrease is primarily due to the reduction of hotel room revenues and increased operating expenses contributed to lower net income from Hotel operations. The reduced room revenues were offset by increased food and beverage and garage revenues during the quarter ended September 30, 2017 compared to September 30, 2016.

The following table sets forth a more detailed presentation of Hotel operations for the three months ended September 30, 2017 and 2016.

For the three months ended September 30,	2017			2016
Hotel revenues:
Hotel rooms	$	11,842,000		$	12,298,000
Food and beverage		1,759,000			1,449,000
Garage		781,000			681,000
Other operating departments		55,000			177,000
Total hotel revenues		14,437,000			14,605,000
Operating expenses excluding non-recurring charges, depreciation and amortization		(10,589,000	)		(10,256,000	)
Operating income before interest expense, depreciation and amortization		3,848,000			4,349,000
Interest expense - mortgage		(1,987,000	)		(1,988,000	)
Depreciation and amortization expense		(649,000	)		(664,000	)
Net income from Hotel operations	$	1,212,000		$	1,697,000

For the three months ended September 30, 2017, the Hotel had operating income of $3,848,000 before interest expense, depreciation and amortization on total operating revenues of $14,437,000 compared to operating income of $4,349,000 before interest expense, depreciation and amortization on total operating revenues of $14,605,000 for the three months ended September 30, 2016. Room revenues decreased by $456,000 for the three months ended September 30, 2017 compared to the three months ended September 30, 2016 primarily due to a shift of the largest San Francisco citywide convention of the year from September to November and to a lesser extent, the 4^th of July Holiday impacted an entire week given that it was in the mid-week during the quarter ended September 30, 2017 versus on or around a weekend. Food and beverage revenue increased by $310,000 as a result of increased catering and banquet services.

Total operating expenses increased by $333,000 this quarter primarily due to increased operating expenses related to food and beverage, franchise fees, and management fees. The increase in the aforementioned areas was offset by reduced advertising and sales expenses and other operating department expenses.

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, 2017 and 2016.

Three Months Ended September 30,	Average Daily Rate		Average Occupancy %			RevPAR
2017	$	254		93	%	$	237
2016	$	255		97	%	$	246

The Hotel’s revenues decreased by 1% this quarter as compared to the previous comparable quarter. Average daily rate decreased by $1 and RevPAR decreased by $9 for the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Average occupancy was 93% and 97% for the respective comparable periods.

- 15 -

Investment Transactions

The Company had a net loss on marketable securities of $304,000 for the three months ended September 30, 2017 compared to a net gain on marketable securities of $262,000 for the three months ended September 30, 2016. As of September 30, 2017 and 2016, approximately 42% and 67%, respectively, of the investment in marketable securities’ balance above is comprised of the common stock of Comstock Mining, Inc. (Comstock). As the result, the change in the market price of the common stock of Comstock will have a significant impact on the gain (loss) on marketable securities. For the three months ended September 30, 2017, the Company had a net realized loss of $14,000 and a net unrealized loss of $290,000. For the three months ended September 30, 2016, the Company had a net realized gain of $51,000 and a net unrealized gain of $211,000. 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, 2017 and 2016 represents the income tax effect on the Company’s pretax income (loss) which includes its share in the net income (loss) of the Hotel.

MARKETABLE SECURITIES

The following table shows the composition of the Company’s marketable securities portfolio as of September 30, 2017 and June 30, 2017 by selected industry groups.

			% of Total
As of September 30, 2017			Investment
Industry Group	Fair Value		Securities
Basic materials	$	1,703,000		51.8	%
Technology		863,000		26.3	%
Energy		203,000		6.2	%
Other		517,000		15.7	%
	$	3,286,000		100.0	%

			% of Total
As of June 30, 2017			Investment
Industry Group	Fair Value		Securities
Basic materials	$	1,816,000		47.0	%
Technology		918,000		23.9	%
Energy		411,000		10.6	%
REITs and real estate companies		274,000		7.1	%
Other		442,000		11.4	%
	$	3,861,000		100.0	%

As of September 30, 2017, 42% of the Company’s investment in marketable securities portfolio consists of the common stock of Comstock Mining, Inc. (“Comstock” - NYSE MKT: LODE) which is included in the basic materials industry group.

- 16 -

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel operations, 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 the redemption of limited partnership interests and to repay the prior mortgage of $42,940,000, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan bears an interest rate of 5.275% per annum with interest only payments due thru January 2017. Beginning in February 2017, the loan began to amortize over a thirty-year period thru its maturity date of 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 interest only loan 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. The outstanding balance of the senior loan and the mezzanine loans as of September 30, 2017 were $96,029,000 and $20,000,000, respectively.Effective May 12, 2017, InterGroup (a related party) agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan.

On July 2, 2014, the Partnership obtained from InterGroup (a related party) an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The loan was extended to December 31, 2017.

In April 2017, Portsmouth obtained from InterGroup an unsecured short-term loan in the amount of $1,000,000 at 5% per year fixed interest, with a term of five months and maturing September 6, 2017. The short-term loan was extended to September 15, 2017 and paid off on September 13, 2017.

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

The Company has invested in short-term, income-producing instruments and in equity and debt securities when deemed appropriate. The Company's 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.

- 17 -

MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary as of September 30, 2017, the Company’s material financial obligations which also includes interest payments:

			9 Months		Year		Year		Year		Year
	Total		2018		2019		2020		2021		2022		Thereafter
Mortgage notes payable	$	116,029,000	$	1,011,000	$	1,397,000	$	1,460,000	$	1,554,000	$	1,639,000	$	108,968,000
Related party and other notes payable		10,129,000		4,488,000		421,000		567,000		567,000		567,000		3,519,000
Interest		43,433,000		5,902,000		6,999,000		6,936,000		6,842,000		6,757,000		9,997,000
Total	$	169,591,000	$	11,401,000	$	8,817,000	$	8,963,000	$	8,963,000	$	8,963,000	$	122,484,000

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 condensed consolidated 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, 2017. Please refer to the Company’s Annual Report on Form 10-K for the year ended June 30, 2017 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.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

As stated in the Company’s Form 10-K for the year ended June 30, 2017, we identified a material weakness in internal controls over financial reporting related to our deferred income taxes and income tax expense during the fourth quarter of fiscal 2017. During the quarter ended September 30, 2017, we hired new tax CPA specialist to perform detailed analysis which was completed for the year ended June 30, 2017. We also assigned our audit committee with oversight responsibilities. The Company has taken steps to remediate the material weakness and improved its internal control over financial reporting during the last quarterly period covered by this Form 10-Q.

- 18 -

PART II.

OTHER INFORMATION

Item 5. Exhibits.

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

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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: November 8, 2017	by	/s/ John V. Winfield
		John V. Winfield, President,
		Chairman of the Board and
		Chief Executive Officer
Date: November 8, 2017	by	/s/ Danfeng Xu
		Danfeng Xu, Treasurer and Controller

- 19 -

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: November 8, 2017

/s/ John V. Winfield

John V. Winfield

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Danfeng Xu, 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: November 8, 2017

/s/ Danfeng Xu

Danfeng Xu

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, 2017, 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: November 8, 2017

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, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Danfeng Xu, 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/ Danfeng Xu

Danfeng Xu

Controller

(Principal Financial Officer)

Date: November 8, 2017

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

Document And Entity Information - shares	3 Months Ended
	Sep. 30, 2017	Nov. 06, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2018
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

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2017	Jun. 30, 2017
ASSETS
Investment in Hotel, net	$ 34,607,000	$ 35,213,000
Investment in real estate, net	973,000	973,000
Investment in marketable securities	3,286,000	3,861,000
Other investments, net	389,000	389,000
Cash and cash equivalents	1,531,000	2,049,000
Restricted cash	5,534,000	5,111,000
Accounts receivable - Hotel, net	2,624,000	1,436,000
Other assets, net	679,000	867,000
Deferred income taxes	10,665,000	10,927,000
Total assets	60,288,000	60,826,000
Liabilities:
Accounts payable and other liabilities	14,765,000	15,085,000
Due to securities broker	393,000	592,000
Obligations for securities sold	807,000	867,000
Related party and other notes payable	10,129,000	10,209,000
Mortgage notes payable - Hotel, net	115,329,000	115,615,000
Total liabilities	141,423,000	142,368,000
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	(76,786,000)	(77,120,000)
Total Portsmouth shareholders' deficit	(74,694,000)	(75,028,000)
Noncontrolling interest	(6,441,000)	(6,514,000)
Total shareholders' deficit	(81,135,000)	(81,542,000)
Total liabilities and shareholders' deficit	$ 60,288,000	$ 60,826,000

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Sep. 30, 2017	Jun. 30, 2017
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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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Revenue - Hotel	$ 14,437,000	$ 14,605,000
Costs and operating expenses
Hotel operating expenses	(10,589,000)	(10,256,000)
Hotel depreciation and amortization expense	(649,000)	(664,000)
General and administrative expense	(198,000)	(154,000)
Total costs and operating expenses	(11,436,000)	(11,074,000)
Income from operations	3,001,000	3,531,000
Other income (expense)
Interest expense - mortgage	(1,987,000)	(1,988,000)
Net (Loss) gain on marketable securities	(304,000)	262,000
Impairment loss on other investments	0	(5,000)
Dividend and interest income	11,000	10,000
Trading and margin interest expense	(52,000)	(33,000)
Other expense, net	(2,332,000)	(1,754,000)
Income before income taxes	669,000	1,777,000
Income tax expense	(262,000)	(705,000)
Net Income	407,000	1,072,000
Less: Net income attributable to the noncontrolling interest	(73,000)	(107,000)
Net income attributable to Portsmouth Square, Inc.	$ 334,000	$ 965,000
Basic and diluted net income per share attributable to Portsmouth Square, Inc.	$ 0.45	$ 1.31
Weighted average number of common shares outstanding - basic and diluted	734,183	734,183

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CONDENDSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net income	$ 407,000	$ 1,072,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Net unrealized (loss) gain on marketable securities	290,000	(211,000)
Impairment loss on other investments	0	5,000
Depreciation	649,000	636,000
Amortization of loan costs	28,000	28,000
Deferred tax asset	262,000	705,000
Changes in operating assets and liabilities:
Investment in marketable securities	285,000	(640,000)
Accounts receivable	(1,188,000)	206,000
Other assets	188,000	327,000
Accounts payable and other liabilities	(320,000)	(3,144,000)
Due to securities broker	(199,000)	250,000
Obligations for securities sold	(60,000)	339,000
Net cash provided by (used in) operating activities	342,000	(427,000)
Cash flows from investing activities:
Payments for hotel furniture, equipment and building improvements	(43,000)	(272,000)
Net cash used in investing activities	(43,000)	(272,000)
Cash flows from financing activities:
Payments of mortgage and other notes payable	(394,000)	(519,000)
Restricted cash - payments for mortgage impounds, net	(423,000)	(789,000)
Net cash used in financing activities	(817,000)	(1,308,000)
Net decrease in cash and cash equivalents	(518,000)	(2,007,000)
Cash and cash equivalents at the beginning of the period	2,049,000	3,378,000
Cash and cash equivalents at the end of the period	1,531,000	1,371,000
Supplemental information:
Interest paid	$ 2,010,000	$ 1,997,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2017

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, 2017. The June 30, 2017 Condensed Consolidated Balance Sheet was derived from the Company’s Form 10-K for the year ended June 30, 2017.

The results of operations for the three months ended September 30, 2017 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2018.

Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”). Portsmouth has a 93.1% limited partnership interest in Justice and is the sole general partner. The financial statements of Justice are consolidated with those of the Company.

As of September 30, 2017, 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 81.9%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.4% of the common stock of Portsmouth.

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

Justice had a management agreement with Prism Hospitality L.P. (“Prism”) to perform certain management functions for the Hotel. The management agreement with Prism had an original term of ten years, subject to the Partnership’s right to terminate at any time with or without cause. Effective January 2014, the management agreement with Prism was amended by the Partnership to change the nature of the services provided by Prism and the compensation payable to Prism, among other things. Prism’s management agreement was terminated upon its expiration date of February 3, 2017. Effective December 1, 2013, GMP Management, Inc. (“GMP”), a company owned by a Justice limited partner and a related party, also provided management services for the Partnership pursuant to a management services agreement, with a three-year term, subject to the Partnership’s right to terminate earlier for cause. In June 2016, GMP resigned. On February 1, 2017, Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of the HMA is for an initial period of ten years commencing on the takeover date and automatically renewals for an additional year not to exceed five years in the aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The $2,000,000 is included in the restricted cash and related party and other notes payable balances in the condensed consolidated balance sheets as of September 30, 2017 and June 30, 2017.

The parking garage that is part of the Hotel property was managed by Ace Parking pursuant to a contract with the Partnership. The contract was terminated with an effective termination date of October 4, 2016. The Company began managing the parking garage in-house after the termination of Ace Parking. Effective February 3, 2017, Interstate took over the management of the parking garage along with the Hotel.

Due to Securities Broker

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

Obligations for Securities Sold

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

Income Tax

The Company consolidates Justice (“Hotel”) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel.  The income tax expense during the three months ended September 30, 2017 and 2016 represents the income tax effect on the Company’s pretax income which includes its share in the net income of the Hotel.

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel operations. The Company also receives cash generated from the investment of its cash and marketable securities and other investments.

To fund the redemption of limited partnership interests and to repay the prior mortgage of $42,940,000, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan bears an interest rate of 5.275% per annum with interest only payments due thru January 2017. Beginning in February 2017, the loan began to amortize over a thirty-year period thru its maturity date of 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 secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The mezzanine interest only loan 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.

Effective as of May 11, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. Pursuant to the agreement, InterGroup is required to maintain a certain net worth and liquidity. As of September 30, 2017, InterGroup is in compliance with both requirements.

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

The Company has invested in short-term, income-producing instruments and in equity and debt securities when deemed appropriate. The Company's 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.

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern that requires management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management is required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning after December 15, 2016 and for interim reporting periods thereafter. The Company’s adoption of this ASU did not have a material impact on its consolidated financial statements.

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

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The new revenue recognition standard will be effective for the Company in the first quarter of 2019, with the option to adopt it in the first quarter of 2018. We currently anticipate adopting the new standard effective July 1, 2019. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company currently anticipates adopting the standard using the modified retrospective method. While the Company is still in the process of completing the analysis on the impact this guidance will have on the consolidated financial statements and related disclosures, the Company does not expect the impact to be material.

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INVESTMENT IN HOTEL, NET

3 Months Ended

Sep. 30, 2017

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, 2017	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		27,830,000		(24,987,000)		2,843,000
Building and improvements		55,933,000		(25,293,000)		30,640,000
	$	84,887,000	$	(50,280,000)	$	34,607,000

			Accumulated		Net Book
June 30, 2017	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		27,681,000		(24,570,000)		3,111,000
Building and improvements		55,918,000		(24,940,000)		30,978,000
	$	84,723,000	$	(49,510,000)	$	35,213,000

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INVESTMENT IN MARKETABLE SECURITIES

3 Months Ended

Sep. 30, 2017

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 periodically invested in corporate bonds and income producing securities, which may include interests in real estate based companies and REITs, where financial benefit could transfer to its shareholders through income and/or capital gain.

At September 30, 2017 and June 30, 2017, all of the Company’s marketable securities are classified as trading securities. The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:

			Gross		Gross		Net		Fair
Investment	Cost		Unrealized Gain		Unrealized Loss		Unrealized Loss		Value
As of September 30, 2017
Corporate
Equities	$	7,633,000	$	440,000	$	(4,787,000)	$	(4,347,000)	$	3,286,000
As of June 30, 2017
Corporate
Equities	$	8,012,000	$	381,000	$	(4,532,000)	$	(4,151,000)	$	3,861,000

As of September 30, 2017 and June 30, 2017, approximately 42% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining, Inc.

As of September 30, 2017 and June 30, 2017, the Company had $4,725,000 and $4,494,000, 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, 2017 and 2016, respectively.

For the three months ended September 30,	2017		2016
Realized gain (loss) on marketable securities	$	(14,000)	$	51,000
Unrealized gain (loss) on marketable securities		(290,000)		211,000
Net gain on marketable securities	$	(304,000)	$	262,000

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OTHER INVESTMENTS, NET

3 Months Ended

Sep. 30, 2017

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, net consist of the following:

Type	September 30, 2017		June 30, 2017
Private equity hedge fund, at cost	$	284,000	$	284,000
Other preferred stock		105,000		105,000
	$	389,000	$	389,000

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FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 30, 2017

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, 2017		June 30, 2017
Assets:	Total - Level 1		Total - Level 1
Investment in marketable securities:
Basic materials	$	1,703,000	$	1,816,000
Energy		203,000		411,000
Technology		863,000		918,000
Other		517,000		716,000
	$	3,286,000	$	3,861,000

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

Financial assets that are measured at fair value on a non-recurring basis and are not included in the tables above include “Other investments, 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 3		September 30, 2017		ended September 30, 2017
Other non-marketable investments	$	389,000	$	389,000	$	-

					Net loss for the three months
Assets	Level 3		June 30, 2017		ended September 30, 2016
Other non-marketable investments	$	389,000	$	389,000	$	(5,000)

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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SEGMENT INFORMATION

3 Months Ended

Sep. 30, 2017

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, 2017 and 2016, 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. The other segment consists of corporate general and administrative expenses and the income tax expense for the entire Company.

As of and for the three months	Hotel		Investment
ended September 30, 2017	Operations		Transactions		Other		Total
Revenues	$	14,437,000	$	-	$	-	$	14,437,000
Segment operating expenses		(10,589,000)		-		(198,000)		(10,787,000)
Segment income (loss)		3,848,000		-		(198,000)		3,650,000
Interest expense - mortgage		(1,987,000)		-		-		(1,987,000)
Depreciation and amortization expense		(649,000)		-		-		(649,000)
Loss from investments		-		(345,000)		-		(345,000)
Income tax expense		-		-		(262,000)		(262,000)
Net income (loss)	$	1,212,000	$	(345,000)	$	(460,000)	$	407,000
Total assets	$	44,792,000	$	3,675,000	$	11,821,000	$	60,288,000

As of and for the three months	Hotel		Investment
ended September 30, 2016	Operations		Transactions		Other		Total
Revenues	$	14,605,000	$	-	$	-	$	14,605,000
Segment operating expenses		(10,256,000)		-		(154,000)		(10,410,000)
Segment income (loss)		4,349,000		-		(154,000)		4,195,000
Interest expense - mortgage		(1,988,000)		-		-		(1,988,000)
Depreciation and amortization expense		(664,000)		-		-		(664,000)
Income from investments		-		234,000		-		234,000
Incomt tax expense		-		-		(705,000)		(705,000)
Net income (loss)	$	1,697,000	$	234,000	$	(859,000)	$	1,072,000
Total assets	$	43,958,000	$	5,243,000	$	11,795,000	$	60,996,000

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RELATED PARTY AND OTHER NOTES PAYABLE

3 Months Ended

Sep. 30, 2017

Related Party And Other Notes Payable [Abstract]

Related Party And Other Notes Payable [Text Block]

NOTE 7 - RELATED PARTY TRANSACTIONS

On July 2, 2014, the Partnership obtained from InterGroup (a related party) an unsecured loan in the principal amount of $4,250,000 at 12% per year fixed interest, with a term of 2 years, payable interest only each month. InterGroup received a 3% loan fee. The loan may be prepaid at any time without penalty. The loan was extended to December 31, 2017.

Also included in the balance of related party note payable at September 30, 2017 is the obligation to Hilton (Franchisor) in the form of a self-exhausting, interest free development incentive note which is reduced by approximately $316,000 annually through 2030 by Hilton if the Partnership is still a Franchisee with Hilton. The outstanding balance of the note as of September 30, 2017 and June 30, 2017, was $3,879,000 and $3,958,000, respectively.

On February 1, 2017, Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of 10 years commencing on the takeover date and automatically renews for an additional year not to exceed five years in aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The key money contribution shall be amortized in equal monthly amounts over an eight (8) year period commencing on the second (2^nd) anniversary of the takeover date. The $2,000,000 is included in restricted cash and related party note payable balances in the condensed consolidated balance sheets as of September 30, 2017 and June 30, 2017.

In April 2017, Portsmouth obtained from InterGroup an unsecured short-term loan in the amount of $1,000,000 at 5% per year fixed interest, with a term of five months and maturing September 6, 2017. The loan was extended to September 15, 2017 and paid off on September 13, 2017.

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

In connection with the redemption of the limited partnership interest of Justice, Justice Operating Company, LLC agreed to pay a total of $1,550,000 in fees to certain officers and directors of the Company for services rendered in connection with the redemption of the partnership interests, refinancing of the Justices properties and reorganization of Justice. This agreement was superseded by a letter dated December 11, 2013 from Justice, in which Justice assumed the payment obligations of Justice Operating Company, LLC. As of September 30, 2017, $400,000 of these fees remain payable and are included in related party and other notes payable on the accompanying condensed consolidated balalcne sheets.

As of September 30, 2017, Justice has an outstanding accounts payable balance to InterGroup for $116,000 for management of the Hotel from June to December of 2016.

Four of the Company’s directors serve as directors of InterGroup and three of the Company’s Directors serve on the Board of Santa Fe.

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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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2017

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, 2017. The June 30, 2017 Condensed Consolidated Balance Sheet was derived from the Company’s Form 10-K for the year ended June 30, 2017.

The results of operations for the three months ended September 30, 2017 are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2018.

Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California limited partnership (“Justice” or the “Partnership”). Portsmouth has a 93.1% limited partnership interest in Justice and is the sole general partner. The financial statements of Justice are consolidated with those of the Company.

As of September 30, 2017, 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 81.9%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.4% of the common stock of Portsmouth.

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

Justice had a management agreement with Prism Hospitality L.P. (“Prism”) to perform certain management functions for the Hotel. The management agreement with Prism had an original term of ten years, subject to the Partnership’s right to terminate at any time with or without cause. Effective January 2014, the management agreement with Prism was amended by the Partnership to change the nature of the services provided by Prism and the compensation payable to Prism, among other things. Prism’s management agreement was terminated upon its expiration date of February 3, 2017. Effective December 1, 2013, GMP Management, Inc. (“GMP”), a company owned by a Justice limited partner and a related party, also provided management services for the Partnership pursuant to a management services agreement, with a three-year term, subject to the Partnership’s right to terminate earlier for cause. In June 2016, GMP resigned. On February 1, 2017, Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel with an effective takeover date of February 3, 2017. The term of the HMA is for an initial period of ten years commencing on the takeover date and automatically renewals for an additional year not to exceed five years in the aggregate subject to certain conditions. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the amount of $2,000,000 under certain terms and conditions described in a separate key money agreement. The $2,000,000 is included in the restricted cash and related party and other notes payable balances in the condensed consolidated balance sheets as of September 30, 2017 and June 30, 2017.

The parking garage that is part of the Hotel property was managed by Ace Parking pursuant to a contract with the Partnership. The contract was terminated with an effective termination date of October 4, 2016. The Company began managing the parking garage in-house after the termination of Ace Parking. Effective February 3, 2017, Interstate took over the management of the parking garage along with the Hotel.

Due To And From Broker Dealers [Policy Text Block]

Due to Securities Broker

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

Obligations For Securities Sold [Policy Text Block]

Obligations for Securities Sold

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

Income Tax, Policy [Policy Text Block]

Income Tax

The Company consolidates Justice (“Hotel”) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel.  The income tax expense during the three months ended September 30, 2017 and 2016 represents the income tax effect on the Company’s pretax income which includes its share in the net income of the Hotel.

Financial Condition And Liquidity [Policy Text Block]

FINANCIAL CONDITION AND LIQUIDITY

The Company’s cash flows are primarily generated from its Hotel operations. The Company also receives cash generated from the investment of its cash and marketable securities and other investments.

To fund the redemption of limited partnership interests and to repay the prior mortgage of $42,940,000, Justice obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan. The mortgage loan is secured by the Partnership’s principal asset, the Hotel. The mortgage loan bears an interest rate of 5.275% per annum with interest only payments due thru January 2017. Beginning in February 2017, the loan began to amortize over a thirty-year period thru its maturity date of 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 secured by the Operating membership interest held by Mezzanine and is subordinated to the Mortgage Loan. The mezzanine interest only loan 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.

Effective as of May 11, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. Pursuant to the agreement, InterGroup is required to maintain a certain net worth and liquidity. As of September 30, 2017, InterGroup is in compliance with both requirements.

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

The Company has invested in short-term, income-producing instruments and in equity and debt securities when deemed appropriate. The Company's 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.

New Accounting Pronouncements, Policy [Policy Text Block]

DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern that requires management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management is required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning after December 15, 2016 and for interim reporting periods thereafter. The Company’s adoption of this ASU did not have a material impact on its consolidated financial statements.

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

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The new revenue recognition standard will be effective for the Company in the first quarter of 2019, with the option to adopt it in the first quarter of 2018. We currently anticipate adopting the new standard effective July 1, 2019. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company currently anticipates adopting the standard using the modified retrospective method. While the Company is still in the process of completing the analysis on the impact this guidance will have on the consolidated financial statements and related disclosures, the Company does not expect the impact to be material.

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INVESTMENT IN HOTEL, NET (Tables)

3 Months Ended

Sep. 30, 2017

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, 2017	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		27,830,000		(24,987,000)		2,843,000
Building and improvements		55,933,000		(25,293,000)		30,640,000
	$	84,887,000	$	(50,280,000)	$	34,607,000

			Accumulated		Net Book
June 30, 2017	Cost		Depreciation		Value
Land	$	1,124,000	$	-	$	1,124,000
Furniture and equipment		27,681,000		(24,570,000)		3,111,000
Building and improvements		55,918,000		(24,940,000)		30,978,000
	$	84,723,000	$	(49,510,000)	$	35,213,000

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INVESTMENT IN MARKETABLE SECURITIES (Tables)

3 Months Ended

Sep. 30, 2017

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 Loss		Value
As of September 30, 2017
Corporate
Equities	$	7,633,000	$	440,000	$	(4,787,000)	$	(4,347,000)	$	3,286,000
As of June 30, 2017
Corporate
Equities	$	8,012,000	$	381,000	$	(4,532,000)	$	(4,151,000)	$	3,861,000

Gain (Loss) on Investments [Table Text Block]

Below is the composition of the two components for the three months September 30, 2017 and 2016, respectively.

For the three months ended September 30,	2017		2016
Realized gain (loss) on marketable securities	$	(14,000)	$	51,000
Unrealized gain (loss) on marketable securities		(290,000)		211,000
Net gain on marketable securities	$	(304,000)	$	262,000

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OTHER INVESTMENTS, NET (Tables)

3 Months Ended

Sep. 30, 2017

Investments, All Other Investments [Abstract]

Other Investments Not Readily Marketable [Table Text Block]

Other investments, net consist of the following:

Type	September 30, 2017		June 30, 2017
Private equity hedge fund, at cost	$	284,000	$	284,000
Other preferred stock		105,000		105,000
	$	389,000	$	389,000

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Sep. 30, 2017

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, 2017		June 30, 2017
Assets:	Total - Level 1		Total - Level 1
Investment in marketable securities:
Basic materials	$	1,703,000	$	1,816,000
Energy		203,000		411,000
Technology		863,000		918,000
Other		517,000		716,000
	$	3,286,000	$	3,861,000

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 3		September 30, 2017		ended September 30, 2017
Other non-marketable investments	$	389,000	$	389,000	$	-

					Net loss for the three months
Assets	Level 3		June 30, 2017		ended September 30, 2016
Other non-marketable investments	$	389,000	$	389,000	$	(5,000)

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SEGMENT INFORMATION (Tables)

3 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

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

The other segment consists of corporate general and administrative expenses and the income tax expense for the entire Company.

As of and for the three months	Hotel		Investment
ended September 30, 2017	Operations		Transactions		Other		Total
Revenues	$	14,437,000	$	-	$	-	$	14,437,000
Segment operating expenses		(10,589,000)		-		(198,000)		(10,787,000)
Segment income (loss)		3,848,000		-		(198,000)		3,650,000
Interest expense - mortgage		(1,987,000)		-		-		(1,987,000)
Depreciation and amortization expense		(649,000)		-		-		(649,000)
Loss from investments		-		(345,000)		-		(345,000)
Income tax expense		-		-		(262,000)		(262,000)
Net income (loss)	$	1,212,000	$	(345,000)	$	(460,000)	$	407,000
Total assets	$	44,792,000	$	3,675,000	$	11,821,000	$	60,288,000

As of and for the three months	Hotel		Investment
ended September 30, 2016	Operations		Transactions		Other		Total
Revenues	$	14,605,000	$	-	$	-	$	14,605,000
Segment operating expenses		(10,256,000)		-		(154,000)		(10,410,000)
Segment income (loss)		4,349,000		-		(154,000)		4,195,000
Interest expense - mortgage		(1,988,000)		-		-		(1,988,000)
Depreciation and amortization expense		(664,000)		-		-		(664,000)
Income from investments		-		234,000		-		234,000
Incomt tax expense		-		-		(705,000)		(705,000)
Net income (loss)	$	1,697,000	$	234,000	$	(859,000)	$	1,072,000
Total assets	$	43,958,000	$	5,243,000	$	11,795,000	$	60,996,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	May 11, 2017
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Key Money Incentive Advance To Related Party	$ 2,000,000
Proceeds from Sale of Loans and Leases Held-for-investment	42,940,000
Mortgage Loans on Real Estate, Face Amount of Mortgages	$ 97,000,000
Mortgage Loans on Real Estate, Interest Rate	5.275%
Mortgage Loans on Real Estate, Carrying Amount of Mortgages			$ 97,000,000
Related Party [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Key Money Incentive Advance To Related Party	$ 2,000,000	$ 2,000,000
Mezzanine Loan [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Mortgage Loans on Real Estate, Face Amount of Mortgages	$ 20,000,000
Mortgage Loans on Real Estate, Interest Rate	9.75%
Mortgage Loans on Real Estate, Carrying Amount of Mortgages			$ 20,000,000
Inter Group Corporation [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	13.40%
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	93.10%
Subsidiary Of Inter Group [Member]
SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent	81.90%

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INVESTMENT IN HOTEL, NET (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017
Property, Plant and Equipment [Line Items]
Cost	$ 84,887,000	$ 84,723,000
Accumulated Depreciation	(50,280,000)	(49,510,000)
Net Book Value	34,607,000	35,213,000
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	27,830,000	27,681,000
Accumulated Depreciation	(24,987,000)	(24,570,000)
Net Book Value	2,843,000	3,111,000
Building and Improvements [Member] | Hotel [Member]
Property, Plant and Equipment [Line Items]
Cost	55,933,000	55,918,000
Accumulated Depreciation	(25,293,000)	(24,940,000)
Net Book Value	$ 30,640,000	$ 30,978,000

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INVESTMENT IN MARKETABLE SECURITIES (Details) - USD ($)	3 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2017
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net Unrealized Loss	$ (290,000)	$ 211,000
Fair Value	3,286,000		$ 3,861,000
Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Cost	7,633,000		8,012,000
Gross Unrealized Gain	440,000		381,000
Gross Unrealized Loss	(4,787,000)		(4,532,000)
Net Unrealized Loss	(4,347,000)		(4,151,000)
Fair Value	$ 3,286,000		$ 3,861,000

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INVESTMENT IN MARKETABLE SECURITIES (Details 1) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Schedule of Trading Securities and Other Trading Assets [Line Items]
Realized gain (loss) on marketable securities	$ (14,000)	$ 51,000
Unrealized gain (loss) on marketable securities	(290,000)	211,000
Net gain on marketable securities	$ (304,000)	$ 262,000

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INVESTMENT IN MARKETABLE SECURITIES (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017
Schedule of Trading Securities and Other Trading Assets [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ 4,725,000	$ 4,494,000
Comstock Mining, Inc [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Percentage of Investment Marketable Securities	42.00%	42.00%

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OTHER INVESTMENTS, NET (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017
Other Investments [Line Items]
Other investments, net	$ 389,000	$ 389,000
Private equity hedge fund, at cost [Member]
Other Investments [Line Items]
Other investments, net	284,000	284,000
Other preferred stock [Member]
Other Investments [Line Items]
Other investments, net	$ 105,000	$ 105,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Sep. 30, 2017	Jun. 30, 2017
Assets:
Investment in marketable securities	$ 3,286,000	$ 3,861,000
Fair Value, Measurements, Recurring [Member] | Basic Materials [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Investment in marketable securities	1,703,000	1,816,000
Fair Value, Measurements, Recurring [Member] | Technology and telecommunications [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Investment in marketable securities	863,000	918,000
Fair Value, Measurements, Recurring [Member] | Energy [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Investment in marketable securities	203,000	411,000
Fair Value, Measurements, Recurring [Member] | Other [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Investment in marketable securities	$ 517,000	$ 716,000

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FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	$ 389,000		$ 389,000
Net loss	0	$ (5,000)
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other non-marketable investments	$ 389,000		$ 389,000

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FAIR VALUE MEASUREMENTS (Details Textual)	3 Months Ended
	Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other investments in nonmarketable securities Ownership Percentage	20.00%

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SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2017
Segment Reporting Information [Line Items]
Revenues	$ 14,437,000	$ 14,605,000
Segment operating expenses	(10,787,000)	(10,410,000)
Segment income (loss)	3,001,000	3,531,000
Interest expense - mortgage	(1,987,000)	(1,988,000)
Depreciation and amortization expense	(649,000)	(664,000)
Loss from investments	(345,000)	234,000
Incomt tax expense	(262,000)	(705,000)
Net income (loss)	407,000	1,072,000
Total assets	60,288,000	60,996,000	$ 60,826,000
Hotel Operations [Member]
Segment Reporting Information [Line Items]
Revenues	14,437,000	14,605,000
Segment operating expenses	(10,589,000)	(10,256,000)
Segment income (loss)	3,848,000	4,349,000
Interest expense - mortgage	(1,987,000)	(1,988,000)
Depreciation and amortization expense	(649,000)	(664,000)
Loss from investments	0	0
Incomt tax expense	0	0
Net income (loss)	1,212,000	1,697,000
Total assets	44,792,000	43,958,000
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
Depreciation and amortization expense	0	0
Loss from investments	(345,000)	234,000
Incomt tax expense	0	0
Net income (loss)	(345,000)	234,000
Total assets	3,675,000	5,243,000
Other [Member]
Segment Reporting Information [Line Items]
Revenues	0	0
Segment operating expenses	(198,000)	(154,000)
Segment income (loss)	(198,000)	(154,000)
Interest expense - mortgage	0	0
Depreciation and amortization expense	0	0
Loss from investments	0	0
Incomt tax expense	(262,000)	(705,000)
Net income (loss)	(460,000)	(859,000)
Total assets	$ 11,821,000	$ 11,795,000

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RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)		1 Months Ended	3 Months Ended	12 Months Ended
	Jul. 02, 2014	Apr. 30, 2017	Sep. 30, 2017	Jun. 30, 2017	May 12, 2017	Dec. 31, 2016
Percentage of Loan Fee Received	3.00%
Key Money Incentive Advance To Related Party			$ 2,000,000
Accounts Payable, Related Parties						$ 116,000
Payment for Management Fee			1,550,000
Management Fee Payable			400,000
Intergroup [Member] | Mortage loans [Member]
Guarantor Obligations, Current Carrying Value					$ 97,000,000
Intergroup [Member] | Mezzanine Loan [Member]
Guarantor Obligations, Current Carrying Value					$ 20,000,000
Accounts Receivable [Member]
Key Money Incentive Advance To Related Party			2,000,000	$ 2,000,000
Unsecured Debt [Member]
Debt Instrument, Face Amount	$ 4,250,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Payment Terms	with a term of 2 years
Debt Instrument, Maturity Date, Description	with a term of 2 years, payable interest only each month.
Debt Instrument, Maturity Date	Dec. 31, 2017
Unsecured Debt [Member] | Intergroup [Member]
Debt Instrument, Face Amount		$ 1,000,000
Debt Instrument, Interest Rate, Stated Percentage		5.00%
Debt Instrument, Maturity Date		Sep. 15, 2017
Debt Instrument, Term		5 years
Interest Free Development Incentive Note [Member]
Notes Reduction			316,000
Notes Payable, Related Parties			$ 3,879,000	$ 3,958,000