182 added · 14 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports available free of charge on our website as soon as reasonably practicable after such materials are filed with or furnished to the SEC. 8 Item 1A.
Many of the risk factors described above should be read in conjunction with the cautionary statement regarding forward-looking statements contained in Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the ‘Forward-looking Statements’ section of this Annual Report on Form 10-K. 13
The amount of any such debt will depend on several factors including, but not limited to, the availability of financing and the sufficiency of the acquisition property’s projected cash flows to support the operations and debt service.
ADDITIONAL INFORMATION The Company files required annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K and other information with the Securities and Exchange Commission (“SEC” or the “Commission”).
Further, factors such as climate change, extreme weather events, and increased litigation risk have contributed to rising insurance premiums and reduced coverage availability in certain markets, including California.
The Commission also maintains an Internet site at https://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission.
As part of the March 28, 2025 closing, prior guaranties tied to the 2013/2017 facilities were terminated and replaced by limited “carve-out/springing recourse” guaranties executed by Portsmouth and InterGroup as described in Note 10. 4 In addition to the operations of the Hotel, the Company also generates income from the ownership, management and, when appropriate, sale of real estate.
On June 26, 2015, Operating and Hilton entered into an amended franchise agreement that, among other things, extended the License Agreement through January 31, 2030, and provided the Partnership with certain key money cash incentives to be earned through January 2030.
HOTEL MANAGEMENT COMPANY AGREEMENT Operating entered into a hotel management agreement (“HMA”) with Aimbridge Hospitality (“Aimbridge”) to manage the Hotel, along with its five-level parking garage, with an effective date of February 3, 2017.
For the fiscal years ended June 30, 2025 and 2024, hotel management fees were $783,000 and $706,000, respectively, and incentive fees were $0 in both periods, offset by key money amortization of $250,000 for both years, and such amounts are included in Hotel operating expenses in the consolidated statements of operations.
Specifically, Aimbridge agreed to waive $1,030,134 in previously recorded incentive fees, and both parties established a performance threshold for future incentive fee eligibility of $15,257,301 in earnings before interest, taxes, depreciation, and amortization (“EBITDA”), equal to, the EBITDA in 2017 when Aimbridge began managing the Hotel.
In May 2025 the Company amended the agreement for a new loan maturity of June 5, 2028. 5 MARKETABLE SECURITIES INVESTMENT POLICIES In addition to its Hotel and real estate operations, the Company also invests from time to time in income producing instruments, corporate debt and equity securities, publicly traded investment funds, mortgage-backed securities, securities issued by REITs and other companies which invest primarily in real estate.
No longer disclosed
The debt agreements that govern our outstanding indebtedness due January 2025 could result in our being required to repay these borrowings on their due date.
The combination of a decline in the local economy of San Francisco, reliance on a single location and the significant investment associated with it may cause our operating results to fluctuate significantly and may adversely affect us and materially affect our total profitability.
If we are unable to compete effectively, we could lose market share, which could adversely affect our business and results of operations. 11 The San Francisco hotel and resort industry is capital intensive; financing our renovations and future capital improvements could reduce our cash flow and adversely affect our financial performance.
As a result, we may have to enter into short-term borrowings in certain quarters in order to offset these quarterly fluctuations in our revenues. 13 The hotel industry is heavily regulated and failure to comply with extensive regulatory requirements may result in an adverse effect on our business.
Thus, a holder may need to hold such instruments for long period of time and not be able to realize a return of their cash investment should there be a need to liquidate to obtain cash at any given time.
If we are forced to refinance these borrowings on less favorable terms or are unable to refinance these borrowings, the Hotel financial condition and results of operations could be adversely affected.
The macro-economic situation of a looming US/Global recession has seen business reducing or eliminating typical travel and group meetings in efforts to be conservative in uncertain financial times.
These factors have resulted at times in the past and could continue to result in the future in fewer customers visiting, or customers spending less, in San Francisco, as compared to prior periods.
Our business in San Francisco and the hospitality industry has a limited base of operations and substantially all of our revenues are currently generated by the Hotel in San Francisco, California.
Accordingly, we are subject to greater risks than a more diversified hotel or resort operator and the profitability of our operations is linked to local economic conditions in San Francisco.
Changes adversely impacting this market could have a material effect on our business, financial condition, results of operations, and fair market value of the Hotel .
Any failure to comply with all such rules and regulations could subject us to fines or audits by the applicable taxation authority.