Document Entity Information
Document Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Sep. 09, 2020 | Dec. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | PORTSMOUTH SQUARE INC | ||
Entity Central Index Key | 0000079661 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6,529,000 | ||
Entity Common Stock, Shares Outstanding | 734,183 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
ASSETS | ||
Investment in Hotel, net | $ 32,481,000 | $ 33,352,000 |
Investment in real estate, net | 980,000 | 977,000 |
Investment in marketable securities | 565,000 | 1,425,000 |
Other investments, net | 87,000 | 196,000 |
Cash and cash equivalents | 4,710,000 | 9,789,000 |
Restricted cash | 11,675,000 | 11,027,000 |
Accounts receivable - Hotel, net | 251,000 | 848,000 |
Other assets, net | 831,000 | 886,000 |
Deferred tax asset | 5,974,000 | 4,054,000 |
Total assets | 57,554,000 | 62,554,000 |
Liabilities: | ||
Accounts payable and other liabilities - Justice | 7,588,000 | 11,298,000 |
Accounts payable and other liabilities | 255,000 | 182,000 |
Accounts payable to related party | 2,385,000 | 2,122,000 |
Due to securities broker | 151,000 | |
Obligations for securities sold | 325,000 | |
Related party notes payable | 7,604,000 | 8,221,000 |
Other note payable | 4,719,000 | |
Finance leases | 1,098,000 | 1,486,000 |
Mortgage notes payable - Hotel, net | 111,446,000 | 113,087,000 |
Total liabilities | 135,095,000 | 136,872,000 |
Commitments and contingencies (Note 17) | ||
Shareholders' deficit: | ||
Common stock, no par value: Authorized shares - 750,000; 734,183 shares issued and outstanding as of June 30, 2020 and 2019 | 2,092,000 | 2,092,000 |
Accumulated deficit | (73,809,000) | (70,876,000) |
Total Portsmouth shareholders' deficit | (71,717,000) | (68,784,000) |
Noncontrolling interest | (5,824,000) | (5,534,000) |
Total shareholders' deficit | (77,541,000) | (74,318,000) |
Total liabilities and shareholders' deficit | $ 57,554,000 | $ 62,554,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | ||
Common stock, shares authorized | 750,000 | 750,000 |
Common stock, shares issued | 734,183 | 734,183 |
Common stock, shares outstanding | 734,183 | 734,183 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Revenue - Hotel | $ 42,839,000 | $ 59,881,000 |
Costs and operating expenses | ||
Hotel operating expenses | (37,333,000) | (44,466,000) |
Hotel depreciation and amortization expense | (2,192,000) | (2,309,000) |
General and administrative expense | (747,000) | (766,000) |
Total costs and operating expenses | (40,272,000) | (47,541,000) |
Income from operations | 2,567,000 | 12,340,000 |
Other income (expense) | ||
Interest expense - mortgage | (6,965,000) | (7,273,000) |
Interest expense - related party | (361,000) | (361,000) |
Loss on asset disposal | (398,000) | |
Net loss on marketable securities | (322,000) | (266,000) |
Net loss on marketable securities - Comstock | (124,000) | |
Impairment loss on other investments | (80,000) | (36,000) |
Dividend and interest income | 134,000 | 167,000 |
Trading and margin interest expense | (130,000) | (179,000) |
Total other expense, net | (7,724,000) | (8,470,000) |
(Loss) Income before income taxes | (5,157,000) | 3,870,000 |
Income tax benefit (expense) | 1,934,000 | (956,000) |
Net (loss) income | (3,223,000) | 2,914,000 |
Less: Net loss (income) attributable to the noncontrolling interest | 290,000 | (315,000) |
Net (loss) income attributable to Portsmouth | $ (2,933,000) | $ 2,599,000 |
Basic and diluted net (loss) income per share attributable to Portsmouth | $ (3.99) | $ 3.54 |
Weighted average number of common shares outstanding - basic and diluted | 734,183 | 734,183 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) | Common Stock [Member] | Accumulated Deficit [Member] | Total Portsmouth Shareholders' Deficit [Member] | Noncontrolling Interest [Member] | Total |
Balance at Jun. 30, 2018 | $ 2,092,000 | $ (73,475,000) | $ (71,383,000) | $ (5,699,000) | $ (77,082,000) |
Balance (in shares) at Jun. 30, 2018 | 734,183 | ||||
Net income (loss) | 2,599,000 | 2,599,000 | 315,000 | 2,914,000 | |
Investment in Justice | (150,000) | (150,000) | |||
Balance at Jun. 30, 2019 | $ 2,092,000 | (70,876,000) | (68,784,000) | (5,534,000) | (74,318,000) |
Balance (in shares) at Jun. 30, 2019 | 734,183 | ||||
Net income (loss) | (2,933,000) | (2,933,000) | (290,000) | (3,223,000) | |
Investment in Justice | |||||
Balance at Jun. 30, 2020 | $ 2,092,000 | $ (73,809,000) | $ (71,717,000) | $ (5,824,000) | $ (77,541,000) |
Balance (in shares) at Jun. 30, 2020 | 734,183 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (3,223,000) | $ 2,914,000 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Net unrealized loss on marketable securities | 145,000 | 278,000 |
Loss on disposal of assets | 398,000 | |
Deferred income taxes | (1,920,000) | 1,105,000 |
Impairment loss on other investments | 80,000 | 36,000 |
Depreciation and amortization | 1,997,000 | 2,071,000 |
Changes in operating assets and liabilities: | ||
Investment in marketable securities | 715,000 | 804,000 |
Accounts receivable - Hotel, net | 597,000 | 961,000 |
Other assets | 55,000 | (155,000) |
Accounts payable and other liabilities - Justice | (3,710,000) | 1,352,000 |
Accounts payable and other liabilities | 73,000 | (225,000) |
Accounts payable related party | 263,000 | 356,000 |
Due to securities broker | (151,000) | (339,000) |
Obligations for securities sold | (325,000) | (187,000) |
Net cash (used in) provided by operating activities | (5,404,000) | 9,369,000 |
Cash flows from investing activities: | ||
Payments for hotel furniture, equipment and building improvements | (1,291,000) | (1,399,000) |
Investment in real estate | (3,000) | (4,000) |
Investment in Justice | (150,000) | |
Proceeds from other investments | 29,000 | 35,000 |
Net cash used in investing activities | (1,265,000) | (1,518,000) |
Cash flows from financing activities: | ||
Proceeds from other note payable | 4,719,000 | |
Payments of mortgage and finance leases, net | (1,872,000) | (1,523,000) |
Issuance cost from refinance of long term debt | (479,000) | (155,000) |
Issuance cost from refinance of related party loan | (130,000) | (40,000) |
Net cash provided by (used in) financing activities | 2,238,000 | (1,718,000) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (4,431,000) | 6,133,000 |
Cash, cash equivalents, and restricted cash at the beginning of the period | 20,816,000 | 14,683,000 |
Cash, cash equivalents, and restricted cash at the end of the period | 16,385,000 | 20,816,000 |
Supplemental information: | ||
Interest paid | 7,345,000 | 7,683,000 |
Taxes paid | 2,000 | 69,000 |
Non-cash transaction: | ||
Additions to Hotel equipment through finance leases | $ 30,000 | $ 382,000 |
Business and Significant Accoun
Business and Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Business and Significant Accounting Policies | NOTE 1 – BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business 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”). As of June 30, 2020, 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 83.7%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.7% of the common stock of Portsmouth. Justice, through its subsidiaries Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”) owns and operates 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. Mezzanine is a wholly owned subsidiary 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”) through January 31, 2030. Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel, along with its five-level parking garage, with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of ten years commencing on the takeover date and automatically renews for successive one (1) year periods, to not exceed five years in the aggregate, subject to certain conditions. Under the terms of the HMA, base management fee payable to Interstate shall be one and seven-tenths percent (1.70%) of total Hotel revenue. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the form of a self-exhausting, interest free note payable in the amount of $2,000,000 in a separate key money agreement. As of June 30, 2020 and 2019, balance of the key money including accrued interests are $1,009,000 and $2,049,000, respectively, and are included in restricted cash in the consolidated balance sheets. As of June 30, 2020 and 2019, balance of the unamortized portion of the key money are $1,646,000 and $1,896,000, respectively, and are included in the related party notes payable in the consolidated balance sheets. On October 25, 2019, Interstate merged with Aimbridge Hospitality, North America’s largest independent hotel management firm. With the completion of the merger, the newly combined company will be positioned under the Aimbridge Hospitality name in the Americas. Principles of Consolidation The consolidated financial statements include the accounts of the Company and Justice. All significant inter-company transactions and balances have been eliminated. Investment in Hotel, Net Property and equipment are stated at cost. Building improvements are depreciated on a straight-line basis over their useful lives ranging from 3 to 39 years. Furniture, fixtures, and equipment are depreciated on a straight-line basis over their useful lives ranging from 3 to 7 years. Repairs and maintenance are charged to expense as incurred. Costs of significant renewals and improvements are capitalized and depreciated over the shorter of its remaining estimated useful life or life of the asset. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts; any resulting gain or loss is included in other income (expenses). The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with generally accepted accounting principles (“GAAP”). If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Partnership will recognize an impairment loss equal to the difference between the assets’ carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. For a depreciable asset, the new cost will be depreciated over the asset’s remaining useful life. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the property. No impairment losses were recorded for the years ended June 30, 2020 and 2019. Investment in Marketable Securities Marketable securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. Marketable securities are classified as trading securities with all unrealized gains and losses on the Company’s investment portfolio recorded through the consolidated statements of operations. Other Investments, Net Other investments include non-marketable securities (carried at cost, net of any impairments loss) and non –marketable warrants (carried at fair value). The Company has no significant influence or control over the entities that issue these investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. For the years ended June 30, 2020 and 2019, the Company recorded impairment losses related to other investments of $80,000 and $36,000, respectively. As of June 30, 2020 and 2019, the allowance for impairment losses was $2,257,000 and $2,256,000, respectively. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased and are carried at cost, which approximates fair value. As of June 30, 2020 and 2019, the Company does not have any cash equivalents. Restricted Cash Restricted cash is comprised of amounts held by lenders for payment of real estate taxes, insurance, replacement and capital addition reserves for the Hotel. It also includes key money received from Interstate that is restricted for capital improvements. Accounts Receivable - Hotel, Net Accounts receivable from Hotel customers are carried at cost less an allowance for doubtful accounts that is based on management’s assessment of the collectability of accounts receivable. As of June 30, 2020 and 2019, the allowance for doubtful accounts was $25,000 and $4,000, respectively. The Partnership extends unsecured credit to its customers but mitigates the associated credit risk by performing ongoing credit evaluations of its customers. Other Assets, Net Other assets include prepaid insurance, accounts receivable, franchise fees, and other miscellaneous assets. Franchise fees are stated at cost and amortized over the life of the agreement (15 years). Income Taxes The Company consolidates Justice (“Hotel”) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel. The income tax benefit (expense) during the fiscal year ended June 30, 2020 and 2019 represent the income tax effect on the Company’s pretax (loss) income which includes its share in the net (loss) income of the Hotel. Deferred income taxes are calculated under the liability method. Deferred income tax assets and liabilities are based on differences between the financial statement and tax basis of assets and liabilities at the current enacted tax rates. Changes in deferred income tax assets and liabilities are included as a component of income tax expense. Changes in deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets where realization is not likely. We have considered the income tax accounting and disclosure implications of the relief provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020. The effect of tax law changes is required to be recognized either in the interim period in which the legislation is enacted or reflected in the computation of the annual effective tax rate, depending on the nature of the change. As of June 30, 2020, we evaluated the income tax provisions of the CARES Act and have determined there to be no material effect on the fiscal year tax provision. We will continue to evaluate the income tax provisions of the CARES Act and monitor the tax law changes that could have income tax accounting and disclosure implications. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. 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 consolidated statement of operations. Accounts Payable and Other Liabilities Accounts payable and other liabilities include trade payables, advance customer deposits, accrued wages, accrued real estate taxes, and other liabilities. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting standards for fair value measurement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: Level 1 Level 2 Level 3 Revenue Recognition On July 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers Advertising Costs Advertising costs are expensed as incurred and are included in Hotel operating expenses in the consolidated statements of operations. Advertising costs were $176,000 and $282,000 for the years ended June 30, 2020 and 2019, respectively. Basic and Diluted Income (Loss) per Share Basic income (loss) per share is calculated based upon the weighted average number of common shares outstanding during each fiscal year. As of June 30, 2020 and 2019, the Company did not have any potentially dilutive securities outstanding. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to the recording of allowance for doubtful accounts and allowance for impairment losses which are based on management’s assessment of the collectability of accounts receivable and the fair market value of nonmarketable securities, respectively, as of the end of the fiscal year. Actual results may differ from those estimates. Debt Issuance Costs Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability and are amortized over the life of the debt. Loan amortization costs are included in interest expense in the consolidated statement of operations. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements On June 16, 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Liquidity
Liquidity | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Liquidity | NOTE 2 - LIQUIDITY Historically, our cash flows have been primarily generated from our Hotel operations. However, the responses by federal, state, and local civil authorities to the COVID-19 pandemic has had a material detrimental impact on our liquidity. For the fiscal year ended June 30, 2020, our net cash flow used in operations was $5,404,000. For the fiscal year ended June 30, 2019, our net cash flow provided by operations was $9,369,000. We have taken several steps to preserve capital and increase liquidity at our Hotel, including implementing strict cost management measures to eliminate non-essential expenses, postponing capital expenditures, renegotiating certain reoccurring expenses, and temporarily closing certain hotel services and outlets. As of June 30, 2020, we had cash, cash equivalents, and restricted cash of $16,385,000 which included $10,666,000 of restricted cash held by our Hotel senior lender Wells Fargo Bank, N.A. (“Lender”). Of the $10,666,000 restricted cash, $7,486,000 was held for furniture, fixtures and equipment (“FF&E”) reserves and $2,432,000 was held for a possible future property improvement plan (“PIP”) requested by our franchisor, Hilton. However, Hilton has confirmed that it will not require a PIP for our Hotel until relicensing which shall occur at the earlier of (i) January 2030, which is six years after the maturity date of our current senior and mezzanine loans, or (ii) upon the sale of our Hotel. Therefore, on August 19, 2020, Lender released PIP deposits in the amount of $2,379,000 to the Hotel. The funds were utilized to fund operating expenses, including franchise and management fees and other expenses. On April 9, 2020, Justice entered into a loan agreement (“SBA Loan”) with CIBC Bank USA under the recently enacted CARES Act administered by the U.S. Small Business Administration. Justice received proceeds of $4,719,000 from the SBA Loan. In accordance with the requirements of the CARES Act, Justice has used the proceeds from the SBA Loan primarily for payroll costs. As of June 30, 2020, Justice had used $3,568,000 in qualified expenses and had a balance of $1,151,000 available for future qualified expenses. The SBA Loan is scheduled to mature on April 9, 2022 with a 1.00% interest rate and is subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration under the CARES Act. All payments of principal and interest are deferred until October 2020, and the repayment obligations under the loan may be forgiven if the funds are used for payroll and other qualified expenses. Justice anticipates applying for loan forgiveness shortly. All unforgiven portion of the principal and accrued interest will be due at maturity. In order to increase its liquidity position, InterGroup refinanced its 151-unit apartment complex in Parsippany, New Jersey on April 30, 2020, generating net proceeds of $6,814,000. In June 2020, InterGroup refinanced one of its California properties and generated net proceeds of $1,144,000. InterGroup is currently evaluating other refinancing opportunities and it could refinance additional multifamily properties should the need arise; however, InterGroup does not deem it necessary at this time. InterGroup has an uncollateralized $8,000,000 revolving line of credit from CIBC Bank USA (“CIBC”) of which $5,000,000 was available to be drawn down as of June 30, 2020; however, the outstanding balance on the revolving line of credit was paid down fully on August 28, 2020, making the entire $8,000,000 available to be drawn down should additional liquidity be necessary. On August 28, 2020, Santa Fe sold its 27-unit apartment complex located in Santa Monica, California for $15,650,000 and realized a gain on the sale of approximately $12,026,000. Santa Fe will manage its federal and state income tax liability, and anticipates the utilization of its available net operating losses and capital loss carryforwards. Santa Fe received net proceeds of $12,163,000 after selling costs and repayment of InterGroup’s RLOC of $2,985,000 as InterGroup had drawn on its RLOC in July 2018 to pay off the previous Fannie Mae mortgage on the property. Furthermore, pursuant to the Contribution Agreement between Santa Fe and InterGroup, Santa Fe paid InterGroup $662,000 from the sale. Santa Fe will not seek a replacement property. As the sole general partner of Justice that controls approximately 93.3% of the voting interest in the Partnership, Portsmouth has the ability to amend the partnership agreement to allow for capital calls to the limited partners of Justice if needed. The majority of any capital calls will be met by Portsmouth. Portsmouth will have financing availability, upon the authorization of the respective board of directors, to borrow from InterGroup and/or Santa Fe to meet any capital calls and its other obligations during the next twelve months and beyond. On August 28, 2020, the Board of InterGroup and Santa Fe have passed resolutions, respectively, to provide funding to Portsmouth if necessary. The Partnership is also allowed to seek additional loans and sell partnership interests. Upon the consent of the general partner and a super majority in interest, the Partnership may sell additional classes or series of units of the Partnership under certain conditions in order to raise additional capital. Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating and other expenditures, including management and franchise fees, corporate expenses, payroll and related costs, taxes, interest and principal payments on our outstanding indebtedness, and repairs and maintenance of the Hotel. Our long-term liquidity requirements primarily consist of funds necessary to pay for scheduled debt maturities and capital improvements of the Hotel. We will continue to finance our business activities primarily with existing cash, including from the activities described above, and cash generated from our operations. After considering our approach to liquidity and accessing our available sources of cash, we believe that our cash position, after giving effect to the transactions discussed above, will be adequate to meet anticipated requirements for operating and other expenditures, including corporate expenses, payroll and related benefits, taxes and compliance costs and other commitments, for at least twelve months from the date of issuance of these financial statements, even if current levels of low occupancy were to persist. The objectives of our cash management policy are to maintain existing leverage levels and the availability of liquidity, while minimizing operational costs. We believe that our cash on hand, along with other potential aforementioned sources of liquidity that management may be able to obtain, will be sufficient to fund our working capital needs, as well as our capital lease and debt obligations for at least the next twelve months and beyond. However, there can be no guarantee that management will be successful with its plan. |
Revenue
Revenue | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3 - REVENUE The following table present our revenue disaggregated by revenue streams. For the year ended June 30, 2020 2019 Hotel revenues: Hotel rooms $ 36,465,000 $ 51,243,000 Food and beverage 3,529,000 5,353,000 Garage 2,368,000 2,875,000 Other operating departments 477,000 410,000 Total Hotel revenue $ 42,839,000 $ 59,881,000 Performance obligations We identified the following performance obligations for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services: ● Cancelable room reservations or ancillary services ● Noncancelable room reservations and banquet or conference reservations ● Other ancillary goods and services ● Components of package reservations Hotel revenue primarily consists of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking). Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component. We do not disclose the value of unsatisfied performance obligations for contracts with an expected length of one year or less. Due to the nature of our business, our revenue is not significantly impacted by refunds. Cash payments received in advance of guests staying at our hotel are refunded to hotel guests if the guest cancels within the specified time period, before any services are rendered. Refunds related to service are generally recognized as an adjustment to the transaction price at the time the hotel stay occurs or services are rendered. Contract assets and liabilities We do not have any material contract assets as of June 30, 2020 and 2019, other than trade and other receivables, net on our consolidated balance sheets. Our receivables are primarily the result of contracts with customers, which are reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected. We record contract liabilities when cash payments are received or due in advance of guests staying at our hotel, which are presented within accounts payable and other liabilities on our consolidated balance sheets. Contract liabilities decreased to $375,000 as of June 30, 2020 from $1,215,000 as of June 30, 2019. The decrease for the twelve months ended June 30, 2020 was primarily driven by $840,000 revenue recognized that was included in the advanced deposits balance as of June 30, 2019. Contract costs We consider sales commissions earned to be incremental costs of obtaining a contract with our customers. As a practical expedient, we expense these costs as incurred as our contracts with customers are less than one year. |
Investment in Hotel, Net
Investment in Hotel, Net | 12 Months Ended |
Jun. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
Investment in Hotel, Net | NOTE 4 – INVESTMENT IN HOTEL, NET Investment in Hotel consisted of the following as of: Accumulated Net Book June 30, 2020 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 1,775,000 (291,000 ) 1,484,000 Furniture and equipment 30,528,000 (27,498,000 ) 3,030,000 Building and improvements 55,614,000 (28,771,000 ) 26,843,000 Investment in Hotel, net $ 89,041,000 $ (56,560,000 ) $ 32,481,000 Accumulated Net Book June 30, 2019 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 521,000 (35,000 ) 486,000 Furniture and equipment 30,585,000 (26,840,000 ) 3,745,000 Building and improvements 55,488,000 (27,491,000 ) 27,997,000 Investment in Hotel, net $ 87,718,000 $ (54,366,000 ) $ 33,352,000 |
Investment in Real Estate
Investment in Real Estate | 12 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Investment in Real Estate | NOTE 5 – INVESTMENT IN REAL ESTATE In August 2007, the Company agreed to acquire 50% interest in InterGroup Uluniu, Inc., a Hawaiian corporation and a 100% owned subsidiary of InterGroup, for $973,000, which represents an amount equal to the costs paid by InterGroup for the acquisition and carrying costs of approximately two acres of unimproved land held for development located in Maui, Hawaii. As a related party transaction, the fairness of the financial terms of the transaction were reviewed and approved by the independent director of the Company. |
Investment in Marketable Securi
Investment in Marketable Securities | 12 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Marketable Securities | NOTE 6 - INVESTMENT IN MARKETABLE SECURITIES The Company’s investment in marketable securities consists primarily of corporate equities. The Company has also invested in income producing securities, which may include interests in real estate-based companies and REITs, where financial benefit could insure to its shareholders through income and/or capital gain. As of June 30, 2020 and 2019, 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 June 30, 2020 Corporate Equities $ 3,955,000 $ 66,000 $ (3,456,000 ) $ (3,390,000 ) $ 565,000 As of June 30, 2019 Corporate Equities $ 6,923,000 $ 240,000 $ (5,738,000 ) $ (5,498,000 ) $ 1,425,000 As of June 30, 2020 and 2019, approximately 60% and 24% of the investment marketable securities balance above is comprised of the common stock of Comstock Mining Inc. (“Comstock” – NYSE AMERICAN: LODE). As of June 30, 2020 and 2019, the Company had $3,448,000 and $5,697,000, respectively, of unrealized losses related to securities held for over one year; of which $3,400,000 and $5,666,000 are related to its investment in Comstock, respectively. For the fiscal year ended June 30, 2020, the decrease in unrealized losses is a result of reclassing $2,266,000 net unrealized gain related to Comstock that was included in the cost basis as of June 30, 2019. Net loss on marketable securities on the statement of operations is comprised of realized and unrealized losses. Below is the breakdown of the two components for the years ended June 30, 2020 and 2019, respectively. For the year ended June 30, 2020 2019 Realized loss on marketable securities $ (177,000 ) $ (112,000 ) Unrealized loss on marketable securities related to Comstock - (124,000 ) Unrealized loss on marketable securities (145,000 ) (154,000 ) Net loss on marketable securities $ (322,000 ) $ (390,000 ) |
Other Investments, Net
Other Investments, Net | 12 Months Ended |
Jun. 30, 2020 | |
Other Investments [Abstract] | |
Other Investments, Net | NOTE 7 – OTHER INVESTMENTS, NET The Company may also invest, with the approval of the Executive Strategic Real Estate and 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 June 30, 2020 June 30, 2019 Private equity hedge fund, at cost $ 57,000 $ 137,000 Other investments 30,000 59,000 $ 87,000 $ 196,000 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 8 - FAIR VALUE MEASUREMENTS The carrying values of the Company’s financial instruments not required to be carried at fair value on a recurring basis approximate fair value due to their short maturities (i.e., accounts receivable, other assets, accounts payable and other liabilities, due to securities broker and obligations for securities sold) or the nature and terms of the obligation (i.e., other notes payable and mortgage notes payable). The assets measured at fair value on a recurring basis are as follows: As of June 30, 2020 Level 1 Assets: Investment in marketable securities: Basic materials $ 377,000 REITs and real estate companies 162,000 Energy 26,000 $ 565,000 As of June 30, 2019 Level 1 Assets: Investment in marketable securities: REITs and real estate companies $ 451,000 Basic materials 351,000 Consumer cyclical 318,000 Other 305,000 $ 1,425,000 The fair values of investments in marketable securities are determined by the most recently traded price of each security at the balance sheet date. Financial assets that are measured at fair value on a non-recurring basis and are not included in the tables above include “Other investments in non-marketable securities,” that were initially measured at cost and have been written down to fair value as a result of impairment or adjusted to record the fair value of new instruments received (i.e., preferred shares) in exchange for old instruments (i.e., debt instruments). The following table shows the fair value hierarchy for these assets measured at fair value on a non-recurring basis as follows: Net loss for the year Assets Level 3 June 30, 2020 ended June 30, 2020 Other non-marketable investments $ 87,000 $ 87,000 $ (80,000 ) Net loss for the year Assets Level 3 June 30, 2019 ended June 30, 2019 Other non-marketable investments $ 196,000 $ 196,000 $ (36,000 ) For fiscal year ended June 30, 2020 and 2019, we received distribution from other non-marketable investments of $29,000 and $36,000, respectively. Other investments in non-marketable securities are carried at cost net of any impairment loss. The Company has no significant influence or control over the entities that issue these investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. When determining the fair value of these investments on a non-recurring basis, the Company uses valuation techniques such as the market approach and the unobservable inputs include factors such as conversion ratios and the stock price of the underlying convertible instruments. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near-term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. |
Other Assets, Net
Other Assets, Net | 12 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets, Net | NOTE 9 – OTHER ASSETS, NET Other assets consist of the following as of June 30: 2020 2019 Inventory - Hotel $ 37,000 $ 61,000 Prepaid expenses 511,000 554,000 Miscellaneous assets, net 283,000 271,000 Total other assets $ 831,000 $ 886,000 |
Related Party and Other Financi
Related Party and Other Financing Transactions | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party and Other Financing Transactions | NOTE 10 – RELATED PARTY AND OTHER FINANCING TRANSACTIONS The following summarizes the balances of related party and other notes payable as of June 30, 2020 and 2019, respectively. As of June 30, 2020 2019 Note payable - InterGroup $ 3,000,000 $ 3,000,000 Note payable - Hilton 3,008,000 3,325,000 Note payable - Interstate 1,646,000 1,896,000 SBA Loan - Justice 4,719,000 - Total related party and other notes payable $ 12,373,000 $ 8,221,000 On July 2, 2014, the Partnership obtained from InterGroup 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 July 1, 2021. Note payable to Hilton (Franchisor) is 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. On February 1, 2017, Justice entered into an HMA with 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 On April 9, 2020, Justice entered into a loan agreement (“SBA Loan”) with CIBC Bank USA under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. Justice received proceeds of $4,719,000 from the SBA Loan. In accordance with the requirements of the CARES Act, the Company used proceeds from the SBA Loan primarily for payroll costs. As of June 30, 2020, Justice had used $3,568,000 in qualified expenses and had a balance of $1,151,000 available for future qualified expenses. The SBA Loan is scheduled to mature on April 9, 2022 with a 1.00% interest rate and is subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration under the CARES Act. All payments of principal and interest are deferred until October 2020, and the repayment obligations under the loan may be forgiven if the funds are used for payroll and other qualified expenses. Justice anticipates applying for loan forgiveness shortly. All unforgiven portion of the principal and accrued interest will be due at maturity. As of June 30, 2020, the Company had finance lease obligations outstanding of $1,098,000. These finance leases expire in various years through 2023 at rates ranging from 4.62% to 6.25% per annum. Minimum future lease payments for assets under finance leases as of June 30, 2020 are as follows: For the year ending June 30, 2021 $ 503,000 2022 492,000 2023 188,000 Total minimum lease payments 1,183,000 Less interest on finance lease (85,000 ) Present value of future minimum lease payments $ 1,098,000 Future minimum principal payments for all related party and other financing transactions are as follows: For the year ending June 30, 2021 $ 1,016,000 2022 8,752,000 2023 750,000 2024 567,000 2025 567,000 Thereafter 1,819,000 $ 13,471,000 As of June 30, 2020 and 2019, the Company had accounts payable to related party of $2,385,000 and $2,122,000, respectively. These are amounts due to InterGroup and represent certain shared costs and expenses, primarily general and administrative expenses, rent, insurance and other expenses that are allocated among the Company, Santa Fe and InterGroup. The Company’s Board of Directors is currently comprised of directors John V. Winfield, William J. Nance, John C. Love, Jerold R. Babin, and Steve Grunwald. All of the Company’s directors also serve as directors of InterGroup except for Mr. Grunwald. Messrs. Winfield and Nance also serve on the Board of Santa Fe. Mr. Winfield also serves as Managing Director of Justice. John V. Winfield serves as Chief Executive Officer and Chairman of the Company, Santa Fe, and InterGroup. Effective June 2016, Mr. Winfield became the Managing Director of Justice. Depending on certain market conditions and various risk factors, the Chief Executive Officer, 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. |
Mortgage Notes Payable
Mortgage Notes Payable | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | NOTE 11 – MORTGAGE NOTES PAYABLE On December 18, 2013: (i) Justice Operating Company, LLC, a Delaware limited liability company (“Operating”), entered into a loan agreement (“Mortgage Loan Agreement”) with Bank of America (“Mortgage Lender”); and (ii) Justice Mezzanine Company, a Delaware limited liability company (“Mezzanine”), entered into a mezzanine loan agreement (“Mezzanine Loan Agreement” and, together with the Mortgage Loan Agreement, the “Loan Agreements”) with ISBI San Francisco Mezz Lender LLC (“Mezzanine Lender” and, together with Mortgage Lender, the “Lenders”). The Partnership is the sole member of Mezzanine, and Mezzanine is the sole member of Operating. The Loan Agreements provide for a $97,000,000 Mortgage Loan and a $20,000,000 Mezzanine Loan. The proceeds of the Loan Agreements were used to fund the redemption of limited partnership interests and the pay-off of the prior mortgage. 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 and matures in January 2024. The term of the loan is ten years with interest only due in the first three years and principal and interest payments to be made during the remaining seven years of the loan based on a thirty-year amortization schedule. The Mortgage Loan also requires payments for impounds related to property tax, insurance and capital improvement reserves. As additional security for the Mortgage Loan, there is a limited guaranty (“Mortgage 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 Loan had an interest rate of 9.75% per annum and a maturity date of January 1, 2024. Interest only payments were due monthly. On July 31, 2019, Mezzanine refinanced the Mezzanine Loan by entering into a new mezzanine loan agreement (“New Mezzanine Loan Agreement”) with Cred Reit Holdco LLC in the amount of $20,000,000. The prior Mezzanine Loan was paid off. Interest rate on the new mezzanine loan is 7.25% and the loan matures on January 1, 2024. Interest only payments are due monthly. As additional security for the new mezzanine loan, there is a limited guaranty executed by the Company in favor of Cred Reit Holdco LLC (the “Mezzanine Guaranty” and, together with the Mortgage Guaranty, the “Guaranties”). The Guaranties are limited to what are commonly referred to as “bad boy” acts, including: (i) fraud or intentional misrepresentations; (ii) gross negligence or willful misconduct; (iii) misapplication or misappropriation of rents, security deposits, insurance or condemnation proceeds; and (iv) failure to pay taxes or insurance. The Guaranties are full recourse guaranties under identified circumstances, including failure to maintain “single purpose” status which is a factor in a consolidation of Operating or Mezzanine in a bankruptcy of another person, transfer or encumbrance of the Property in violation of the applicable loan documents, Operating or Mezzanine incurring debts that are not permitted, and the Property becoming subject to a bankruptcy proceeding. Pursuant to the Guaranties, the Partnership is required to maintain a certain minimum net worth and liquidity. Effective as of May 12, 2017, InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental indemnity for 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 June 30, 2020 and 2019, InterGroup is in compliance with both requirements. However, due to the Hotel’s current low occupancy and its negative impact on the Hotel’s cash flow, Justice Operating Company, LLC is not meeting certain of its loan covenants such as the Debt Service Coverage Ratio (“DSCR”) which would trigger the creation of a lock-box and cash sweep by the Lender for all cash collected by the Hotel, and under certain terms, would allow the Lender to request Operating to replace its hotel management company. The DSCR for Operating has been below 1.00 for the last two quarters during fiscal year 2020 while it is required to maintain a DSCR of at least 1.10 to 1.00 for two consecutive quarters. However, such lockbox has been created and utilized from the loan inception and will be in place up to loan maturity regardless of the DSCR. Each of the Loan Agreements contains customary representations and warranties, events of default, reporting requirements, affirmative covenants and negative covenants, which impose restrictions on, among other things, organizational changes of the respective borrower, operations of the Property, agreements with affiliates and third parties. Each of the Loan Agreements also provides for mandatory prepayments under certain circumstances (including casualty or condemnation events) and voluntary prepayments, subject to satisfaction of prescribed conditions set forth in the Loan Agreements. As of June 30, 2020 and 2019, the Company had the following mortgages: June 30, 2020 June 30, 2019 Interest Rate Origination Date Maturity Date $ 92,292,000 $ 93,746,000 Fixed 5.28% December 18, 2013 January 1, 2024 20,000,000 20,000,000 Fixed 9.75% (Fixed 7.25% effective August 1 st December 18, 2013 January 1, 2024 112,292,000 113,746,000 Mortgage notes payable - hotel (896,000 ) (659,000 ) Net debt issuance costs $ 111,396,000 $ 113,087,000 Total mortgage notes payable - hotel Future minimum principle payments for mortgage notes payable are as follows: For the year ending June 30, 2021 $ 1,547,000 2022 1,632,000 2023 1,721,000 2024 107,392,000 $ 112,292,000 |
Management Agreements
Management Agreements | 12 Months Ended |
Jun. 30, 2020 | |
Management Agreements | |
Management Agreements | NOTE 12 – MANAGEMENT AGREEMENTS 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 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 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 key money contribution shall be amortized in equal monthly amounts over an eight (8) year period commencing on the second (2 nd |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | NOTE 13 – CONCENTRATION OF CREDIT RISK As of June 30, 2020 and 2019, all accounts receivables are related to Hotel customers. The Hotel had two customers that accounted for 95%, or $239,000 of accounts receivable at June 30, 2020, and one customer that accounted for 32%, or $272,000 of accounts receivable at June 30, 2019. The Company maintains its cash and cash equivalents and restricted cash with various financial institutions that are monitored regularly for credit quality. At times, such cash and cash equivalents holdings may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) or other federally insured limits. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14 - INCOME TAXES The provision for income tax benefit (expense) consists of the following: For the years ended June 30, 2020 2019 Federal Current tax benefit $ 15,000 $ 165,000 Deferred tax benefit (expense) 1,349,000 (817,000 ) 1,364,000 (652,000 ) State Current tax expense (1,000 ) (16,000 ) Deferred tax benefit (expense) 571,000 (288,000 ) 570,000 (304,000 ) Total income tax benefit (expense) $ 1,934,000 $ (956,000 ) A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows: For the years ended June 30, 2020 2019 Statutory federal tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 9.2 % 6.8 % Disallowed interest 10.3 % - % Other -1.0 % -0.8 % 39.6 % 27.0 % The components of the Company’s deferred tax assets and (liabilities) as of June 30, 2020 and 2019, are as follows: 2020 2019 Deferred tax assets Net operating loss carryforward $ 6,238,000 $ 4,419,000 Investment reserve 674,000 756,000 Interest expense 1,466,000 - Other 1,755,000 1,937,000 10,133,000 7,112,000 Deferred tax liabilities Basis difference in Justice (3,295,000 ) (2,290,000 ) State taxes (368,000 ) (245,000 ) Valuation allowance (496,000 ) (523,000 ) (4,159,000 ) (3,058,000 ) Net deferred tax assets $ 5,974,000 $ 4,054,000 As of June 30, 2020, the Company had net operating loss carryforwards of approximately $20,705,000 and $21,379,000 for federal and state purposes, respectively. These carryforwards expire in varying amount through 2038. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. As of June 30, 2020, it has been determined that there are no uncertain tax positions likely to impact the Company. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates and is subject to examination by federal, state and local jurisdictions, where applicable. As of June 30, 2020, tax years beginning in fiscal years 2015 and 2016 remain open to examination by the major tax jurisdictions, and are subject to the statute of limitations. |
Segment Information
Segment Information | 12 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 15 - 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 years ended June 30, 2020 and 2019, respectively. Segment income from Hotel operations consists of the operation of the Hotel and operation of the garage. Loss from investments consists of net investment gain (loss), dividend and interest income and investment related expenses. As of and for the year Hotel Investment ended June 30, 2020 Operations Transactions Other Total Revenues $ 42,839,000 $ - $ - $ 42,839,000 Segment operating expenses (37,333,000 ) - (747,000 ) (38,080,000 ) Segment income (loss) 5,506,000 - (747,000 ) 4,759,000 Interest expense - mortgage (7,326,000 ) - - (7,326,000 ) Depreciation and amortization expense (2,192,000 ) - - (2,192,000 ) Loss from investments - (398,000 ) - (398,000 ) Income tax benefit - - 1,934,000 1,934,000 Net income (loss) $ (4,012,000 ) $ (398,000 ) $ 1,187,000 $ (3,223,000 ) Total assets $ 49,716,000 $ 652,000 $ 7,186,000 $ 57,554,000 As of and for the year Hotel Investment ended June 30, 2019 Operations Transactions Other Total Revenues $ 59,881,000 $ - $ - $ 59,881,000 Segment operating expenses (44,466,000 ) - (766,000 ) (45,232,000 ) Segment income (loss) 15,415,000 - (767,000 ) 14,649,000 Interest expense - mortgage (7,634,000 ) - - (7,634,000 ) Loss on disposal of assets (398,000 ) - - (398,000 ) Depreciation and amortization expense (2,309,000 ) - - (2,309,000 ) Loss from investments - (438,000 ) - (438,000 ) Income tax expense - - (956,000 ) (956,000 ) Net income (loss) $ 5,074,000 $ (438,000 ) $ (1,722,000 ) $ 2,914,000 Total assets $ 55,664,000 $ 1,621,000 $ 5,269,000 $ 62,554,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 16 - RELATED PARTY TRANSACTIONS As discussed in Note 10 – Related Party and Other Financing Transactions, on July 2, 2014, the Partnership obtained from the InterGroup Corporation an unsecured loan in the principal amount of $4,250,000. The balance of this loan was $3,000,000 as of June 30, 2020 and 2019, and are included in the related party and other notes payable in the consolidated balance sheets. The loan matures on July 1, 2021. In connection with the redemption of limited partnership interests 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 partnership interests, refinancing of Justice’s 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 June 30, 2018, $200,000 of these fees remained payable and were paid off as of June 30, 2019. Certain shared costs and expenses, primarily administrative expenses, rent and insurance are allocated among the Company, Santa Fe and InterGroup based on management’s estimate of the pro rata utilization of resources. For the years ended June 30, 2020 and 2019, these expenses were approximately $72,000 for each year. Four of the Company’s Directors serve as directors of InterGroup and two of the Company’s Directors serve on the Board of Santa Fe. As Chairman of the Executive Strategic Real Estate and Securities Investment Committee, the Company’s President and Chief Executive Officer (CEO), John V. Winfield, directs the investment activity of the Company in public and private markets pursuant to authority granted by the Board of Directors. Mr. Winfield also serves as Chief Executive Officer and Chairman of Santa Fe and InterGroup and oversees the investment activity of those companies. Effective June 2016, Mr. Winfield became the Managing Director of Justice. 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. Such investments align the interests of the Company with the interests of these related parties because it places the personal resources of the Chief Executive Officer and the resources of Santa Fe and InterGroup, at risk in substantially the same manner as the Company in connection with investment decisions made on behalf of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 17 – COMMITMENTS AND CONTINGENCIES Cash Management Agreement As part of the Hotel refinancing effective December 18, 2013, Operating entered into a Cash Management Agreement with Bank of America, N.A. (“Lender”) and Wells Fargo Bank, N.A. (“Cash Management Bank”) whereby all cash received by Operating is to be deposited into a business checking account controlled by the Cash Management Bank up to the loan maturity date. Additionally, other terms of the Cash Management Agreement provide that effective February 2019 or upon a Property Improvement Plan (“PIP”) requirement by Hilton (“Franchisor”) deemed the “Cash Sweep Period” during which all excess cash generated by Operating beyond the monthly budgeted expenses and debt services including principal and interest, insurance reserves, real estate taxes reserve, furniture fixtures and equipment (“FF&E”) reserves, for the senior and mezzanine loans, will be held by the Cash Management Bank for future hotel improvements as required by the date or a PIP. Currently, any and all funds are being controlled by the Cash Management Bank according to the Cash Management Agreement. Franchise Agreements The Partnership entered into a Franchise License Agreement (the “License Agreement”) with the HLT Existing Franchise Holding LLC (“Hilton”) on December 10, 2004. The term of the License agreement was for an initial period of 15 years commencing on the date the Hotel began operating as a Hilton hotel, with an option to extend the License Agreement for another five years, subject to certain conditions. On June 26, 2015, Operating and Hilton entered into an amended franchise agreement which amongst other things extended the License Agreement through 2030, and also provided the Partnership certain key money cash incentives to be earned through 2030. Since the opening of the Hotel as a full brand Hilton in January 2006, the Partnership has incurred monthly royalties, program fees and information technology recapture charges equal to a percentage of the Hotel’s gross room revenue. Fees for such services during fiscal year 2020 and 2019 totaled approximately $3.0 million and $4.1 million, respectively. Hotel Employees Effective February 3, 2017, the Partnership had no employees. On February 3, 2017, Interstate assumed all labor union agreements and retained employees of their choice to continue providing services to the Hotel. As of June 30, 2020, approximately 87% of those employees were represented by one of three labor unions, and their terms of employment were determined under various collective bargaining agreements (“CBAs”) to which the Partnership was a party. During the fiscal year ended June 30, 2020, the Partnership renewed the CBA for Local 2 (Hotel and Restaurant Employees). CBA for Local 856 (International Brotherhood of Teamsters) will expire on December 31, 2022. CBA for Local 39 (Stationary Engineers) will expire on July 31, 2024. Negotiation of collective bargaining agreements, which includes not just terms and conditions of employment, but scope and coverage of employees, is a regular and expected course of business operations for the Partnership and Interstate. The Partnership expects and anticipates that the terms of conditions of CBAs will have an impact on wage and benefit costs, operating expenses, and certain hotel operations during the life of each CBA, and incorporates these principles into its operating and budgetary practices. Legal Matters The Company may be subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company will defend itself vigorously against any such claims. Management does not believe that the impact of such matters will have a material effect on the financial conditions or result of operations when resolved. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Segment Information | NOTE 18 – SUBSEQUENT EVENTS On August 19, 2020, Operating entered into a consent agreement whereby the Lender agreed to release certain PIP deposits held in escrow for the benefit of Operating but restricted to be utilized specifically for a future PIP. Since Franchisor will not require a PIP until the expiration of the franchise agreement in January 2030 or upon the sale of the Hotel, on August 19, 2020, Operating received PIP deposits in the amount of $2,379,000 held by Lender. The funds were utilized to fund operating expenses, including franchise and management fees and other expenses. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business 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”). As of June 30, 2020, 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 83.7%-owned subsidiary of The InterGroup Corporation (“InterGroup”), a public company. InterGroup also directly owns approximately 13.7% of the common stock of Portsmouth. Justice, through its subsidiaries Justice Operating Company, LLC (“Operating”) and Justice Mezzanine Company, LLC (“Mezzanine”) owns and operates 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. Mezzanine is a wholly owned subsidiary 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”) through January 31, 2030. Justice entered into a Hotel management agreement (“HMA”) with Interstate Management Company, LLC (“Interstate”) to manage the Hotel, along with its five-level parking garage, with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of ten years commencing on the takeover date and automatically renews for successive one (1) year periods, to not exceed five years in the aggregate, subject to certain conditions. Under the terms of the HMA, base management fee payable to Interstate shall be one and seven-tenths percent (1.70%) of total Hotel revenue. The HMA also provides for Interstate to advance a key money incentive fee to the Hotel for capital improvements in the form of a self-exhausting, interest free note payable in the amount of $2,000,000 in a separate key money agreement. As of June 30, 2020 and 2019, balance of the key money including accrued interests are $1,009,000 and $2,049,000, respectively, and are included in restricted cash in the consolidated balance sheets. As of June 30, 2020 and 2019, balance of the unamortized portion of the key money are $1,646,000 and $1,896,000, respectively, and are included in the related party notes payable in the consolidated balance sheets. On October 25, 2019, Interstate merged with Aimbridge Hospitality, North America’s largest independent hotel management firm. With the completion of the merger, the newly combined company will be positioned under the Aimbridge Hospitality name in the Americas. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and Justice. All significant inter-company transactions and balances have been eliminated. |
Investment in Hotel, Net | Investment in Hotel, Net Property and equipment are stated at cost. Building improvements are depreciated on a straight-line basis over their useful lives ranging from 3 to 39 years. Furniture, fixtures, and equipment are depreciated on a straight-line basis over their useful lives ranging from 3 to 7 years. Repairs and maintenance are charged to expense as incurred. Costs of significant renewals and improvements are capitalized and depreciated over the shorter of its remaining estimated useful life or life of the asset. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts; any resulting gain or loss is included in other income (expenses). The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with generally accepted accounting principles (“GAAP”). If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Partnership will recognize an impairment loss equal to the difference between the assets’ carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. For a depreciable asset, the new cost will be depreciated over the asset’s remaining useful life. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the property. No impairment losses were recorded for the years ended June 30, 2020 and 2019. |
Investment in Marketable Securities | Investment in Marketable Securities Marketable securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. Marketable securities are classified as trading securities with all unrealized gains and losses on the Company’s investment portfolio recorded through the consolidated statements of operations. |
Other Investments, Net | Other Investments, Net Other investments include non-marketable securities (carried at cost, net of any impairments loss) and non –marketable warrants (carried at fair value). The Company has no significant influence or control over the entities that issue these investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. For the years ended June 30, 2020 and 2019, the Company recorded impairment losses related to other investments of $80,000 and $36,000, respectively. As of June 30, 2020 and 2019, the allowance for impairment losses was $2,257,000 and $2,256,000, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased and are carried at cost, which approximates fair value. As of June 30, 2020 and 2019, the Company does not have any cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash is comprised of amounts held by lenders for payment of real estate taxes, insurance, replacement and capital addition reserves for the Hotel. It also includes key money received from Interstate that is restricted for capital improvements. |
Accounts Receivable - Hotel, Net | Accounts Receivable - Hotel, Net Accounts receivable from Hotel customers are carried at cost less an allowance for doubtful accounts that is based on management’s assessment of the collectability of accounts receivable. As of June 30, 2020 and 2019, the allowance for doubtful accounts was $25,000 and $4,000, respectively. The Partnership extends unsecured credit to its customers but mitigates the associated credit risk by performing ongoing credit evaluations of its customers. |
Other Assets, Net | Other Assets, Net Other assets include prepaid insurance, accounts receivable, franchise fees, and other miscellaneous assets. Franchise fees are stated at cost and amortized over the life of the agreement (15 years). |
Income Taxes | Income Taxes The Company consolidates Justice (“Hotel”) for financial reporting purposes and is not taxed on its non-controlling interest in the Hotel. The income tax benefit (expense) during the fiscal year ended June 30, 2020 and 2019 represent the income tax effect on the Company’s pretax (loss) income which includes its share in the net (loss) income of the Hotel. Deferred income taxes are calculated under the liability method. Deferred income tax assets and liabilities are based on differences between the financial statement and tax basis of assets and liabilities at the current enacted tax rates. Changes in deferred income tax assets and liabilities are included as a component of income tax expense. Changes in deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets where realization is not likely. We have considered the income tax accounting and disclosure implications of the relief provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020. The effect of tax law changes is required to be recognized either in the interim period in which the legislation is enacted or reflected in the computation of the annual effective tax rate, depending on the nature of the change. As of June 30, 2020, we evaluated the income tax provisions of the CARES Act and have determined there to be no material effect on the fiscal year tax provision. We will continue to evaluate the income tax provisions of the CARES Act and monitor the tax law changes that could have income tax accounting and disclosure implications. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. |
Due to Securities Broker | Due to Securities Broker Various securities brokers have advanced funds to the Company for the purchase of marketable securities under standard margin agreements. These advanced funds are recorded as a liability. |
Obligations for Securities Sold | 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 consolidated statement of operations. |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities include trade payables, advance customer deposits, accrued wages, accrued real estate taxes, and other liabilities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting standards for fair value measurement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: Level 1 Level 2 Level 3 |
Revenue Recognition | Revenue Recognition On July 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in Hotel operating expenses in the consolidated statements of operations. Advertising costs were $176,000 and $282,000 for the years ended June 30, 2020 and 2019, respectively. |
Basic and Diluted Income (Loss) per Share | Basic and Diluted Income (Loss) per Share Basic income (loss) per share is calculated based upon the weighted average number of common shares outstanding during each fiscal year. As of June 30, 2020 and 2019, the Company did not have any potentially dilutive securities outstanding. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to the recording of allowance for doubtful accounts and allowance for impairment losses which are based on management’s assessment of the collectability of accounts receivable and the fair market value of nonmarketable securities, respectively, as of the end of the fiscal year. Actual results may differ from those estimates. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability and are amortized over the life of the debt. Loan amortization costs are included in interest expense in the consolidated statement of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements On June 16, 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregation by Revenue Streams | The following table present our revenue disaggregated by revenue streams. For the year ended June 30, 2020 2019 Hotel revenues: Hotel rooms $ 36,465,000 $ 51,243,000 Food and beverage 3,529,000 5,353,000 Garage 2,368,000 2,875,000 Other operating departments 477,000 410,000 Total Hotel revenue $ 42,839,000 $ 59,881,000 |
Investment in Hotel, Net (Table
Investment in Hotel, Net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
Schedule of Investment in Hotel, Net | Investment in Hotel consisted of the following as of: Accumulated Net Book June 30, 2020 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 1,775,000 (291,000 ) 1,484,000 Furniture and equipment 30,528,000 (27,498,000 ) 3,030,000 Building and improvements 55,614,000 (28,771,000 ) 26,843,000 Investment in Hotel, net $ 89,041,000 $ (56,560,000 ) $ 32,481,000 Accumulated Net Book June 30, 2019 Cost Depreciation Value Land $ 1,124,000 $ - $ 1,124,000 Finance lease ROU assets 521,000 (35,000 ) 486,000 Furniture and equipment 30,585,000 (26,840,000 ) 3,745,000 Building and improvements 55,488,000 (27,491,000 ) 27,997,000 Investment in Hotel, net $ 87,718,000 $ (54,366,000 ) $ 33,352,000 |
Investment in Marketable Secu_2
Investment in Marketable Securities, Net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Changes in Unrealized Gains and Losses on Investments | 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 June 30, 2020 Corporate Equities $ 3,955,000 $ 66,000 $ (3,456,000 ) $ (3,390,000 ) $ 565,000 As of June 30, 2019 Corporate Equities $ 6,923,000 $ 240,000 $ (5,738,000 ) $ (5,498,000 ) $ 1,425,000 |
Schedule of Net Loss on Marketable Securities | Below is the breakdown of the two components for the years ended June 30, 2020 and 2019, respectively. For the year ended June 30, 2020 2019 Realized loss on marketable securities $ (177,000 ) $ (112,000 ) Unrealized loss on marketable securities related to Comstock - (124,000 ) Unrealized loss on marketable securities (145,000 ) (154,000 ) Net loss on marketable securities $ (322,000 ) $ (390,000 ) |
Other Investments, Net (Tables)
Other Investments, Net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Other Investments [Abstract] | |
Schedule of Other Investments, Net | Other investments, net consist of the following: Type June 30, 2020 June 30, 2019 Private equity hedge fund, at cost $ 57,000 $ 137,000 Other investments 30,000 59,000 $ 87,000 $ 196,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets Measured on Recurring Basis | The assets measured at fair value on a recurring basis are as follows: As of June 30, 2020 Level 1 Assets: Investment in marketable securities: Basic materials $ 377,000 REITs and real estate companies 162,000 Energy 26,000 $ 565,000 As of June 30, 2019 Level 1 Assets: Investment in marketable securities: REITs and real estate companies $ 451,000 Basic materials 351,000 Consumer cyclical 318,000 Other 305,000 $ 1,425,000 |
Schedule of Fair Value, Assets Measured on Nonrecurring Basis | 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 year Assets Level 3 June 30, 2020 ended June 30, 2020 Other non-marketable investments $ 87,000 $ 87,000 $ (80,000 ) Net loss for the year Assets Level 3 June 30, 2019 ended June 30, 2019 Other non-marketable investments $ 196,000 $ 196,000 $ (36,000 ) |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following as of June 30: 2020 2019 Inventory - Hotel $ 37,000 $ 61,000 Prepaid expenses 511,000 554,000 Miscellaneous assets, net 283,000 271,000 Total other assets $ 831,000 $ 886,000 |
Related Party and Other Finan_2
Related Party and Other Financing Transactions (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party and Other Notes Payable | The following summarizes the balances of related party and other notes payable as of June 30, 2020 and 2019, respectively. As of June 30, 2020 2019 Note payable - InterGroup $ 3,000,000 $ 3,000,000 Note payable - Hilton 3,008,000 3,325,000 Note payable - Interstate 1,646,000 1,896,000 SBA Loan - Justice 4,719,000 - Total related party and other notes payable $ 12,373,000 $ 8,221,000 |
Schedule of Minimum Future Lease Payments for Assets | Minimum future lease payments for assets under finance leases as of June 30, 2020 are as follows: For the year ending June 30, 2021 $ 503,000 2022 492,000 2023 188,000 Total minimum lease payments 1,183,000 Less interest on finance lease (85,000 ) Present value of future minimum lease payments $ 1,098,000 |
Schedule of Future Minimum Principle Payments | Future minimum principal payments for all related party and other financing transactions are as follows: For the year ending June 30, 2021 $ 1,016,000 2022 8,752,000 2023 750,000 2024 567,000 2025 567,000 Thereafter 1,819,000 $ 13,471,000 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgages | As of June 30, 2020 and 2019, the Company had the following mortgages: June 30, 2020 June 30, 2019 Interest Rate Origination Date Maturity Date $ 92,292,000 $ 93,746,000 Fixed 5.28% December 18, 2013 January 1, 2024 20,000,000 20,000,000 Fixed 9.75% (Fixed 7.25% effective August 1 st December 18, 2013 January 1, 2024 112,292,000 113,746,000 Mortgage notes payable - hotel (896,000 ) (659,000 ) Net debt issuance costs $ 111,396,000 $ 113,087,000 Total mortgage notes payable - hotel |
Schedule of Future Minimum Principle Payments | Future minimum principle payments for mortgage notes payable are as follows: For the year ending June 30, 2021 $ 1,547,000 2022 1,632,000 2023 1,721,000 2024 107,392,000 $ 112,292,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Tax Benefit | The provision for income tax benefit (expense) consists of the following: For the years ended June 30, 2020 2019 Federal Current tax benefit $ 15,000 $ 165,000 Deferred tax benefit (expense) 1,349,000 (817,000 ) 1,364,000 (652,000 ) State Current tax expense (1,000 ) (16,000 ) Deferred tax benefit (expense) 571,000 (288,000 ) 570,000 (304,000 ) Total income tax benefit (expense) $ 1,934,000 $ (956,000 ) |
Schedule of Statutory Federal Income Tax Rate | A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows: For the years ended June 30, 2020 2019 Statutory federal tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 9.2 % 6.8 % Disallowed interest 10.3 % - % Other -1.0 % -0.8 % 39.6 % 27.0 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s deferred tax assets and (liabilities) as of June 30, 2020 and 2019, are as follows: 2020 2019 Deferred tax assets Net operating loss carryforward $ 6,238,000 $ 4,419,000 Investment reserve 674,000 756,000 Interest expense 1,466,000 - Other 1,755,000 1,937,000 10,133,000 7,112,000 Deferred tax liabilities Basis difference in Justice (3,295,000 ) (2,290,000 ) State taxes (368,000 ) (245,000 ) Valuation allowance (496,000 ) (523,000 ) (4,159,000 ) (3,058,000 ) Net deferred tax assets $ 5,974,000 $ 4,054,000 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information below represents reporting segments for the years ended June 30, 2020 and 2019, respectively. Segment income from Hotel operations consists of the operation of the Hotel and operation of the garage. Loss from investments consists of net investment gain (loss), dividend and interest income and investment related expenses. As of and for the year Hotel Investment ended June 30, 2020 Operations Transactions Other Total Revenues $ 42,839,000 $ - $ - $ 42,839,000 Segment operating expenses (37,333,000 ) - (747,000 ) (38,080,000 ) Segment income (loss) 5,506,000 - (747,000 ) 4,759,000 Interest expense - mortgage (7,326,000 ) - - (7,326,000 ) Depreciation and amortization expense (2,192,000 ) - - (2,192,000 ) Loss from investments - (398,000 ) - (398,000 ) Income tax benefit - - 1,934,000 1,934,000 Net income (loss) $ (4,012,000 ) $ (398,000 ) $ 1,187,000 $ (3,223,000 ) Total assets $ 49,716,000 $ 652,000 $ 7,186,000 $ 57,554,000 As of and for the year Hotel Investment ended June 30, 2019 Operations Transactions Other Total Revenues $ 59,881,000 $ - $ - $ 59,881,000 Segment operating expenses (44,466,000 ) - (766,000 ) (45,232,000 ) Segment income (loss) 15,415,000 - (767,000 ) 14,649,000 Interest expense - mortgage (7,634,000 ) - - (7,634,000 ) Loss on disposal of assets (398,000 ) - - (398,000 ) Depreciation and amortization expense (2,309,000 ) - - (2,309,000 ) Loss from investments - (438,000 ) - (438,000 ) Income tax expense - - (956,000 ) (956,000 ) Net income (loss) $ 5,074,000 $ (438,000 ) $ (1,722,000 ) $ 2,914,000 Total assets $ 55,664,000 $ 1,621,000 $ 5,269,000 $ 62,554,000 |
Business and Significant Acco_2
Business and Significant Accounting Policies (Details Narrative) - USD ($) | Feb. 01, 2017 | Feb. 01, 2017 | Jun. 30, 2020 | Jun. 30, 2019 |
Ownership percentage | 20.00% | |||
Related party transaction initial agreement term | 10 years | 10 years | ||
Key money incentive advance to related party | $ 2,000,000 | $ 2,000,000 | ||
Accrued interest | $ 1,009,000 | 2,049,000 | ||
Unamortized portion of key money payment | 1,646,000 | 1,896,000 | ||
Impairment losses on other investments | 80,000 | 36,000 | ||
Allowance for impairment losses | 2,257,000 | 2,256,000 | ||
Cash equivalents | ||||
Other assets amortization period | 15 years | |||
Allowance for doubtful accounts | $ 25,000 | 4,000 | ||
Advertising expense | $ 176,000 | $ 282,000 | ||
Potentially dilutive securities outstanding | ||||
Hotel [Member] | ||||
Impairment losses | ||||
Hotel [Member] | Minimum [Member] | Building and Improvements [Member] | ||||
Property, plant and equipment, useful life | 3 years | 39 years | ||
Hotel [Member] | Minimum [Member] | Furniture and Equipment [Member] | ||||
Property, plant and equipment, useful life | 3 years | 7 years | ||
Interstate Management Company, LLC [Member] | ||||
Related party transaction initial agreement term | 10 years | |||
Related party transaction agreement term, description | Justice entered into a Hotel management agreement ("HMA") with Interstate Management Company, LLC ("Interstate") to manage the Hotel, along with its five-level parking garage, with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of ten years commencing on the takeover date and automatically renews for successive one (1) year periods, to not exceed five years in the aggregate, subject to certain conditions. | |||
Management fee payable, percentage on revenue | 1.70% | |||
Key money incentive advance to related party | $ 2,000,000 | |||
Parent Company [Member] | Santa Fe Financial Corporation [Member] | ||||
Ownership percentage | 68.80% | |||
Parent Company [Member] | InterGroup Corporation [Member] | ||||
Ownership percentage | 13.70% | |||
Justice Investors Limited Partnership [Member] | ||||
Subsidiary of limited liability company or limited partnership, ownership interest | 93.30% | |||
Santa Fe Financial Corporation [Member] | InterGroup Corporation [Member] | ||||
Ownership percentage | 87.30% |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | Aug. 28, 2020 | Apr. 30, 2020 | Apr. 09, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 19, 2020 | Jun. 18, 2020 |
Net cash (used in) provided by operating activities | $ (5,404,000) | $ 9,369,000 | ||||||
Cash, cash equivalents, and restricted cash | $ 16,385,000 | 16,385,000 | ||||||
Proceeds from loan | $ 6,814,000 | |||||||
Qualified expenses | 3,568,000 | |||||||
Future qualified expenses | $ 1,151,000 | $ 1,151,000 | ||||||
Sole General Partner [Member] | ||||||||
Voting interest | 93.30% | 93.30% | ||||||
California [Member] | ||||||||
Proceeds from loan | $ 1,144,000 | |||||||
Subsequent Event [Member] | California [Member] | ||||||||
Proceeds from sale of appartment | $ 15,650,000 | |||||||
Gain on sale of appartment | 12,026,000 | |||||||
Subsequent Event [Member] | Hotel [Member] | PIP [Member] | ||||||||
Deposits | $ 2,379,000 | |||||||
PIP [Member] | ||||||||
Cash, cash equivalents, and restricted cash | 2,432,000 | $ 2,432,000 | ||||||
Furniture and Equipment [Member] | ||||||||
Cash, cash equivalents, and restricted cash | 7,486,000 | 7,486,000 | ||||||
Senior Lender Wells Fargo Bank [Member] | ||||||||
Cash, cash equivalents, and restricted cash | 10,666,000 | 10,666,000 | ||||||
CIBC Bank USA [Member] | ||||||||
Revolving line of credit amount | $ 8,000,000 | |||||||
Line of credit, available to be drawn | $ 5,000,000 | $ 5,000,000 | ||||||
CIBC Bank USA [Member] | CARES Act [Member] | ||||||||
Proceeds from loan | $ 4,719,000 | |||||||
Debt maturity date | Apr. 9, 2022 | |||||||
Debt interest rate | 1.00% | |||||||
CIBC Bank USA [Member] | Subsequent Event [Member] | ||||||||
Line of credit, available to be drawn | 8,000,000 | |||||||
Santa Fe Financial Corporation [Member] | Subsequent Event [Member] | InterGroup Corporation [Member] | ||||||||
Payment of debt | 662,000 | |||||||
Santa Fe Financial Corporation [Member] | Subsequent Event [Member] | California [Member] | ||||||||
Proceeds from sale of appartment | 12,163,000 | |||||||
Gain on sale of appartment | $ 2,985,000 |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer, liability | $ 375,000 | $ 1,215,000 |
Contract with customer, liability, revenue recognized | $ 840,000 |
Revenue - Schedule of Revenue D
Revenue - Schedule of Revenue Disaggregation by Revenue Streams (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Total hotel revenue | $ 42,839,000 | $ 59,881,000 |
Hotel Rooms [Member] | ||
Total hotel revenue | 36,465,000 | 51,243,000 |
Food and Beverage [Member] | ||
Total hotel revenue | 3,529,000 | 5,353,000 |
Garage [Member] | ||
Total hotel revenue | 2,368,000 | 2,875,000 |
Other Operating Departments [Member] | ||
Total hotel revenue | $ 477,000 | $ 410,000 |
Investment in Hotel, Net - Sche
Investment in Hotel, Net - Schedule of Investment in Hotel, Net (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Cost | $ 89,041,000 | $ 87,718,000 |
Accumulated Depreciation | (56,560,000) | (54,366,000) |
Net Book Value | 32,481,000 | 33,352,000 |
Land [Member] | ||
Cost | 1,124,000 | 1,124,000 |
Accumulated Depreciation | ||
Net Book Value | 1,124,000 | 1,124,000 |
Finance Lease ROU Assets [Member] | ||
Cost | 1,775,000 | 521,000 |
Accumulated Depreciation | (291,000) | (35,000) |
Net Book Value | 1,484,000 | 486,000 |
Furniture and Equipment [Member] | ||
Cost | 30,528,000 | 30,585,000 |
Accumulated Depreciation | (27,498,000) | (26,840,000) |
Net Book Value | 3,030,000 | 3,745,000 |
Building and Improvements [Member] | ||
Cost | 55,614,000 | 55,488,000 |
Accumulated Depreciation | (28,771,000) | (27,491,000) |
Net Book Value | $ 26,843,000 | $ 27,997,000 |
Investment in Real Estate (Deta
Investment in Real Estate (Details Narrative) | 1 Months Ended |
Aug. 31, 2007USD ($) | |
InterGroup Uluniu, Inc [Member] | |
Percentage of voting interests acquired | 50.00% |
Business acquisition, purchase price of acquired entity | $ 973,000 |
Hawaiian Corporation [Member] | |
Percentage of voting interests acquired | 100.00% |
Investment in Marketable Secu_3
Investment in Marketable Securities, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Securities Held For Over One Year [Member] | ||
Unrealized losses related to securities | $ 3,448,000 | $ 5,697,000 |
Comstock Mining, Inc [Member] | ||
Percentage of investment in marketable securities | 60.00% | 24.00% |
Unrealized losses related to securities | $ 3,400,000 | $ 5,666,000 |
Unrealized gain on securities reclassed | $ 2,266,000 |
Investment in Marketable Secu_4
Investment in Marketable Securities, Net - Schedule of Changes in Unrealized Gains and Losses on Investments (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Gross Unrealized Loss | $ (145,000) | $ (278,000) |
Net Unrealized Loss | (322,000) | (266,000) |
Corporate Equities [Member] | ||
Cost | 3,955,000 | 6,923,000 |
Gross Unrealized Gain | 66,000 | 240,000 |
Gross Unrealized Loss | (3,456,000) | (5,738,000) |
Net Unrealized Loss | (3,390,000) | (5,498,000) |
Fair Value | $ 565,000 | $ 1,425,000 |
Investment in Marketable Secu_5
Investment in Marketable Securities, Net - Schedule of Net Loss on Marketable Securities (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||
Realized loss on marketable securities | $ (177,000) | $ (112,000) |
Unrealized loss on marketable securities related to Comstock | (124,000) | |
Unrealized loss on marketable securities | (145,000) | (154,000) |
Net loss on marketable securities | $ (322,000) | $ (390,000) |
Other Investments, Net - Schedu
Other Investments, Net - Schedule of Other Investments, Net (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Other investments, net | $ 87,000 | $ 196,000 |
Private Equity Hedge Fund At Cost [Member] | ||
Other investments, net | 57,000 | 137,000 |
Other Investments [Member] | ||
Other investments, net | $ 30,000 | $ 59,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | ||
Other non-marketable investments | $ 29,000 | $ 35,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Investment in marketable securities | $ 565,000 | $ 1,425,000 |
Basic Materials [Member] | Fair Value Inputs Level 1 [Member] | Fair Value Measurements Recurring [Member] | ||
Investment in marketable securities | 377,000 | 351,000 |
REITs and Real Estate Companies [Member] | Fair Value Inputs Level 1 [Member] | Fair Value Measurements Recurring [Member] | ||
Investment in marketable securities | 162,000 | 451,000 |
Energy [Member] | Fair Value Inputs Level 1 [Member] | Fair Value Measurements Recurring [Member] | ||
Investment in marketable securities | $ 26,000 | |
Consumer Cyclical [Member] | Fair Value Inputs Level 1 [Member] | Fair Value Measurements Recurring [Member] | ||
Investment in marketable securities | 318,000 | |
Other [Member] | Fair Value Inputs Level 1 [Member] | Fair Value Measurements Recurring [Member] | ||
Investment in marketable securities | $ 305,000 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value, Assets Measured on Nonrecurring Basis (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Other non-marketable investments | $ 87,000 | $ 196,000 |
Net loss for the period | (80,000) | (36,000) |
Fair Value Inputs Level 3 [Member] | ||
Other non-marketable investments | $ 87,000 | $ 196,000 |
Other Assets, Net - Schedule of
Other Assets, Net - Schedule of Other Assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventory - Hotel | $ 37,000 | $ 61,000 |
Prepaid expenses | 511,000 | 554,000 |
Miscellaneous assets, net | 283,000 | 271,000 |
Total other assets | $ 831,000 | $ 886,000 |
Related Party and Other Finan_3
Related Party and Other Financing Transactions (Details Narrative) - USD ($) | Apr. 30, 2020 | Apr. 09, 2020 | Feb. 01, 2017 | Jul. 02, 2014 | Jun. 30, 2020 | Jun. 30, 2019 |
Debt instrument, payment terms | P10Y | |||||
Key money incentive advance to related party | $ 2,000,000 | $ 2,000,000 | ||||
Debt amortization period | 8 years | |||||
Accrued interest | $ 1,009,000 | 2,049,000 | ||||
Proceeds from loan | $ 6,814,000 | |||||
Qualified expenses | 3,568,000 | |||||
Future qualified expenses | 1,151,000 | |||||
Financial lease obligations | 1,098,000 | |||||
Accounts payable to related party | $ 2,385,000 | $ 2,122,000 | ||||
CARES Act [Member] | CIBC Bank USA [Member] | ||||||
Debt instrument, interest rate, stated percentage | 1.00% | |||||
Debt instrument, maturity date | Apr. 9, 2022 | |||||
Proceeds from loan | $ 4,719,000 | |||||
Interest Free Development Incentive Note [Member] | ||||||
Debt instrument, payment terms | through 2030 | |||||
Notes reduction | $ 316,000 | |||||
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 | The loan was extended to July 1, 2021. | |||||
Percentage of loan fee received | 3.00% | |||||
Debt instrument, maturity date | Jul. 1, 2021 | |||||
Capital Lease Obligations [Member] | Minimum [Member] | ||||||
Debt instrument, interest rate, stated percentage | 4.62% | |||||
Capital Lease Obligations [Member] | Maximum [Member] | ||||||
Debt instrument, interest rate, stated percentage | 6.25% |
Related Party and Other Finan_4
Related Party and Other Financing Transactions - Schedule of Related Party and Other Notes Payable (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Total related party and other notes payable | $ 7,604,000 | $ 8,221,000 |
Note payable - InterGroup [Member] | ||
Total related party and other notes payable | 3,000,000 | 3,000,000 |
Note payable - Hilton [Member] | ||
Total related party and other notes payable | 3,008,000 | 3,325,000 |
Note payable - Interstate [Member] | ||
Total related party and other notes payable | 1,646,000 | 1,896,000 |
SBA Loan - Justice [Member] | ||
Total related party and other notes payable | $ 4,719,000 |
Related Party and Other Finan_5
Related Party and Other Financing Transactions - Schedule of Minimum Future Lease Payments for Assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party And Other Financing Transactions - Schedule Of Minimum Future Lease Payments For Assets | ||
2021 | $ 503,000 | |
2022 | 492,000 | |
2023 | 188,000 | |
Total minimum lease payments | 1,183,000 | |
Less interest on finance lease | (85,000) | |
Present value of future minimum lease payments | $ 1,098,000 | $ 1,486,000 |
Related Party and Other Finan_6
Related Party and Other Financing Transactions - Schedule of Future Minimum Principle Payments (Details) - Related Party and Other Financing Transactions [Member] | Jun. 30, 2020USD ($) |
2021 | $ 1,016,000 |
2022 | 8,752,000 |
2023 | 750,000 |
2024 | 567,000 |
2025 | 567,000 |
Thereafter | 1,819,000 |
Long-term Debt | $ 13,471,000 |
Mortgage Notes Payable (Details
Mortgage Notes Payable (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2019USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020 | Jun. 30, 2020USD ($) | May 12, 2017USD ($) | |
Mortgage Notes Payable [Line Items] | |||||
Mortgage loan on real estate final maturity period | 10 years | ||||
Investment in mortgage loans | $ 97,000,000 | $ 97,000,000 | |||
Investment in mortgage loans on real estate, interest rate | 5.275% | ||||
Debt service coverage ratio | 1 | 1.10 | 1 | ||
Mezzanine Loan [Member] | |||||
Mortgage Notes Payable [Line Items] | |||||
Investment in mortgage loans | $ 20,000,000 | $ 20,000,000 | |||
Investment in mortgage loans on real estate, interest rate | 9.75% | ||||
Investment in mortgage loans on real estate, final maturity date | Jan. 1, 2024 | ||||
Guarantor obligations, current carrying value | $ 20,000,000 | ||||
Mortgage Loans [Member] | |||||
Mortgage Notes Payable [Line Items] | |||||
Guarantor obligations, current carrying value | $ 97,000,000 | ||||
New Mezzanine Loan [Member] | |||||
Mortgage Notes Payable [Line Items] | |||||
Investment in mortgage loans | $ 20,000,000 | ||||
Investment in mortgage loans on real estate, interest rate | 7.25% | ||||
Investment in mortgage loans on real estate, final maturity date | Jan. 1, 2024 |
Mortgage Notes Payable - Schedu
Mortgage Notes Payable - Schedule of Mortgages (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Aug. 01, 2019 | Jun. 30, 2019 | |
Mortgage Notes Payable [Line Items] | |||
Mortgage notes payable - hotel | $ 112,292,000 | $ 113,746,000 | |
Net debt issuance costs | (896,000) | (659,000) | |
Total mortgage notes payable - hotel | 111,446,000 | 113,087,000 | |
Fixed Mortgage Notes Payable Hotel 5.28% [Member] | |||
Mortgage Notes Payable [Line Items] | |||
Mortgage notes payable hotel | $ 92,292,000 | 93,746,000 | |
Debt instrument, interest rate, stated percentage | 5.28% | ||
Debt instrument, maturity date range, start | Dec. 18, 2013 | ||
Debt instrument, maturity date range, end | Jan. 1, 2024 | ||
Fixed Mortgage Notes Payable Hotel 9.75% [Member] | |||
Mortgage Notes Payable [Line Items] | |||
Mortgage notes payable hotel | $ 20,000,000 | $ 20,000,000 | |
Debt instrument, interest rate, stated percentage | 9.75% | ||
Debt instrument, maturity date range, start | Dec. 18, 2013 | ||
Debt instrument, maturity date range, end | Jan. 1, 2024 | ||
Fixed Mortgage Notes Payable Hotel 7.25% [Member] | |||
Mortgage Notes Payable [Line Items] | |||
Debt instrument, interest rate, stated percentage | 7.25% |
Mortgage Notes Payable - Sche_2
Mortgage Notes Payable - Schedule of Future Minimum Principle Payments (Details) - Mortgage Notes Payable [Member] | Jun. 30, 2020USD ($) |
Mortgage Notes Payable [Line Items] | |
2021 | $ 1,547,000 |
2022 | 1,632,000 |
2023 | 1,721,000 |
2024 | 107,392,000 |
Long-term Debt | $ 112,292,000 |
Management Agreements (Details
Management Agreements (Details Narrative) - USD ($) | Feb. 01, 2017 | Feb. 01, 2017 | Jun. 30, 2020 | Jun. 30, 2019 |
Management Agreement [Line Items] | ||||
Related party transaction agreement term | 10 years | 10 years | ||
Key money incentive advance to related party | $ 2,000,000 | $ 2,000,000 | ||
Accrued interest | $ 1,009,000 | 2,049,000 | ||
Unamortized portion of key money payment | 1,646,000 | 1,896,000 | ||
Management fees | 341,000 | $ 1,206,000 | ||
Accounts Receivable [Member] | ||||
Management Agreement [Line Items] | ||||
Key money incentive advance to related party | $ 2,000,000 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Concentration Risk [Line Items] | ||
Accounts receivable, net | $ 251,000 | $ 848,000 |
Two Customer [Member] | Hotel [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 95.00% | |
Accounts receivable, net | $ 239,000 | |
One Customer [Member] | Hotel [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 32.00% | |
Accounts receivable, net | $ 272,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards | $ 20,705,000 |
Deferred tax assets, operating loss carryforwards, state and local | $ 21,379,000 |
Income tax expiration description | Expire in varying amount through 2038. |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Tax Benefit (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal, Current tax benefit | $ 15,000 | $ 165,000 |
Federal, Deferred tax benefit (expense) | 1,349,000 | (817,000) |
Federal Income Tax Benefit | 1,364,000 | (652,000) |
State, Current tax expense | (1,000) | (16,000) |
State, Deferred tax benefit (expense) | 571,000 | (288,000) |
State and Local Income Tax Benefit | 570,000 | (304,000) |
Total income tax benefit | $ 1,934,000 | $ (956,000) |
Income Taxes - Schedule of Stat
Income Taxes - Schedule of Statutory Federal Income Tax Rate (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax rate | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | 9.20% | 6.80% |
Disallowed interest | 10.30% | 0.00% |
Other | (1.00%) | (0.80%) |
Effective income tax rate reconciliation, percent | 39.60% | 27.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 6,238,000 | $ 4,419,000 |
Investment reserve | 674,000 | 756,000 |
Interest expense | 1,466,000 | |
Other | 1,755,000 | 1,937,000 |
Deferred Tax Assets | 10,133,000 | 7,112,000 |
Basis difference in Justice | (3,295,000) | (2,290,000) |
State taxes | (368,000) | (245,000) |
Valuation allowance | (496,000) | (523,000) |
Deferred tax liabilities | (4,159,000) | (3,058,000) |
Net deferred tax assets | $ 5,974,000 | $ 4,054,000 |
Segment Information (Details Na
Segment Information (Details Narrative) | 12 Months Ended |
Jun. 30, 2020Integer | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | $ 42,839,000 | $ 59,881,000 |
Segment operating expenses | (38,080,000) | (45,232,000) |
Segment income (loss) | 2,567,000 | 12,340,000 |
Interest expense - mortgage | (6,965,000) | (7,273,000) |
Loss on disposal of assets | (398,000) | |
Depreciation and amortization expense | (2,192,000) | (2,309,000) |
Loss from investments | (398,000) | (438,000) |
Income tax benefit | 1,934,000 | (956,000) |
Net income (loss) | (3,223,000) | 2,914,000 |
Total assets | 57,554,000 | 62,554,000 |
Hotel Operations [Member] | ||
Revenues | 42,839,000 | 59,881,000 |
Segment operating expenses | (37,333,000) | (44,466,000) |
Segment income (loss) | 5,506,000 | 15,415,000 |
Interest expense - mortgage | (7,326,000) | (7,634,000) |
Loss on disposal of assets | (398,000) | |
Depreciation and amortization expense | (2,192,000) | (2,309,000) |
Loss from investments | ||
Income tax benefit | ||
Net income (loss) | (4,012,000) | 5,074,000 |
Total assets | 49,716,000 | 55,664,000 |
Investment Transactions [Member] | ||
Revenues | ||
Segment operating expenses | ||
Segment income (loss) | ||
Interest expense - mortgage | ||
Loss on disposal of assets | ||
Depreciation and amortization expense | ||
Loss from investments | (398,000) | (438,000) |
Income tax benefit | ||
Net income (loss) | (398,000) | (438,000) |
Total assets | 652,000 | 1,621,000 |
Other [Member] | ||
Revenues | ||
Segment operating expenses | (747,000) | (766,000) |
Segment income (loss) | (747,000) | (767,000) |
Interest expense - mortgage | ||
Loss on disposal of assets | ||
Depreciation and amortization expense | ||
Loss from investments | ||
Income tax benefit | 1,934,000 | (956,000) |
Net income (loss) | 1,187,000 | (1,722,000) |
Total assets | $ 7,186,000 | $ 5,269,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 02, 2014 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Unsecured loan | $ 3,000,000 | $ 3,000,000 | ||
InterGroup Corp [Member] | ||||
Principal amount | $ 4,250,000 | |||
Loans maturity date | Jul. 1, 2021 | |||
Justice Operating Company, LLC [Member] | ||||
Repayment of related party debt | $ 1,550,000 | |||
Fees payable | $ 200,000 | |||
Santa Fe and InterGroup [Member] | ||||
Expenses | $ 72,000 | $ 72,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Service fees | $ 3,000,000 | $ 4,100,000 |
Franchise License Agreement [Member] | ||
License agreement period | 15 years |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Aug. 19, 2020USD ($) |
Subsequent Event [Member] | Property Improvement Plan [Member] | |
Deposits | $ 2,379,000 |