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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

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

 For
the fiscal year ended June 30, 2025

 or

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

 For
the transition period from _______ to_________

 Commission
File Number 0-4057

 (Exact
name of registrant as specified in its charter)

 california

 94-1674111

 (State
 or other jurisdiction of

 (I.R.S.
 Employer

 Incorporation
 or organization)

 Identification
 No.)

 1516
S. Bundy Drive, Suite 200, Los Angeles, California 90025

 (Address
of principal executive offices) (Zip Code)

 (310) 889-2500

 (Registrant's
telephone number, including area code)

registered pursuant to Section 12(b) of the Act: None

registered pursuant to Section 12(g) of the Act:

 Common
Stock, No Par Value

 (Title
of class)

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

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

by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendments to this Form 10-K.

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller
reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 Accelerated Filer

 Accelerated
 Filer

 Non-Accelerated
 Filer

 Smaller
 reporting company

 Emerging
 growth company

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

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

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 The
aggregate market value of the Common Stock, no par value, held by non-affiliates computed by reference to the closing price reported
on the last day of registrant's second quarter December 31, 2024 was $ 278,000.

 The
number of shares outstanding of registrant's Common Stock, as of September 29, 2025 was 734,187.

registered pursuant to section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 None

 None

 None

 DOCUMENTS
INCORPORATED BY REFERENCE: None

 TABLE
OF CONTENTS

 Page

 PART
 I

 Item
 1.

 Business.

 Item
 1A.

 Risk
 Factors.

 Item
 1B.

 Unresolved
 Staff Comments.

 Item
 1C.

 Cybersecurity.

 Item
 2.

 Properties.

 Item
 3.

 Legal
 Proceedings.

 Item
 4.

 Mine
 Safety Disclosures.

 PART
 II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Item
 6.

 Reserved.

 Item
 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations.

 Item
 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk.

 Item
 8.

 Financial
 Statements and Supplementary Data.

 Item
 9.

 Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure.

 Item
 9A.

 Controls
 and Procedures.

 Item
 9B.

 Other
 Information.

 Item
 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspections.

 PART
 III

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance.

 Item
 11.

 Executive
 Compensation.

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 Item
 13.

 Certain
 Relationships and Related Transactions, and Director Independence.

 Item
 14.

 Accounting Fees and Services.

 PART
 IV

 Item
 15.

 Exhibits,
 Financial Statement Schedules.

 Signatures

 FORWARD-LOOKING
STATEMENTS

 This
Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended
("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Forward-looking
statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial
results, our liquidity and capital resources, including anticipated repayment of certain of the Company's indebtedness, our expected
future business and financial condition, the effects of competition, potential changes in laws regulations, or government policy applicable
to our operations, and other non-historical statements, the impact from macroeconomic factors (including inflation, increases in interest
rates, slowing economic growth or potential recessionary conditions, and geopolitical conflicts). Forward-looking statements include
all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as
the words "outlook," "believes," "expects," "potential," "continues," "may,"
"will," "should," "could," "seeks," "projects," "predicts," "intends,"
"plans," "estimates," "anticipates" or the negative version of these words or other comparable words.
You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which
are, in some cases, beyond our control and which could materially affect our results of operations, financial condition, cash flows,
performance or future achievements or events.

 All
such forward-looking statements are based on current expectations of management and therefore involve estimates and assumptions that
are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, forecasted,
or implied in these statements. You should not place undue reliance on any forward-looking statements, and we urge investors to carefully
review the disclosures we make concerning risks and uncertainties in Item 1A: "Risk Factors" in this Annual Report on Form
10-K. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.

 The
risk factors discussed in Item 1A: "Risk Factors" could cause our results to differ materially from those expressed in forward-looking
statements. Additional risks and uncertainties, including those not currently known to us or that we presently consider immaterial, may
also cause actual results to differ materially from those expressed or implied in forward-looking statements.

 Other
factors that may cause actual results to differ materially from current expectations include, but are not limited to:

 risks
 associated with the lodging industry, including competition, increases in wages, labor relations, energy and fuel costs, pandemics
 or public health crises (whether actual or perceived), acts of terrorism and downturns in domestic and international economic and
 market conditions, particularly in the San Francisco Bay area;

 risks
 associated with the real estate industry, including changes in real estate and zoning laws or regulations, increases in real property
 taxes, rising insurance premiums, and increased costs or liabilities related to environmental, health, and safety laws, climate change
 regulations, and other governmental requirements;

 the
 availability and terms of financing and capital and the general volatility of securities markets;

 increases
 in interest rates, or sustained periods of higher interest rate environments;

 changes
 in the competitive environment in the hotel industry;

 economic
 volatility and significant or prolonged economic slowdowns;

 risks
 related to natural disasters, extreme weather events, or other climate-related impacts;

 inflationary
 or hyperinflationary pressures;

 Litigation,
 regulatory proceedings, or governmental investigations; and

 other
 risk factors discussed below in this Report.

 Many
of the risk factors described above should be read in conjunction with the cautionary statement regarding forward-looking statements
contained in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations and in the 'Forward-looking
Statements' section of this Annual Report on Form 10-K.

 PART
I

 Item
1. Business.

 GENERAL

Square, Inc. (referred to as "Portsmouth" or the "Company" and may also be referred to as "we" "us"
or "our") is a California corporation, incorporated on July 6, 1967, originally formed to acquire a hotel property in San
Francisco, California through a California limited partnership, Justice Investors Limited Partnership ("Justice" or the "Partnership").
As of June 30, 2025, approximately 75.9% of the outstanding common stock of Portsmouth was owned by The InterGroup Corporation ("InterGroup"),
a public company (NASDAQ: INTG). As of June 30, 2025, the Company's Chairman of the Board and Chief Executive Officer, John V.
Winfield, owns approximately 2.5% of the outstanding common shares of the Company. Mr. Winfield also serves as the President, Chairman
of the Board and Chief Executive Officer of InterGroup and owns approximately 70.1% of the outstanding common shares of InterGroup as
of June 30, 2025. The concentration of ownership by InterGroup and certain officers and directors may result in significant influence
over Company decisions, as discussed in Item 1A – Risk Factors.

 Portsmouth's
primary business has historically been conducted through its general and limited partnership interest in Justice Investors Limited Partnership,
a California limited partnership ("Justice" or the "Partnership"). Effective July 15, 2021, Portsmouth completed
the purchase of 100% of the limited partnership interest of Justice through the acquisition of the remaining 0.7% non-controlling interest.
Effective December 23, 2021, the Partnership was dissolved. The financial statements of Justice were consolidated with those of the Company.

 Prior
to its dissolution effective December 23, 2021, Justice owned and operated 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 through its subsidiaries Justice Operating Company, LLC ("Operating") and Justice
Mezzanine Company, LLC ("Mezzanine"). Mezzanine was a wholly owned subsidiary of the Partnership; Operating is a wholly owned
subsidiary of Mezzanine. Effective December 23, 2021, Portsmouth replaced Justice as the single member 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 a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC ("Hilton")
through January 31, 2030. The franchise agreement requires the hotel to meet certain brand standards and capital improvement requirements,
noncompliance with which could have an adverse impact on operations, as discussed in Item 1A – Risk Factors.

 In
connection with the refinancing of the Hotel on March 28, 2025, the Company formed Justice Pledgor, LLC, a Delaware limited liability
company ("Pledgor"), which became the sole member of Operating. Mezzanine is the sole member of Pledgor. The refinancing
transaction resulted in an increase in our leverage of approximately $1 million and subjects us to additional covenants and payment obligations,
which are described in Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations.

 HILTON
HOTELS FRANCHISE LICENSE AGREEMENT

 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 fifteen years commencing
on the date the Hotel began operating as a Hilton hotel, with an option to extend it for another five years, subject to certain conditions.
On June 26, 2015, Operating and Hilton entered into an amended franchise agreement that, among other things, extended the License Agreement
through 2030, and provided Justice with certain key money cash incentives to be earned through 2030. The License Agreement requires the
hotel to maintain specific brand standards and periodic renovations, noncompliance with which could result in penalties, termination
of the agreement, or loss of the Hilton brand, as discussed in Item 1A – Risk Factors.

 HOTEL
MANAGEMENT COMPANY AGREEMENT

entered into a hotel management agreement ("HMA") with Aimbridge Hospitality ("Aimbridge") to manage the Hotel,
along with its five-level parking garage, with an effective date of February 3, 2017. The term of the management agreement is for an
initial period of ten years commencing February 3, 2017 and automatically renews for successive one (1) year periods, not to exceed five
years in the aggregate, subject to certain conditions. Under the terms on the HMA, base management fee ("Basic Fee") payable
to Aimbridge shall be one and seven-tenths percent (1.70%) of total Hotel revenue. In addition to the Basic Fee, Aimbridge shall be entitled
to an annual incentive fee for each fiscal year equal to ten percent (10%) of the amount by which Gross Operating Profit in the current
fiscal year exceeds the previous fiscal year's Gross Operating Profit.

 For
the fiscal years ended June 30, 2025 and 2024, hotel management fees were $783,000 and $706,000, and incentive fees of $0, respectively,
offset by key money amortization of $250,000 for both years and are included in Hotel operating expenses in the consolidated statements
of operations. However, following discussions with Aimbridge regarding the impact of the COVID-19 pandemic on incentive fee eligibility,
the parties agreed that no incentive fees were payable for fiscal years 2019 through 2023. Specifically, Aimbridge agreed to waive $1,030,134
in previously recorded incentive fees, and both parties established a performance threshold for future incentive fee eligibility of $15,257,301
in earnings before interest, taxes, depreciation, and amortization ("EBITDA") which was the EBITDA in 2017 when Aimbridge
began managing the Hotel. As a result, the Company recorded a reduction in Hotel operating expenses of $1,030,134 for the year ended
June 30, 2025. The loss or replacement of the hotel management company, or a failure by Aimbridge to meet performance benchmarks, could
have a material adverse impact on hotel operations, as discussed in Item 1A – Risk Factors.

 CHINESE
CULTURE FOUNDATION LEASE

 In
November 1967, Justice entered into a 50-year nominal rent lease (the "Lease") with the Chinese Culture Foundation of San
Francisco (the "Foundation") for the third-floor space of the Hotel commonly known as the Chinese Culture Center, which the
Foundation had the right to occupy pursuant to the Lease. Among other requirements, the Lease was a condition imposed by the City of
San Francisco upon Justice, to convey the real estate where the Hotel would be built.

 On
March 15, 2005, the Hotel and the Foundation entered an amended lease. The amended lease, among other things, requires the Hotel to pay
to the Foundation a monthly event space fee in the amount of $5,000, adjusted annually based on the local Consumer Price Index. As of
June 30, 2025, the monthly event space fee was $7,000. The term of the amended lease expired on October 17, 2023, with an automatic extension
for another 10-year term if the property continues to be operated as a hotel. Subject to certain conditions as set forth in the amended
lease, the Foundation is entitled to reserve for a maximum of 75 days per calendar year for use of the event space. If the Hotel needs
the event space during one of the dates previously reserved by the Foundation, the Hotel shall pay the Foundation $4,000 per day for
using the event space. During the fiscal years ended June 30, 2025 and 2024, the Hotel paid the Foundation $15,000 and $8,000 for such
fees, respectively. The terms of this lease, including the reserved use provisions, could limit flexibility for certain hotel functions
or events.

 MARKETABLE
SECURITIES INVESTMENT POLICIES

 In
addition to its Hotel operations, the Company also invests from time to time in income producing instruments, corporate debt and equity
securities, publicly traded investment funds, mortgage-backed securities, securities issued by REITs and other companies which invest
primarily in real estate.

 The
Company's securities investments are made under the supervision of an Executive Strategic Real Estate and Securities Investment
Committee of the Board of Directors (the "Committee"). The Committee currently has three members and is chaired by the Company's
Chairman of the Board and Chief Executive Officer, John V. Winfield. The Committee has delegated authority to manage the portfolio to
the Company's Chairman and Chief Executive Officer together with such assistants and management committees he may engage. The Committee
generally follows certain established investment guidelines for the Company's investments. These guidelines presently include:
(i) corporate equity securities should be listed on the New York Stock Exchange (NYSE), NYSE MKT, NYSE Arca or the Nasdaq Stock Market
(NASDAQ); (ii) the issuer of the listed securities should be in compliance with the listing standards of the applicable national securities
exchange; and (iii) investment in a particular issuer should not exceed 10% of the market value of the total portfolio. The investment
guidelines do not require the Company to divest itself of investments, which initially meet these guidelines but subsequently fail to
meet one or more of the investment criteria. The Committee has in the past approved non-conforming investments and may in the future
approve non-conforming investments. The Committee may modify these guidelines from time to time. Changes in market conditions, interest
rates, or liquidity could negatively impact the value or performance of these investments, as discussed in Item 1A – Risk Factors.

 The
Company may also invest, with the approval of the Committee, in unlisted securities, such as convertible notes, through private placements
including private equity investment funds. Those investments in non-marketable securities are carried at cost on the Company's
consolidated balance sheets as part of other investments and reviewed for impairment on a periodic basis.

 The
Company may utilize margin for its marketable securities purchases using standard margin agreements with national brokerage firms. The
margin used by the Company may fluctuate depending on market conditions. The use of leverage could be viewed as risky, and the market
value of the portfolio may be subject to large fluctuations. Margin balances due on June 30, 2025 and 2024 were $0. The use of margin
or other forms of leverage increases exposure to market volatility and could magnify losses.

 As
Chairman of the Committee and of the Company, 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
the Board of InterGroup and oversees the investment activity of InterGroup. Depending on certain market conditions and various risk factors,
the Chief Executive Officer 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 InterGroup, at risk in substantially the same manner as the Company in connection with investment
decisions made on behalf of the Company. Transactions or investments involving related parties are subject to the Company's related-party
transaction policies and applicable Securities and Exchange Commission disclosure requirements.

 Further
information with respect to investment in marketable securities and other investments of the Company is set forth in Management Discussion
and Analysis of Financial Condition and Results of Operations section and Notes 5 and 6 of the Notes to Consolidated Financial Statements.

 SEASONALITY

 Historically,
the Hotel's operation has been seasonal under normal circumstances. Like most hotels in the San Francisco area, the Hotel generally
maintained high occupancy and room rates during the entire year except for the weeks starting from Thanksgiving to first week of January
due to the holiday season. These seasonal patterns can be expected to cause fluctuations in the quarterly revenues of the Hotel. See
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for more information regarding the
effects on our results of operations. Climate variability or extreme weather events could alter historical seasonal trends and impact
occupancy and room rates, as discussed in Item 1A – Risk Factors.

 COMPETITION

 Our
Hotel has successfully completed its full guest-rooms renovation over the last 2 years along with public space, fitness center, corridors,
and meeting space. The renovations position the hotel to continue to drive rate and grow RevPAR over the market and its CompSet. The
hotel recently received its annual Quality Assurance inspection from Hilton and received the highest score at least in the hotel's
last decade at 96.7% which is an "Outstanding" ranking by Hilton.

the fiscal year ending June 30, 2025, the Hotel's CompSet achieved a RevPAR of $172.84 while the Hotel had a RevPAR of $214.66.
Since the completion of the renovation in June 2024, the Hotel has increased its lead in RevPAR on the CompSet dramatically, growing
RevPAR 23% while the comp set lost 8.3% over the same time.

 The
Hotel's location in the San Francisco Financial District historically has provided greater opportunities over its competitors when
it comes to developing relationships with the Financial District entities and the customers who regularly do business in the downtown
area. With business travel slowly returning to San Francisco post-pandemic, we are competing with hotels in more tourist attracting locations
and amenities for the leisure traveler. The ability to capitalize on the strong midweek demand of the individual business traveler to
the Financial District has been the focus during this period of strong growth in the market. The city is seeing the return of a stronger
convention calendar along with business travel trending positively.

 The
Hotel is also subject to certain operating risks common to the hospitality industry, which could adversely impact performance, including
those set forth in Item 1A- Risk Factors.

 These
risks include, but are not limited to:

 Competition
 for guests and meetings from other hotels including competition and pricing pressure from internet wholesalers and distributors;

 increases
 in operating costs, including wages, benefits, insurance, property taxes and energy, due to inflation and other factors, which may
 not be offset in the future by increased room rates;

 labor
 strikes, disruptions or lockouts;

 dependence
 on demand from business and leisure travelers, which may fluctuate and is seasonal;

 increases
 in energy costs, cost of fuel, airline fares and other expenses related to travel, which may negatively affect traveling;

 terrorism,
 terrorism alerts and warnings, wars and other military actions, pandemics or other medical events or warnings which may result in
 decreases in business and leisure travel;

 natural
 disasters; and

 adverse
 effects of downturns and recessionary conditions in international, national and/or local economies and market conditions. Other factors
 such as cybersecurity incidents impacting travel infrastructure, extreme weather events linked to climate changes, or public health
 crisis could also disrupt travel patterns and negatively affect hotel performance, as discussed in Item 1A- Risk Factors.

 ENVIRONMENTAL
MATTERS

 In
connection with the ownership of the Hotel, the Company is subject to various federal, state and local laws, ordinances and regulations
relating to environmental protection. Under these laws, the current or previous owner or operator of real estate may be liable for the
costs of removal or remediation of certain hazardous or toxic substances on, under or in such property. Such laws often impose liability
without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic substances.

 Environmental
consultants retained by Justice and its lenders conducted updated Phase I environmental site assessments in fiscal year ended June 30,
2014 on the Hotel property. These Phase I assessments relied, in part, on Phase I environmental assessments prepared in connection with
the Partnership's first mortgage loan obtained in December 2013. Phase I assessments are designed to evaluate the potential for
environmental contamination on properties based generally upon site inspections, facility personnel interviews, historical information,
and certain publicly available databases; however, Phase I assessments will not necessarily reveal the existence or extent of all environmental
conditions, liabilities or compliance concerns at the properties.

 Although
the Phase I assessments and other environmental reports we have reviewed disclose certain conditions on our property and the use of hazardous
substances in operation and maintenance activities that could pose a risk of environmental contamination or liability, we are not aware
of any environmental liability that we believe would have a material adverse effect on our business, financial position, results of operations
or cash flows. Future changes in environmental laws, or the discovery of previously unknown contamination, could result in significant
costs or liabilities.

 The
Company believes that the Hotel is in compliance, in all material respects, with all federal, state, and local environmental ordinances
and regulations regarding hazardous or toxic substances and other environmental matters, the violation of which could have a material
adverse effect on the Company. The Company has not received written notice from any governmental authority of any material noncompliance,
liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of its present properties.

 EMPLOYEES

 As
of June 30, 2025, Portsmouth had four full-time employees. The employees of the Company are not part of any collective bargaining agreement,
and the Company believes that its employee relations are satisfactory.

 The
hotel operations had 187 employees as of June 30, 2025. On February 3, 2017, Aimbridge assumed all labor union agreements as agent for
Hotel and Justice, and Justice provides all funding for all payroll and related costs. As of June 30, 2025, approximately 90% 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 Aimbridge was a party as agent for Hotel and Justice. CBA for Local 2 (Hotel and Restaurant
Employees) will expire on August 13, 2028. CBA for Local 856 (International Brotherhood of Teamsters) will expire on December 31, 2028.
CBA for Local 39 (Stationary Engineers) will expire in July 2030.

 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 Company and Aimbridge. The Company expects and anticipates that the terms
and 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. Changes in labor laws, union negotiations,
or work stoppages could materially impact hotel operations and cost structures, as discussed in Item 1A – Risk Factors.

 ADDITIONAL
INFORMATION

 The
Company files required annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K and other information with the
Securities and Exchange Commission ("SEC" or the "Commission").. The SEC no longer operates a public reference
room. The Commission also maintains an Internet site at  that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the Commission.

 Other
information about the Company can be found on our parent company's website www.intgla.com. Reference in this document to that website
address does not constitute incorporation by reference of the information contained on the website. We make our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports available free of charge on our website
as soon as reasonably practicable after such materials are filed with or furnished to the SEC.

 Item
1A. Risk Factors.

 Adverse
changes in the U.S. and global economies could negatively impact our financial performance.

 Due
to a number of factors affecting consumers, the outlook for the lodging industry remains uncertain. These factors have resulted at times
in the past and could continue to result in the future in fewer customers visiting, or customers spending less, in San Francisco, as
compared to prior periods. The current macroeconomic environment, including risks of a U.S. or global recession, has resulted in many
businesses reducing or eliminating typical travel and group meetings as a conservative measure in times of financial uncertainty. Leisure
travel and other leisure activities represent discretionary expenditures, and participation in such activities tends to decline during
economic downturns, during which consumers generally have less disposable income. As a result, customer demand for the luxury amenities
and leisure activities that we offer may decline during such periods. Furthermore, during periods of economic contraction, revenues may
decrease while some of our costs remain fixed or even increase, resulting in decreased earnings.

 Weakened
global economic conditions may adversely affect our industry, business and results of operations.

 Our
overall performance depends in part on worldwide economic conditions which could adversely affect the tourism industry. According to
current economic news reports, the United States and other key international economies may enter into a recession or experience prolonged
periods of slow growth, characterized by falling demand for a variety of goods and services, restricted credit, going-concern threats
to financial institutions, major multinational companies and medium and small businesses, poor liquidity, declining asset values, reduced
corporate profitability, and volatility in credit, equity and foreign exchange markets. These conditions affect discretionary and leisure
spending and could adversely affect our customers' ability or willingness to travel to destinations for leisure and cut back on
discretionary business travel, which could adversely affect our operating results. In addition, in a weakened economy, companies that
have competing properties may reduce room rates and other prices, which could also reduce our average revenues and harm our operating
results.

 We
operate a single property located in San Francisco and rely on the San Francisco market. Changes adversely impacting this market could
have a material effect on our business, financial condition, results of operation, and fair market value of the Hotel.

 Our
business in San Francisco and the hospitality industry has a limited base of operations and substantially all of our revenues are currently
generated by the Hotel in San Francisco, California. Accordingly, we are subject to greater risks than a more diversified hotel or resort
operator and the profitability of our operations is linked to local economic conditions in San Francisco. The combination of a decline
in the local economy of San Francisco, reliance on a single location and the significant investment associated with it may cause our
operating results to fluctuate significantly and may adversely affect us and materially affect our total profitability. In addition,
because our operations are concentrated in a single urban location, we are more vulnerable to localized adverse events, including natural
disasters, climate-related impacts, public health crises, and other events that could disrupt travel or hotel operations in the San Francisco
area.

 We
face intense local and increasingly national competition which could impact our operations and adversely affect our business and results
of operations.

 We
operate in the highly competitive San Francisco hotel industry. The Hotel competes with other high-quality Northern California hotels
and resorts. Many of these competitors seek to attract customers to their properties by providing food and beverage outlets, retail stores
and other related amenities, in addition to hotel accommodations. To the extent that we seek to enhance our revenue base by offering
our own various amenities, we compete with the service offerings provided by these competitors.

 Many
of the competing properties have themes and attractions which draw a significant number of visitors and directly compete with our operations.
Some of these properties are operated by subsidiaries or divisions of large public companies that may have greater name recognition and
financial and marketing resources than we do and market to the same target demographic group as we do. Various competitors are expanding
and renovating their existing facilities. We believe that competition in the San Francisco hotel and resort industry is based on certain
property-specific factors, including overall atmosphere, range of amenities, price, location, technology infrastructure, entertainment
attractions, theme and size. Any market perception that we do not excel with respect to such property-specific factors could adversely
affect our ability to compete effectively. If we fail to respond effectively to changes in market conditions, customer preferences, or
competitor strategies – including pricing actions, loyalty programs, and digital marketing initiatives –we could lose market
share, which could adversely affect our business, revenues, and results of operations.

 The
San Francisco hotel and resort industry are capital intensive; financing our renovations and future capital improvements could reduce
our cash flow and adversely affect our financial performance.

 The
Hotel has an ongoing need for renovations and other capital improvements to remain competitive, including replacement, from time to time,
of furniture, fixtures and equipment. We will also need to make capital expenditures to comply with applicable laws and regulations.

 Renovations
and other capital improvements of hotels require significant capital expenditures. In addition, renovations and capital improvements
of hotels usually generate little or no cash flow until the project's completion. We may not be able to fund such projects solely
from cash provided from our operating activities. Consequently, we will rely upon the availability of debt or equity capital and reserve
funds to fund renovations and capital improvements and our ability to carry them out will be limited if we cannot obtain satisfactory
debt or equity financing, which will depend on, among other things, market conditions. No assurances can be made that we will be able
to obtain additional equity or debt financing or that we will be able to obtain such financing on favorable terms.

 Renovations
and other capital improvements may give rise to the following additional risks, among others: construction cost overruns and delays;
increased prices of materials due to tariffs; temporary closures of all or a portion of the Hotel to customers; disruption in service
and room availability causing reduced demand, occupancy and rates; and possible environmental issues. In addition, labor shortages, supply
chain disruptions, inflationary pressures on materials and services, and increased regulatory requirements related to environmental sustainability
or climate-resilient construction could further escalate costs or extend project timelines.

 As
a result, renovations and any other future capital improvement projects may increase our expenses, reduce our cash flows and our revenues.
If capital expenditures exceed our expectations, this excess would have an adverse effect on our available cash. Significant delays or
cost overruns could also impact our ability to maintain competitive standards and customer satisfaction, potentially reducing revenues.

 We
have substantial debt, and we may incur additional indebtedness, which may negatively affect our business and financial results.

 We
have substantial debt service obligations. Our substantial debt may negatively affect our business and operations in several ways, including:
requiring us to use a substantial portion of our funds from operations to make required payments on principal and interest, which will
reduce funds available for operations and capital expenditures, future business opportunities and other purposes; making us more vulnerable
to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; limiting
our flexibility in planning for, or reacting to, changes in the business and the industry in which we operate; placing us at a competitive
disadvantage compared to our competitors that have less debt; limiting our ability to borrow more money for operations, capital or to
finance acquisitions in the future; and requiring us to dispose of assets, if needed, in order to make required payments of interest
and principal. In addition, increases in interest rates, changes in credit market conditions, or a downgrade of our creditworthiness
could increase our borrowing costs or limit our access to additional financing. If we are unable to refinance existing debt on acceptable
terms or at all, we may need to reduce or delay capital expenditures, asset improvements, or strategic initiatives, which could negatively
affect our competitive position and financial performance.

 Our
business model involves high fixed costs, including property taxes and insurance costs, which we may be unable to adjust in a timely
manner in response to a reduction in our revenues.

 The
costs associated with owning and operating the Hotel are significant. Some of these costs (such as property taxes and insurance costs)
are fixed, meaning that such costs may not be altered in a timely manner in response to changes in demand for services. Failure to adjust
our expenses may adversely affect our business and results of operations. Our real property taxes may increase as property tax rates
change and as the values of properties are assessed and reassessed by tax authorities. Our real estate taxes do not depend on our revenues,
and generally we could not reduce them other than by disposing of our real estate assets.

 Insurance
premiums have increased significantly in recent years, and continued escalation may result in our inability to obtain adequate insurance
at acceptable premium rates. A continuation of this trend would appreciably increase the operating expenses of the Hotel. If we do not
obtain adequate insurance, to the extent that any of the events not covered by an insurance policy materialize, our financial condition
may be materially adversely affected. Further, factors such as climate change, extreme weather events, and increased litigation risk
have contributed to rising insurance premiums and reduced coverage availability in certain markets, including California. Limited insurance
options or higher costs could pressure our operating margins and cash flows.

 In
the future, our property may be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance
costs, repairs and maintenance and administrative expenses, which could reduce our cash flow and adversely affect our financial performance.
If our revenues decline and we are unable to reduce our expenses in a timely manner, our business and results of operations could be
adversely affected.

 Risk
of declining market values in marketable securities.

 The
Company invests from time to time in marketable securities. As a result, the Company is exposed to market volatility in connection with
these investments. The Company's financial position and financial performance could be adversely affected by worsening market conditions
or stagnant performance of such investments. Factors such as interest rate fluctuations, geopolitical events, changes in credit ratings,
and overall capital market volatility could also lead to unrealized or realized losses in our investment portfolio. In addition, a prolonged
decline in market values could reduce our liquidity or our ability to meet certain financial covenants.

 Illiquidity
risk in nonmarketable securities.

 Nonmarketable
securities are, by definition, instruments that are not readily salable in the capital markets, and when sold are usually at a substantial
discount. Thus, the holder is limited to return on investment from any income producing feature of the instrument, as any sale of such
an instrument would be subject to a substantial discount. Thus, a holder may need to hold such instruments for a longer period of time
and may be unable to liquidate the investment without incurring a substantial loss if cash is needed on short notice. This lack of liquidity
could adversely affect our ability to respond to changing market conditions or to reallocate capital to other strategic opportunities.

 Litigation
and legal proceedings could expose us to significant liabilities and thus negatively affect our financial results.

 We
are a party, from time to time, to various litigation claims and legal proceedings, government and regulatory inquiries and/or proceedings,
including, but not limited to, intellectual property, premises liability and breach of contract claims. Material legal proceedings are
described more fully in Note 15, Commitments and Contingencies, to our consolidated financial statements, included in Item 8 of this
Annual Report on Form 10-K.

 Litigation
is inherently unpredictable and defending these proceedings can result in significant ongoing expenditures and the diversion of our management's
time and attention from the operation of our business, which could have a negative effect on our business operations. Our failure to
successfully defend or settle any litigation or legal proceedings could result in liabilities that, to the extent not covered by our
insurance, could have a material adverse effect on our financial condition, revenue and profitability. In addition, regulatory investigations
or enforcement actions could result in fines, penalties, or other sanctions, some of which may not be covered by insurance. Any adverse
publicity resulting from litigation or regulatory matters could also harm our brand reputation and customer relationships, further impacting
revenues.

 The
threat of terrorism could adversely affect the number of customer visits to the Hotel.

 The
threat of terrorism has caused, and may in the future cause, a significant decrease in customer visits to San Francisco due to disruptions
in commercial and leisure travel patterns and concerns about travel safety. We cannot predict the extent to which disruptions in air
or other forms of travel as a result of any further terrorist act, outbreak of hostilities or escalation of war would adversely affect
our financial condition, results of operations or cash flows. The possibility of future attacks may hamper business and leisure travel
patterns and, accordingly, the performance of our business and our operations. Moreover, other security-related risks – including
cybersecurity threats impacting travel infrastructure, domestic or international civil unrest, and geopolitical tensions – could
have similar adverse effects on travel demand and hotel occupancy levels.

 We
depend in part, on third party management companies for the future success of our business and the loss of one or more of their key personnel
could have an adverse effect on our ability to manage our business and operate successfully and competitively or could be negatively
perceived in the capital markets.

 The
Hotel is managed by Aimbridge. Their ability to manage the Hotel and to operate successfully and competitively is dependent, in part,
upon the efforts and continued service of their managers. The departure of key personnel of current or future management companies could
have an adverse effect on our business and our ability to operate successfully and competitively, and it could be difficult to find replacements
for these key personnel, as competition for such personnel is intense. In addition, the termination or non-renewal of our management
agreement, changes in the terms of such agreement, or the failure of our management company to meet performance expectations could materially
impact our operations. Lack of a robust succession plan for management personnel could also heighten our operations risk in the event
of unexpected departures.

 Seasonality
and other related factors such as weather can be expected to cause quarterly fluctuations in revenue at the Hotel.

 The
hotel and resort industry are seasonal in nature. This seasonality can tend to cause quarterly fluctuations in revenues at the Hotel.
Our quarterly earnings may also be adversely affected by other related factors outside our control, including weather conditions and
poor economic conditions. Changes in climate patterns, including more frequent or severe weather events, could alter historical seasonal
demand trends or disrupt travel plans. As a result, we may have to enter into short-term borrowings in certain quarters in order to offset
these quarterly fluctuations in our revenues. If weather-related or climate-related events become more frequent or severe, the impact
on occupancy and average daily rates could be greater than historical experience suggests.

 The
hotel industry is heavily regulated and failure to comply with extensive regulatory requirements may result in an adverse effect on our
business.

 The
hotel industry is subject to extensive regulation and the Hotel must maintain its licenses and pay taxes and fees to continue operations.
Our property is subject to numerous laws, including those relating to the preparation and sale of food and beverages, including alcohol.
We are also subject to laws governing our relationship with our employees in such areas as minimum wage and maximum working hours, overtime,
working conditions, hiring and firing employees and work permits. Also, our ability to remodel, refurbish or add to our property may
be dependent upon our obtaining necessary building permits from local authorities. The failure to obtain any of these permits could adversely
affect our ability to increase revenues and net income through capital improvements of our property. In addition, we are subject to the
numerous rules and regulations relating to state and federal taxation. Compliance with these rules and regulations requires significant
management attention. Furthermore, compliance costs associated with such laws, regulations and licenses are significant. Any change in
the laws, regulations or licenses applicable to our business or a violation of any current or future laws or regulations applicable to
our business could require us to make substantial expenditures or could otherwise negatively affect the hotel's operations. We
are also subject to environmental, health, safety, accessibility, and privacy regulations, as well as increasing expectations for environmental,
social, and governance (ESG) disclosures and performance. Failure to comply with any of these requirements, or changes in regulatory
standards, could result in fines, penalties, litigation, or restrictions on our operations.

 Violations
of laws could result in, among other things, disciplinary action. If we fail to comply with regulatory requirements, this may result
in an adverse effect on our business. In addition, heightened regulatory scrutiny or enforcement actions could divert management's
attention and resources, impacting our financial performance.

 Uninsured
and underinsured losses could adversely affect our financial condition and results of operations.

 There
are certain types of losses, generally of a catastrophic nature, such as earthquakes and floods or terrorist acts, which may be uninsurable
or not economically insurable, or may be subject to insurance coverage limitations, such as large deductibles or co-payments. We will
use our discretion in determining amounts, coverage limits, deductibility provisions of insurance and the appropriateness of self-insuring,
with a view to maintaining appropriate insurance coverage on our investments at a reasonable cost and on suitable terms. Uninsured and
underinsured losses could harm our financial condition and results of operations. We could incur liabilities resulting from loss or injury
to the Hotel or to persons at the Hotel. Claims, whether or not they have merit, could harm the reputation of the Hotel or cause us to
incur expenses to the extent of insurance deductibles or losses in excess of policy limitations, which could harm our results of operations.
Moreover, recent trends in the insurance market have resulted in reduced coverage availability and higher premiums for catastrophic risks,
particularly in California. Climate change, extreme weather events, and geopolitical instability could further pressure insurance capacity
and costs.

 In
the event of a catastrophic loss, our insurance coverage may not be sufficient to cover the full current market value or replacement
cost of our lost investment. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of
the capital we have invested in the Hotel, as well as the anticipated future revenue from the property. In that event, we might nevertheless
remain obligated for any mortgage debt or other financial obligations related to the Hotel. In the event of a significant loss, our deductible
may be high, and we may be required to pay for all such repairs and, as a consequence, it could materially adversely affect our financial
condition. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from
using insurance proceeds to replace or renovate the Hotel after it has been damaged or destroyed. Under those circumstances, the insurance
proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.

 It
has generally become more difficult and expensive to obtain property and casualty insurance, including coverage for terrorism. When our
current insurance policies expire, we may encounter difficulty in obtaining or renewing property or casualty insurance on our property
at the same levels of coverage and under similar terms. Such insurance may be more limited and for some catastrophic risks (for example,
earthquake, flood and terrorism) may not be generally available at current levels. Even if we are able to renew our policies or to obtain
new policies at levels and with limitations consistent with our current policies, we cannot be sure that we will be able to obtain such
insurance at premium rates that are commercially reasonable. If we were unable to obtain adequate insurance on the Hotel for certain
risks, it could cause us to be in default under specific covenants on certain of our indebtedness or other contractual commitments that
require us to maintain adequate insurance on the Hotel to protect against the risk of loss. If this were to occur, or if we were unable
to obtain adequate insurance and the Hotel experienced damage which would otherwise have been covered by insurance, it could materially
adversely affect our financial condition and the operations of the Hotel.

 In
addition, insurance coverage for the Hotel and for casualty losses does not customarily cover damages that are characterized as punitive
or similar damages. As a result, any claims or legal proceedings, or settlement of any such claims or legal proceedings that result in
damages that are characterized as punitive or similar damages may not be covered by our insurance. If these types of damages are substantial,
our financial resources may be adversely affected. We may also face gaps in coverage for newly emerging risks, such as pandemic-related
business interruptions or cybersecurity-related losses, if insurers restrict or exclude such coverage in future policies.

 Cybersecurity
risks could disrupt our operations and adversely affect our business, even though no material incidents have occurred.

 We
rely on information technology systems, including those provided by third parties, to conduct our operations and maintain data integrity.
A significant cybersecurity incident, such as a data breach, ransomware attack, or other network disruption, could adversely affect our
operations, financial condition, and reputation. While we maintain cybersecurity risk management programs as described in Item 1C –
Cybersecurity and did not experience any material cybersecurity incidents during the fiscal year ended June 30, 2025, there can be no
assurance that future threats will not occur or that any such events would not have a material adverse impact.

 You
may lose all or part of your investment.

 There
is no assurance that the Company's initiatives to improve its profitability or liquidity and financial position will be successful.
If we are unable to successfully implement our strategic initiatives, respond to changing market conditions, or address operational challenges,
our business and financial performance could deteriorate. In addition, external factors – including economic downturns, competitive
pressures, regulatory changes, and uninsured losses – could also lead to decline in the value of your investment, including the
possibility of a total loss.

 The
price of the Company's common stock may fluctuate significantly, which could negatively affect the Company and holders of its common
stock.

 The
market price of the Company's common stock may fluctuate significantly from time to time as a result of many factors, including:
investors' perceptions of the Company and its prospects; investors' perceptions of the Company's and/or the industry's
risk and return characteristics relative to other investment alternatives; differences between actual financial and operating results
and those expected by investors and analysts; changes in our capital structure; trading volume fluctuations; actual or anticipated fluctuations
in quarterly financial and operational results; volatility in the equity securities market; and sales, or anticipated sales, of large
blocks of the Company's common stock. Other factors that could cause volatility include changes in macroeconomic conditions, interest
rate movements, regulatory developments, geopolitical events, and reduced liquidity in our stock. Significant volatility in our stock
price could also impact our ability to raise capital on favorable terms or at all.

 The
concentrated beneficial ownership of our common stock and the ability it affords to control our business may limit or eliminate other
shareholders' ability to influence corporate affairs.

 As
of June 30, 2025, InterGroup owns 75.9% of the Company's outstanding common stock. Because of this concentrated stock ownership,
the Company's largest shareholders will be able to significantly influence the election of the Company's board of directors
and all other decisions on all matters requiring shareholder approval. As a result, the ability of other shareholders to determine the
management and policies of the Company is significantly limited. The interests of these shareholders may differ from the interests of
other shareholders with respect to the issuance of shares, business transactions with, or sales to other companies, selection of officers
and directors and other business decisions. This level of control may also have an adverse impact on the market value of our shares because
our largest shareholders may institute or undertake transactions, policies or programs that may result in losses, may not take any steps
to increase our visibility in the financial community and/or may sell enough shares to significantly decrease our price per share. Furthermore,
this concentration of ownership could delay or prevent a change in control that other shareholders may view as beneficial, and could
reduce the marketability or liquidity of our common stock. Minority shareholders may have limited resource to influence corporate decisions,
including those relating to mergers, acquisitions, or other strategic transactions.

 Many
of the risk factors described above should be read in conjunction with the cautionary statement regarding forward-looking statements
contained in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations and in the 'Forward-looking
Statements' section of this Annual Report on Form 10-K.

 Item
1B. Unresolved Staff Comments.

 None.

 Item
1C. Cybersecurity.

 The
Company maintains cybersecurity risk management programs designed to help protect the security of data and technology infrastructure.
On an annual basis we conduct assessments to identify cyber risks and develop remediation plans to address identified vulnerabilities.
Our program is designed to detect, mitigate, and respond to cybersecurity incidents in a timely manner.

 Risk
management and strategy

 We
engage and implement risk management strategies to identify, assess, and manage material risks arising from cybersecurity threats and
alerts. Our method involves a systematic evaluation of all potential threats, vulnerabilities, and their possible impacts on the Company's
operations, data, and system integrity. Our cybersecurity risk management strategy includes:

 Identify
 cybersecurity risks to our environment;

 IT
 teams and third-party providers to investigate, contain, and resolve identified threats;

 monthly
 cybersecurity awareness training to our staff; and

 maintenance
 and periodic testing of a cybersecurity incident response plan.

 We
also engage external cybersecurity consultants and use industry-standard tools to help monitor our networks, review vulnerability scans,
and conduct penetration testing on a periodic basis. Our risk management practices and integrated into our overall enterprise risk management
framework, as discussed in Item 1A – Risk Factors.

 Management
and Board Oversight

 The
Company's management team is responsible for the oversight and administration of cybersecurity protocols. Our management team relies
on our third-party providers for administrating cybersecurity assessments to identify, manage, mitigate, and respond to cybersecurity
threats. Management updates the Board on any significant cybersecurity occurrences. The Board receives periodic briefings on cybersecurity
risks, incidents, and risk mitigation measures, and reviews management's cybersecurity policies and response plans at last annually.

 Cybersecurity
Incidents

the fiscal year ended June 30, 2025, the Company did not identify any cybersecurity incidents that had a material impact on our business
strategy, results of operations, or financial condition.

 Item
2. Properties.

 SAN
FRANCISCO HOTEL PROPERTY

 The
Hotel is owned by Portsmouth through its wholly owned subsidiary, Justice Operating Company, LLC. The Hotel is centrally located in the
Financial District in San Francisco, one block from the Transamerica Pyramid. The Embarcadero Center is within walking distance and North
Beach is two blocks away. Chinatown is directly across the bridge that runs from the Hotel to Portsmouth Square Park. The Hotel is a
31-story (including parking garage), steel and concrete, A-frame building, built in 1970. The Hotel has 544 well-appointed guest rooms
and luxury suites situated on 22 floors. The Hotel has a restaurant, a lounge, and a private dining room totaling approximately 3,700
square feet; additionally, there are two kitchens that service both restaurant and banquet operations and a fully equipped gym. The third
floor houses the Chinese Culture Center (the "CCC"), its administrative office, and a grand ballroom. The Hotel has approximately
22,000 square feet of meeting room space, including the grand ballroom. Other features of the Hotel include a 5-level underground parking
garage and a pedestrian bridge across Kearny Street connecting the Hotel and the CCC with Portsmouth Square Park in Chinatown.

 As
required by its senior lender, the Company will continue to make minimum payments into its furniture, fixtures, and equipment ("FF&E")
escrow account held by its senior lender in an amount equal to the greater of four percent (4%) of annual revenues or a minimum of $1,952,000
per annum, as adjusted pursuant to the loan agreement. In the opinion of management, the Hotel is adequately covered by insurance.

 HOTEL
FINANCINGS

 A.
Mortgage and Mezzanine Loan History

 In
December 2013, Justice Investors Limited Partnership ("Justice"), then a consolidated subsidiary of Portsmouth Square, Inc.
(the "Company"), obtained a $97,000,000 mortgage loan and a $20,000,000 mezzanine loan to fund the redemption of limited
partnership interests and repay a prior $42,940,000 mortgage loan. The mortgage loan was secured by the Company's principal asset,
the Hilton San Francisco Financial District (the "Hotel"), and bore interest at 5.275% per annum. The loan required interest-only
payments through January 2017 and began amortizing thereafter on a 30-year schedule, maturing on January 1, 2024. The mortgage loan was
guaranteed in part by Portsmouth.

 The
mezzanine loan, originally bearing interest at 9.75% per annum and maturing concurrently with the senior loan, was secured by the membership
interests of Justice Operating Company, LLC ("Operating"), held by Justice Mezzanine Company, LLC ("Mezzanine"),
and was subordinated to the mortgage debt. The mezzanine loan was refinanced in July 2019 through a new agreement with CRED REIT Holdco
LLC ("Mezzanine Lender") in the amount of $20,000,000, at a reduced fixed interest rate of 7.25%, also maturing on January
1, 2024.

 As
of June 30, 2024, the outstanding mortgage loan balance was $76,962,000. As of December 31, 2024, the outstanding balance was $75,789,000.

 B.
Forbearance Agreements and Defaults

 Due
to the maturity of both loans on January 1, 2024, and the absence of full repayment by that date, the Company negotiated forbearance
agreements with both lenders on April 29, 2024.

Loan Forbearance Agreement (U.S. Bank and others, the "Mortgage Lender"):

 Provided
 forbearance through January 1, 2025, assuming no termination event.

 Required
 a 10% principal paydown of $8,590,000.

 Included
 accrual of 4% default interest, retroactive to January 1, 2024, payable upon final maturity or prepayment.

 Included
 a 1% forbearance fee of $859,000, paid at execution.

 continued timely monthly payments during the forbearance period.

 Guaranteed
 by Portsmouth.

Loan Forbearance Agreement (CRED REIT Holdco LLC):

 Provided
 forbearance through January 1, 2025, contingent on no termination event.

 Lender advanced $4.5 million to cover the senior loan principal paydown.

 Required
 4% default interest accrual and a 1% forbearance fee ($245,000), both payable at final maturity or prepayment.

 No
 payments were required during the forbearance period.

 Guaranteed
 by Portsmouth.

 Both
agreements contained customary covenants, events of default, and representations and warranties. On January 3, 2025, the Company received
a Notice of Termination from the Mortgage Lender, citing a termination event for failure to repay the debt by the forbearance expiration.
On January 14, 2025, the Mezzanine Lender issued a Notice of Default, asserting its rights to pursue all remedies under the agreement.

 These
defaults were the primary contributors to the Company's substantial doubt assessment under ASC 205-40, as disclosed in Note 2 –
Liquidity.

 C.
Debt Refinancing Completed on March 28, 2025

 On
January 21, 2025, the Company executed a non-binding term sheet with Prime Finance ("Prime") for a new senior loan. On March
28, 2025, the Company closed on both a senior mortgage loan and modified mezzanine loan (collectively, the "Loan Agreements"),
fully retiring the prior debt with U.S. Bank and CRED REIT Holdco LLC. The refinancing resulted in an increase in overall leverage of
approximately $1 million.

 Loan: Operating entered into a $67,000,000 Mortgage Loan Agreement with Prime. The loan bears interest at SOFR + 4.75%, with a SOFR
 cap of 4.50%, and is interest-only through maturity. Matures April 9, 2027, with three one-year extension options, subject to satisfaction
 of financial and operational covenants. The Interest Rate Cap caps Term SOFR at 4.50% and has a notional amount equal to or greater
 than the outstanding principal balance of the loan. The Company paid a premium of approximately $136,000 for the cap at inception.
 The loan is secured by the Hotel.

 Loan: Mezzanine executed a modified Mezzanine Loan Agreement with CRED REIT Holdco LLC for a principal amount of $36,300,000 at a
 fixed rate of 7.25% per annum, on matching maturity and extension terms to the senior loan. The loan modifications were material
 in nature and therefore the transaction under ASC 470-50 accounted for as an extinguishment. The loan is secured by Mezzanine's
 membership interest in Operating. The lender agreed to waive a forbearance fee of $245,000 and default interest of approximately
 $1.17 million, for a total waiver of $1.416 million. The waived amounts were recorded as a gain on extinguishment of debt.

continues to provide a limited guaranty in connection with both facilities. The Company is also subject to customary covenants, including
financial ratios and affirmative obligations.

 D.
Related Party Guarantee – InterGroup

 Under
the March 28, 2025 refinancing, all guaranties associated with the prior 2013 senior mortgage and 2019 mezzanine facilities were terminated.
The current senior mortgage and amended mezzanine facilities include customary limited non-recourse carve-out and performance undertakings
provided at the Portsmouth/operating-entity level. InterGroup is not a guarantor of the March 28, 2025 senior mortgage loan or the amended
mezzanine loan.

 E.
DSCR and Lockbox Arrangements

has not maintained compliance with the required Debt Service Coverage Ratio ("DSCR") under both the original and refinanced
loans. Operating did not maintain compliance with the required Debt Service Coverage Ratio (DSCR") under the original December
2013 loan and is subject to ongoing DSCR requirements under the refinanced loans. Under the March 28, 2025 refinancing, a Cash Management
Agreement with Prime Finance ("Lender") and Wells Fargo Bank, N.A. ("Cash Management Bank") requires that all
Hotel cash receipts be deposited into a lender-controlled account. This lockbox arrangement remains in effect until DSCR conditions are
met for two consecutive quarters. Funds are disbursed for approved operating expenses, debt service (including senior interest-only),
and required reserves (insurance, real estate taxes, and furniture, fixtures and equipment) in accordance with lender-approved budgets.
Excess cash, if any, is held in lender-controlled accounts for future interest-only payments to the Mezzanine lender, subject to certain
conditions under the loan agreements with both lenders.

Party Financing

 On
July 2, 2014, the Partnership secured an unsecured loan from InterGroup in the principal amount of $4,250,000, bearing a fixed annual
interest rate of 12%, with interest-only payments due monthly. InterGroup also received a loan fee equal to 3% of the principal. The
loan was prepayable at any time without penalty and was subsequently extended through July 31, 2023.

 On
December 16, 2020, the Partnership and InterGroup executed a loan modification agreement that increased the borrowing capacity, as needed,
to a maximum of $10,000,000. Subsequently, on December 31, 2021, Portsmouth and InterGroup entered into a separate loan modification
agreement, raising Portsmouth's borrowing limit to $16,000,000. Following the dissolution of the Partnership in December 2021,
Portsmouth assumed the outstanding loan obligation to InterGroup in the amount of $11,350,000.

 In
July 2023, the loan's maturity date was extended to July 31, 2025, and the available borrowing capacity was increased to $20,000,000.
In connection with this increase, the Company agreed to pay InterGroup a 0.5% loan modification fee applicable to the additional $10,000,000.

 In
March 2024, a further modification agreement between Portsmouth and InterGroup raised the available borrowing limit to $30,000,000, subject
to a 0.5% modification fee applicable to the $10,000,000 increase.

 In
March 2025, another amendment was executed, increasing Portsmouth's borrowing capacity to $40,000,000 and extending the maturity
date to July 31, 2027. In May 2025, the parties agreed to reduce the loan's interest rate from 12% to 9%.

fiscal 2025 and 2024, InterGroup advanced $11,615,000 and $10,793,000, respectively, to Portsmouth under the related-party credit facility.
Proceeds were used primarily to (i) satisfy the senior lender's required 10% principal paydown in April 2024 in connection with
the one-year forbearance and (ii) reduce the senior loan balance to approximately $67.0 million (from approximately $76.0 million) upon
the March 28, 2025 refinancing. In addition, the refinancing required the establishment of (a) a $5.0 million cash reserve to cover potential
operating shortfalls during the first two years of the new loan and (b) a $1.35 million capital improvement reserve to complete the renovation
and return to inventory of 14 guest rooms previously converted to administrative offices. A portion of the advances funded these required
reserves and, to a lesser extent, pre-refinancing operating shortfalls. As of June 30, 2025 and 2024, amounts owed to InterGroup were
$38,108,000 and $26,493,000, respectively; no principal payments have been made to date. Following the March 2025 refinancing, ongoing
Hotel operations have been funded from operating cash flows, and the InterGroup facility is maintained as a contingent source of liquidity.

 If
necessary, the Company may amend its by-laws to increase the number of authorized shares, allowing it to issue additional equity to raise
capital in the public markets. Such actions would be subject to Board approval and, if required, shareholder approval under applicable
corporate law and listing rules.

 Item
3. Legal Proceedings.

 The
Company may, from time to time, be subject to legal proceedings, claims, and litigation arising in the ordinary course of business. As
of June 30, 2025, the Company is not a party to any material pending legal proceedings. The Company would defend itself vigorously against
any such claims. Management believes that the outcome of any ordinary course matters, if they were to arise, would not have a material
adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

 Item
4. Mine Safety Disclosures.

 Not
applicable – the Company does not operate any mines subject to the Federal Mine Safety and Health act of 1977.

 PART
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 MARKET
INFORMATION

 Portsmouth's
common stock is traded on the OTC Markets Group Inc., Pink Open Market under the symbol PRSI. As of June 30, 2025, the number of holders
of record of the Company's Common Stock was approximately 129. Such number of owners is determined from the Company's shareholders
records and does not include beneficial owners of the Company's Common Stock whose shares are held in the names of various brokers,
clearing agencies or other nominees.

 DIVIDENDS

 It
is expected that the Company does not anticipate a return to a regular dividend policy until such time that Hotel cash flows, distributions,
and other economic factors support such action. The Company will continue to review and may modify its dividend policy to meet such strategic
and investment objectives as may be determined by the Board of Directors.

 SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

does not have any securities authorized for issuance under equity compensation plans.

 PURCHASES
OF EQUITY SECURITIES

did not repurchase any of its own securities during the fourth quarter of its fiscal year ended June 30, 2025 and does not have any publicly
announced repurchase program.

 Item
6. Reserved.

 Not
applicable.

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying
consolidated financial statements, related notes included thereto and Item 1A., "Risk Factors," appearing elsewhere in this
Annual Report on Form 10-K. For discussion of fiscal 2024 compared to fiscal 2023, see Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended June 30, 2024.

 NEGATIVE
EFFECTS OF THE PUBLIC PERCEPTION OF SAN FRANCISCO

 The
San Francisco market continues to face public perception challenges; however, we are seeing a shift in public opinion with a new Mayor
determined to turn the city around. The city has taken meaningful actions to clean city streets and has made significant progress in
reducing homeless encampments. The city is once again at the forefront of technology and is widely referred to as the Artificial Intelligence
("AI") capital of the world. San Francisco has seen citywide growth focused on this area including Databricks, Snowflake
and the newest addition, Microsoft in November 2025.

 RESULTS
OF OPERATIONS

 The
Company's principal source of revenue is its ownership in Justice Operating Company, LLC ("Operating") inclusive of
hotel room revenue, food and beverage revenue, garage revenue, and revenue from other operating departments. Operating owns the Hotel
and related facilities, including a five-level underground parking garage. The financial statements of Operating are consolidated with
those of the Company.

Year Ended June 30, 2025, Compared to Fiscal Year Ended June 30, 2024

 The
Company had a pre-tax net loss of $9,109,000 and net loss of $9,110,000 for the year ended June 30, 2025 compared to a pre-tax net loss
of $11,374,000 and net loss of $11,375,000 for the year ended June 30, 2024. The decrease in pre-tax loss for fiscal 2025 compared to
fiscal 2024, was primarily attributable to the refinance waiver of default interest and forbearance fee by the mezzanine lender and increased
room revenues.

 The
Company had net loss from Hotel operations of $7,636,000 for the year ended June 30, 2025 compared to net loss of $9,423,000 for the
year ended June 30, 2024. The change was primarily attributable to a $1,416,000 refinance waiver of default interest and forbearance
fee by the mezzanine lender and increased room revenue.

 The
following table sets forth a more detailed presentation of Hotel operations for the years ended June 30, 2025 and 2024:

 For the year

 2025

 2024

 Hotel revenues:

 Hotel rooms

 $
 39,648,000

 $
 35,239,000

 Food and beverage

 2,862,000

 3,213,000

 Garage

 3,214,000

 2,988,000

 Other
 operating departments

 639,000

 446,000

 Total Hotel revenues

 expenses excluding depreciation and amortization

 (37,631,000
)

 (36,139,000
)

 Operating income before interest, depreciation,
 and amortization

 8,732,000

 5,747,000

 Gain on extinguishment of debt

 1,416,000

 -

 Interest expense - mortgages

 (10,680,000
)

 (9,407,000
)

 Interest expense – related party

 (3,570,000
)

 (2,369,000
)

 Depreciation and amortization
 expense

 (3,534,000
)

 (3,394,000
)

 Net loss from Hotel
 operations

 $
 (7,636,000
)

 $
 (9,423,000
)

 For
the year ended June 30, 2025, the Hotel had operating income of $8,732,000 before interest, depreciation, and amortization based on total
operating revenues of $46,363,000. The following table sets forth the monthly average occupancy percentage of the Hotel for the fiscal
years ended June 30, 2025 and 2024.

 Month

 Jul

 Aug

 Sep

 Oct

 Nov

 Dec

 Jan

 Feb

 Mar

 Apr

 May

 Jun

 Year

 Year

 2024

 2024

 2024

 2024

 2024

 2024

 2025

 2025

 2025

 2025

 2025

 2025

 2024
 - 2025

 Average Occupancy %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 Year

 2023

 2023

 2023

 2023

 2023

 2023

 2024

 2024

 2024

 2024

 2024

 2024

 2023
 – 2024

 Average
 Occupancy %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 %

 Total
operating expenses increased by $1,492,000 due to increase in union salaries and wages, Hilton marketing and guest loyalty fees, credit
card fees, and travel agent and group commissions.

 The
following table sets forth the average daily room rate, average occupancy percentage and room revenue per available room ("RevPAR")
of the Hotel for the years ended June 30, 2025 and 2024.

 For
 the Year
 Ended
 June 30,

 Average
 Daily
 Rate

 Average
 Occupancy
 %

 RevPAR

 2025

 $

 %

 $

 2024

 $

 %

 $

 The
Hotel's revenues increased by 10% year over year. Average daily rate increased by $1, average occupancy increased 10%, and RevPAR
increased by $23 for the twelve months ended June 30, 2025 compared to the twelve months ended June 30, 2024.

 The
Company had a net gain on marketable securities of $3,000 for the year ended June 30, 2025 compared to a net loss on marketable securities
of $122,000 for the year ended June 30, 2024. For the year ended June 30, 2025, the Company had a net realized loss of $10,000 and a
net unrealized gain of $13,000. For the year ended June 30, 2024, the Company had a net realized loss of $39,000 and a net unrealized
loss of $83,000. Gains and losses on marketable securities may fluctuate significantly from period to period in the future. However,
the amount of gain or loss on marketable securities for any given period is not necessarily predictive, and variations from period to
period may have limited analytical value. For a more detailed description of the composition of the Company's marketable securities
see the Marketable Securities section below.

 The
Company had no other investments at June 30, 2025 and 2024.

 The
Company consolidates Justice (Hotel) for financial reporting purposes and is taxed on its Hotel operations. The Company does not record
an income tax benefit from its pre-tax losses due to its continued operating losses in each of the past three consecutive taxable years.

 MARKETABLE
SECURITIES AND OTHER INVESTMENTS

 As
of June 30, 2025 and 2024, the Company had investments in marketable equity securities of $127,000 and $209,000, respectively. The following
table shows the composition of the Company's marketable securities portfolio by selected industry groups:

 % of Total

 As of June 30, 2025

 Industry
 Group

 Fair
 Value

 REITs and real estate
 companies

 $

 100.0
 %

 % of Total

 As of June 30, 2024

 Industry
 Group

 Fair
 Value

 REITs and real estate companies

 $
 202,000

 96.7
 %

 Basic materials

 7,000

 3.3
 %

 $

 100.0
 %

 The
following table shows the net gain or loss on the Company's marketable securities and the associated margin interest and trading
expenses for the respective years.

 For the year

 2025

 2024

 Net gain (loss) on marketable securities

 $
 3,000

 $
 (122,000
)

 Dividend and interest income

 10,000

 13,000

 Trading expenses

 (159,000
)

 (160,000
)

 Net loss from marketable

 $
 (146,000
)

 $
 (269,000
)

 FINANCIAL
CONDITION, LIQUIDITY AND CAPITAL SOURCES

 The
Company had cash, cash equivalents and restricted cash of $11,722,000 and $4,775,000 as of June 30, 2025 and 2024, respectively. The
Company had marketable securities, net of margin due to securities broker, of $127,000 and $209,000 as of June 30, 2025 and 2024, respectively.
These marketable securities are short-term investments and readily convertible to cash.

Party Credit Facility – InterGroup

 The
Company maintains an unsecured related-party revolving credit facility with its majority shareholder, The InterGroup Corporation ("InterGroup"),
originally established in 2014 and amended multiple times. While the facility remains available, management is not currently relying
on it to fund ongoing Hotel operations, which – following the March 28, 2025 refinancing – have been self-funding from operating
cash flows.

 Key
modifications include:

 December
 2021: Portsmouth assumed $11.35 million in outstanding debt upon the dissolution of Justice Investors L.P.

 July
 2023: Increased available borrowings to $20,000,000 and extended maturity to July 31, 2025 with a 0.5% loan modification fee.

 March
 2024: Increased available borrowings to $30,000,000 with a 0.5% loan modification fee

 March
 2025: Further increased available borrowing capacity to $40,000,000 and extended the maturity to July 31, 2027.

 May
 2025: Reduction of interest rate from 12% to 9%.

 The
facility now bears 9% annual interest, is interest-only, and may be prepaid at any time without penalty. During the fiscal year ended
June 30, 2025, the Company borrowed an additional $11,615,000 under the facility. As of June 30, 2025, the outstanding balance was $38,108,000.
The facility is maintained as a contingency source of liquidity; management currently expects to satisfy near-term working capital needs
from operating cash flows and cash on hand.

 The
Company may also consider amending its by-laws to increase authorized shares and pursue public capital market offerings if deemed necessary
to support liquidity.

 Liquidity
Requirements

 The
Company's short-term liquidity needs include:

 Hotel
 operating costs, including payroll, utilities, franchise and management fees,

 Corporate
 overhead and tax obligations,

 payments and required loan maintenance under both senior and mezzanine debt agreements, and

 Routine
 repair and maintenance capital expenditures at the Hotel.

 Long-term
liquidity requirements include:

 Scheduled
 debt maturities, including those disclosed in Note 8 and 9, and

 Capital
 improvements to maintain the competitiveness and operational standards of the Hotel under
 its Hilton franchise agreement.

 The
Company intends to meet these obligations using a combination of:

 Available
 cash on hand,

 cash flows,

 Availability
 under the InterGroup related-party revolving credit facility, if needed; and

 Other
 potential financing or equity alternatives.

 Management's
Liquidity Assessment

 As
further discussed in Note 2 – Liquidity, the Company has taken proactive steps to stabilize its liquidity profile, including:

 Completion
 of a refinancing of its senior and mezzanine debt in March 2025,

 Continuing
 cost controls and selective capital expenditure deferrals,

 Maintenance
 of access to related-party financing capacity; and

 Maintenance
 of a lender-controlled lockbox cash management system.

 While
management believes that current liquidity sources and available borrowing capacity will be sufficient to support near-term working capital
needs—even in the event of continued pressure on hotel performance indicators such as occupancy and RevPAR—there can be no
assurance that unforeseen market or operational conditions will not adversely affect the Company's liquidity position.

 The
Company continues to evaluate strategic alternatives and operational adjustments in response to ongoing macroeconomic and market-specific
challenges in San Francisco's hospitality sector.

 Going
Concern

 The
accompanying condensed consolidated financial statements have been prepared in accordance with US GAAP and on a going concern basis,
which assumes the Company will continue to operate in the normal course of business. In accordance with Accounting Standards Codification
("ASC") Topic 205-40, Presentation of Financial Statements – Going Concern, management evaluates whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going
concern within one year after the date that the financial statements are issued.

 As
further discussed in Note 1 - Going Concern, in prior periods, management disclosed substantial doubt about Portsmouth's ability
to continue as a going concern due to the January 1, 2024 maturities of its senior and mezzanine loans and related default notices. On
March 28, 2025, Portsmouth completed a comprehensive refinancing that materially improved its capital structure and liquidity profile.
The conditions and events that previously raised substantial doubt have been alleviated by management's plans and actions, including
the March 28, 2025 refinancing and subsequent operating performance. Based on the refinancing and current forecasts for the twelve months
following issuance of these financial statements, management has concluded there are no conditions or events that raise substantial doubt
about Portsmouth's ability to continue as a going concern under ASC 205-40. While risks remain (including San Francisco market
dynamics and macroeconomic factors), management believes available liquidity and cash generation from operations are sufficient for near-term
needs.

 Following
the refinancing, the Company has remained current on all required debt service payments, maintained covenant compliance, and executed
significant property upgrades intended to support competitive positioning and revenue growth. Based on this improved capital structure
and forecasted liquidity for the twelve months following the date of issuance of these financial statements, management has concluded
that there are no conditions or events that raise substantial doubt about the Company's ability to continue as a going concern.
Accordingly, management's evaluation under ASC 205-40 concludes that substantial doubt does not exist because the previously identified
conditions and events have been alleviated. See Note 1 – Going Concern for (1) the conditions/events originally identified, (2)
management's plans that are probable of effective implementation and mitigation, (3) the outcome of the assessment, and (4) remaining
risks if plans are not executed as expected. The Company continues to evaluate strategic alternatives and operational adjustments in
response to ongoing macroeconomic and market-specific challenges in San Francisco's hospitality sector.

 1)
Conditions or Events that initially raised substantial doubt:

In prior periods, maturities of senior and mezzanine loans on January 1, 2024, and related default notices.

Historical disclosure of substantial doubt prior to the March 28, 2025 refinancing.

 2)
Management's Plans (probable of implementation and mitigation):

Comprehensive refinancing completed March 28, 2025, materially improving capital structure and liquidity profile.

Post-refinancing: current on all required debt service, covenant compliance maintained, and execution of property upgrades supporting
competitive positioning and revenue growth.

 3)
Assessment Outcome (twelve months from issuance date):

Management has concluded there are no conditions or events that raise substantial doubt about the Company's ability to continue
as a going concern under ASC 205-40.

 4)
Risks if plans are not executed as expected:

Ongoing San Francisco market dynamics and macroeconomic factors; continued pressure on occupancy/RevPAR could adversely affect liquidity.

No assurance that unforeseen market or operational conditions will not adversely affect the Company's liquidity position.

 MATERIAL
CONTRACTUAL OBLIGATIONS

 The
following table provides a summary of the Company's material financial obligations which also includes interest.

 Total

 Year

 2026

 Year

 2027

 Year

 2028

 Year

 2029

 Year

2030

 Thereafter

 Mortgage notes payable

 $

 $
 -

 $

 $
 -

 $
 -

 $
 -

 $
 -

 Hilton/Aimbridge other notes payable

 1,979,000

 567,000

 463,000

 -

 Related party notes payable

 -

 -

 -

 -

 -

 Interest mortgage notes payable

 19,693,000

 8,916,000

 10,777,000

 -

 -

 -

 -

 Interest related party
 notes payable

 17,053,000

 4,580,000

 4,573,000

 7,900,000

 -

 -

 -

 Total

 $
 180,133,000

 $
 14,063,000

 $
 119,113,000

 $
 46,325,000

 $

 $

 $
 -

Notes Payable

entered into a $67,000,000 Mortgage Loan Agreement with Prime. The loan bears interest at SOFR + 4.75%, with a SOFR cap of 4.50%, and
is interest-only through maturity. Matures April 9, 2027, with three one-year extension options, subject to satisfaction of financial
and operational covenants. The Interest Rate Cap caps Term SOFR at 4.50% and has a notional amount equal to or greater than the outstanding
principal balance of the loan. The Company paid a premium of approximately $136,000 for the cap at inception. The loan is secured by
the Hotel. Mezzanine executed a modified Mezzanine Loan Agreement with CRED REIT Holdco LLC for a principal amount of $36,300,000. The
loan accrues interest at a fixed rate of 7.25% per annum, on matching maturity and extension terms to the senior loan. The loan is secured
by Mezzanine's membership interest in Operating.

Party Notes Payable

and accrued interest are due in full at maturity; no monthly principal or interest payments are required prior.

 OFF-BALANCE
SHEET ARRANGEMENTS

 As
of June 30, 2025, the Company has no material off balance sheet arrangements.

 IMPACT
OF INFLATION

 Hotel
room rates are typically impacted by supply and demand factors, not inflation, since rental of a hotel room is usually for a limited
number of nights. Room rates can be, and usually are, adjusted to account for inflationary cost increases. Since Aimbridge has the power
and ability under the terms of its management agreement to adjust Hotel room rates on an ongoing basis, there
is minimal expected impact on revenues due to inflation. For the two most recent fiscal years, the impact of inflation on the Company's
income has not been material.

 CRITICAL
ACCOUNTING POLICIES AND ESTIMATES

 Critical
accounting policies are those that are most significant to the portrayal of our financial position and results of operations and require
judgments by management in order to make estimates about the effect of matters that are inherently uncertain. The preparation of these
financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements.
We evaluate our estimates on an ongoing basis, including those related to the consolidation of our subsidiaries, revenues, allowance
for doubtful accounts, accruals, asset impairments, other investments, income taxes, and commitments and contingencies. We base our estimates
on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates
and different assumptions or conditions could materially affect such estimates.

 INCOME
TAXES

 Judgment
is required in addressing the future tax consequences of events that have been recognized in our consolidated financial statements or
tax returns (e.g., realization of deferred tax assets, changes in tax laws, or interpretations thereof). In addition, we are subject
to examination of our income tax returns by the IRS and other tax authorities. A change in the assessment of the outcomes of such matters
could materially impact our consolidated financial statements. We evaluate tax positions taken or expected to be taken on a tax return
to determine whether they are more likely than not of being sustained, assuming that the tax reporting positions will be examined by
taxing authorities with full knowledge of all relevant information, prior to recording the related tax benefit in our consolidated financial
statements. If a position does not meet the more likely than not standard, the benefit cannot be recognized. Assumptions, judgment, and
the use of estimates are required in determining if the "more likely than not" standard has been met when developing the
provision for income taxes. A change in the assessment of the "more likely than not" standard with respect to a position
could materially impact our consolidated financial statements.

 DEFERRED
INCOME TAXES – VALUATION ALLOWANCE

 We
assess the realizability of our deferred tax assets quarterly and recognize a valuation allowance when it is more likely than not that
some or all of our deferred tax assets are not realizable. This assessment is completed by tax jurisdiction and relies on the weight
of both positive and negative evidence available, with significant weight placed on recent financial results. Cumulative pre-tax losses
for the three-year period are considered significant objective negative evidence that some or all of our deferred tax assets may not
be realizable. Cumulative reported pre-tax income is considered objectively verifiable positive evidence of our ability to generate positive
pre-tax income in the future. In accordance with GAAP, when there is a recent history of pre-tax losses, there is little or no weight
placed on forecasts for purposes of assessing the recoverability of our deferred tax assets. When necessary, we use systematic and logical
methods to estimate when deferred tax liabilities will reverse and generate taxable income and when deferred tax assets will reverse
and generate tax deductions. Assumptions, judgment, and the use of estimates are required when scheduling the reversal of deferred tax
assets and liabilities, and the exercise is inherently complex and subjective. However, significant judgment will be required to determine
the timing and amount of any reversal of the valuation allowance in future periods.

 HOTEL
ASSETS AND DEFINITE-LIVED INTANGIBLE ASSETS

 We
evaluate property and equipment, and definite-lived intangible assets for impairment quarterly, and when events or circumstances indicate
the carrying value may not be recoverable, we evaluate the net book value of the assets by comparing to the projected undiscounted cash
flows of the assets. We use judgment to determine whether indications of impairment exist and consider our knowledge of the hospitality
industry, historical experience, location of the property, market conditions, and property-specific information available at the time
of the assessment. The results of our analysis could vary from period to period depending on how our judgment is applied and the facts
and circumstances available at the time of the analysis. When an indicator of impairment exists, judgment is also required in determining
the assumptions and estimates to use within the recoverability analysis and when calculating the fair value of the asset or asset group,
if applicable. Changes in economic and operating conditions impacting the judgments used could result in impairments to our long-lived
assets in future periods. Historically, changes in estimates used in the property and equipment and definite-lived intangible assets
impairment assessment process have not resulted in material impairment charges in subsequent periods as a result of changes made to those
estimates. There were no indicators of impairment of Hotel investments or intangible assets, and accordingly there were no impairment
losses recorded for the years ended June 30, 2025 and 2024.

 Item
7A. Quantitative and Qualitative Disclosures about Market Risk.

 This
disclosure is not required for smaller reporting companies under applicable SEC regulations.

 Item
8. Financial Statements and Supplementary Data.

 TO CONSOLIDATED FINANCIAL STATEMENTS

 PAGE

 Report
 of Independent Registered Public Accounting Firm

 Balance Sheets – As of June 30, 2025 and 2024

 Statements of Operations – For years ended June 30, 2025 and 2024

 Statements of Shareholders' Deficit – For years ended June 30, 2025 and 2024

 Statements of Cash Flows – For years ended June 30, 2025 and 2024

 Notes
 to the Consolidated Financial Statements

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Board of Directors and Shareholders of

Square, Inc.:

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Portsmouth Square, Inc. and its subsidiaries (the "Company")
as of June 30, 2025 and 2024, and the related consolidated statements of operations, shareholders' deficit, and cash flows for
the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2025,
in conformity with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical
Audit Matter

 The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication
of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts
or disclosures to which it relates.

 Evaluation
of the Company's Ability to Continue as a Going Concern

 Description
of the Matter:

 The
Company's recurring losses from operations, negative cash flows, accumulated deficit and long-term debt maturities raised substantial
doubt about its ability to continue as a going concern. As disclosed in Note 1 to the financial statements, the Company's ability
to continue as a going concern involved management's evaluation of the effect of successfully refinancing the Company's long-term
debt and management's significant assumptions and judgments related to forecasting future cash flows.

 We
identified the evaluation of the Company's ability to continue as a going concern as a critical audit matter. This matter required
especially challenging auditor judgment due to the complexity and subjectivity involved in assessing management's forecasts and
assumptions, and the potential impact on the financial statements if the going concern basis was not appropriate.

 How
We Addressed the Matter in Our Audit:

 To
evaluate the Company's conclusion that the conditions and events raising substantial doubt about the Company's ability to
continue as a going concern have been alleviated, we evaluated management's forecasts that included underlying assumptions, budget
to actual comparisons, current and projected economic and geographic factors, the impact of successfully refinancing the long-term debt
and the consideration of subsequent events occurring after the balance sheet date. We also evaluated the adequacy of the Company's
disclosures regarding the alleviation of substantial doubt related to its ability to continue as a going concern and management's
plans and actions to address those concerns.

 /s/
 WithumSmith+Brown, PC

 We
have served as the Company's auditor since 2022.

 East
Brunswick, NJ

 PCAOB
ID Number 100

 CONSOLIDATED
BALANCE SHEETS

 As of

 June
 30, 2025

 June
 30, 2024

 ASSETS

 in hotel, net

 $
 33,783,000

 $
 35,065,000

 Investment in marketable

 Cash and cash equivalents

 4,470,000

 3,511,000

 Restricted cash

 7,252,000

 1,264,000

 Accounts receivable - Hotel,
 net

 397,000

 519,000

 Other
 assets

 891,000

 834,000

 Total
 assets

 $
 46,920,000

 $
 41,402,000

 LIABILITIES AND SHAREHOLDERS'
 DEFICIT

 Liabilities:

 Accounts payable and other
 liabilities - Hotel

 $
 12,671,000

 $
 13,756,000

 Accounts payable and other
 liabilities

 129,000

 1,477,000

 Accounts payable to related
 party

 16,634,000

 11,515,000

 Related party notes payable

 26,493,000

 Other notes payable

 1,979,000

 2,388,000

 notes payable - Hotel, net

 101,519,000

 100,783,000

 Total
 liabilities

 171,040,000

 156,412,000

 Commitments and Contingencies - Note 15

 -

 -

 Shareholders' deficit:

 Common stock, no par value:
 Authorized shares - 750,000; 734,187 shares issued and outstanding as of June 30, 2025 and 2024, respectively

 Accumulated
 deficit

 ( 126,212,000
)

 ( 117,102,000
)

 Total
 shareholders' deficit

 ( 124,120,000
)

 ( 115,010,000
)

 Total
 liabilities and shareholders' deficit

 $
 46,920,000

 $
 41,402,000

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

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 2025

 2024

 Revenue
 - Hotel

 $

 $

 Costs and operating expenses

 Hotel operating expenses

 ( 37,631,000
)

 ( 36,139,000
)

 Hotel depreciation and
 amortization expense

 ( 3,534,000
)

 ( 3,394,000
)

 General
 and administrative expense

 ( 1,327,000
)

 ( 1,682,000
)

 Total costs and operating
 expenses

 ( 42,492,000
)

 ( 41,215,000
)

 Income from operations

 3,871,000

 671,000

 Other income (expense)

 Interest expense - mortgage

 ( 10,680,000
)

 ( 9,407,000
)

 Interest expense - related
 party

 ( 3,570,000
)

 ( 2,369,000
)

 Net realized loss on marketable

 ( 10,000
)

 ( 39,000
)

 Net unrealized gain (loss)
 on marketable securities

 13,000

 ( 83,000
)

 Gain on extinguishment
 of debt

 1,416,000

 -

 Dividend and interest income

 10,000

 13,000

 Trading
 and margin interest expense

 ( 159,000
)

 ( 160,000
)

 Total other expense, net

 ( 12,980,000
)

 ( 12,045,000
)

 Loss before income taxes

 ( 9,109,000
)

 ( 11,374,000
)

 Income tax expense

)

)

 Net
 loss

 $
)

 $
)

 Basic and diluted net
 loss per share

 $
 ( 12.41
)

 $
 ( 15.49
)

 Weighted average number
 of common shares outstanding - basic and diluted

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

 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' DEFICIT

 Total

 Common
 Stock

 Accumulated

 Shareholders'

 Shares

 Amount

 Deficit

 Deficit

 Balance at July 1, 2023

 $

 $
 ( 105,727,000
)

 $
 ( 103,635,000
)

 -

 -

)

)

 Balance at June 30, 2024

 ( 117,102,000
)

 ( 115,010,000
)

 Balance

 ( 117,102,000
)

 ( 115,010,000
)

 -

 -

)

)

 Balance at June 30,
 2025

 $

 $
 ( 126,212,000
)

 $
 ( 124,120,000
)

 Balance

 $

 $
 ( 126,212,000
)

 $
 ( 124,120,000
)

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

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 2025

 2024

 Cash flows from operating
 activities:

 $
)

 $
)

 Adjustments to reconcile
 net loss to net cash (used in) provided by operating activities:

 Net unrealized (gain) loss
 on marketable securities

 ( 13,000
)

 83,000

 Amortization of other notes
 payable

 ( 409,000
)

 ( 566,000
)

 Gain on extinguishment
 of debt

 ( 1,416,000
)

 -

 Depreciation and amortization

 3,534,000

 3,394,000

 Amortization of loan cost

 1,004,000

 920,000

 Changes in operating assets
 and liabilities:

 Investment in marketable

 95,000

 67,000

 Accounts receivable - Hotel,
 net

 122,000

 ( 100,000
)

 Other assets

 ( 57,000
)

 ( 99,000
)

 Accounts payable and other
 liabilities - Hotel

 331,000

 2,141,000

 Accounts payable and other
 liabilities

 ( 1,348,000
)

 1,411,000

 payable related party

 5,119,000

 4,232,000

 Net cash (used in) provided
 by operating activities

 ( 2,148,000
)

 108,000

 Cash flows from investing
 activities:

 Payments
 for hotel furniture, equipment and building improvements

 ( 2,252,000
)

 ( 4,078,000
)

 Net cash used in investing
 activities

 ( 2,252,000
)

 ( 4,078,000
)

 Cash flows from financing
 activities:

 Issuance costs from refinance

 ( 2,106,000
)

 ( 1,477,000
)

 Proceeds from mortgage
 note payable

 78,800,000

 4,500,000

 Proceeds from related party
 note payable

 11,615,000

 10,793,000

 Payments
 of mortgage and finance leases

 ( 76,962,000
)

 ( 10,277,000
)

 Net cash provided by financing
 activities

 11,347,000

 3,539,000

 Net increase (decrease)
 in cash, cash equivalents, and restricted cash

 6,947,000

 ( 431,000
)

 Cash, cash equivalents,
 and restricted cash at the beginning of the period

 4,775,000

 5,206,000

 Cash, cash equivalents,
 and restricted cash at the end of the period

 $
 11,722,000

 $
 4,775,000

 Supplemental information:

 paid

 $
 8,519,000

 $
 4,837,000

 Taxes
 paid

 $
 31,000

 $
 1,000

 The
Company had cash and cash equivalents of $ 4,470,000 and $ 3,511,000 as of June 30, 2025 and 2024, respectively. The Company had restricted
cash of $ 7,252,000 and $ 1,264,000 as of June 30, 2025 and 2024, respectively.

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

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 JUNE
30, 2025

 NOTE
1 - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

 Description
of Business

 Portsmouth's
primary business was conducted through its general and limited partnership interest in Justice Investors Limited Partnership, a California
limited partnership ("Justice" or the "Partnership"). Effective July 15, 2021, Portsmouth completed the purchase
of 100 % of the limited partnership interest of Justice through the acquisition of the remaining 0.7 % non-controlling interest. Effective
December 23, 2021, the partnership was dissolved. The financial statements of Justice were consolidated with those of the Company.

 Prior
to its dissolution effective December 23, 2021, Justice owned and operated 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 through its subsidiaries Justice Operating Company, LLC ("Operating") and Justice
Mezzanine Company, LLC ("Mezzanine"). Mezzanine was a wholly owned subsidiary of the Partnership; Operating was a wholly
owned subsidiary of Mezzanine. Effective December 23, 2021, Portsmouth replaced Justice as the single member 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 a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC
("Hilton") through January 31, 2030.

 In
connection with the refinancing of the Hotel on March 28, 2025, the Company formed Justice Pledgor, LLC, a Delaware limited liability
company ("Pledgor"), which became the sole member of Operating. Mezzanine is the sole member of Pledgor.

entered into a hotel management agreement ("HMA") with Aimbridge Hospitality ("Aimbridge") to manage the Hotel,
along with its five-level parking garage, with an effective date of February 3, 2017. The term of the management agreement is for an
initial period of ten years commencing on the February 3, 2017 date and automatically renews for successive one (1) year periods, not
to exceed five years in the aggregate, subject to certain conditions. Under the terms of the HMA, base management fee ("Basic Fee")
payable to Aimbridge is one and seven-tenths percent ( 1.70 %) of total Hotel revenue. In addition to the Basic Fee, Aimbridge is entitled
to an annual incentive fee for each fiscal year equal to ten percent ( 10 %) of the amount by which Gross Operating Profit in the current
fiscal year exceeds the previous fiscal year's Gross Operating Profit.

 As
of June 30, 2025, The InterGroup Corporation ("InterGroup"), a public company, owns approximately 75.9 % of the outstanding
common shares of Portsmouth. As of June 30, 2025, the Company's Chairman of the Board and Chief Executive Officer, John V. Winfield,
owns approximately 2.5 % of the outstanding common shares of the Company. Mr. Winfield also serves as the President, Chairman of the Board
and Chief Executive Officer of InterGroup and owns approximately 70.1 % of the outstanding common shares of InterGroup as of June 30,
2025.

 Principles
of Consolidation

 The
consolidated financial statements include the accounts of the Company and Justice up to its dissolution in December 2021, at which time
all subsidiaries of Justice became subsidiaries of Portsmouth as the Company replaced Justice as the single member of Justice's
subsidiaries where appropriate. All significant inter-company transactions and balances have been eliminated.

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 the 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 Company 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, 2025 and 2024.

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.

 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, 2025 and 2024, the Company does no t 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.

Receivable - Hotel, Net

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. The net accounts receivable balance on July 1, 2023 was $ 418,000. As of June 30, 2025 and
2024, the Company has gross accounts receivable of $ 383,000 and $ 519,000 respectively, and allowance for doubtful accounts of $ 9,000
and $ 0, respectively. The Company extends unsecured credit to its customers but mitigates the associated credit risk by performing ongoing
credit evaluations of its customers.

 Other
Assets

 Other
assets include prepaid insurance, prepaid expenses, other investments, net, and other miscellaneous assets.

 Income
Taxes

 The
Company consolidated Justice ("Hotel") for financial reporting purposes up to its dissolution in December 2021 and was not
taxed on its non-controlling interest in the Hotel. Effective July 15, 2021, the Company became the owner of 100% of Justice and began
to include all the Hotel's income and expense accounts into its income taxes calculations going forward. The income tax expense
was $ 1,000 and $ 1,000, for the years ending June 30, 2025 and June 30, 2024, respectively, primarily due to the company's full
valuation allowance.

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.

 The
Company accounts for its uncertain tax positions pursuant to ASC 740, Income Taxes. This guidance prescribes a recognition threshold
and measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax
return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities,
a benefit will be recognized at the largest amount that it believes is cumulatively greater than 50% likely to be realized. A table summarizing
the Company's uncertain positions is presented in the income tax footnote section. Further, any interest or penalties associated
with uncertain tax positions shall be recorded in the income tax provision. As of June 30, 2025 and 2024, no interest and penalties were
recorded.

 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.

Payable and Other Liabilities

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 –inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 Level
2 –inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs
that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 Level
3 –inputs to the valuation methodology are unobservable and significant to the fair value.

Rate Cap

 The
Company uses interest rate cap agreements to manage exposure to increases in interest rates on its variable-rate debt obligations. Interest
rate cap premiums are recorded on the balance sheet at fair value on the date the agreements are executed and are subsequently remeasured
to fair value at each reporting date.

 All
changes in fair value are recognized in earnings within other income (expense). The Company is required, pursuant to certain debt agreements,
to maintain interest rate caps for specified periods or replace them upon expiration.

 Revenue
Recognition

 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 are typically satisfied as the good or service is transferred to the hotel guest, which
 is generally when the room stay occurs.

 Noncancelable
 room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time
 and satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation.

 Other
 ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered
 separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest.

 Components
 of package reservations for which each component could be sold separately to other hotel guests are considered separate performance
 obligations and are satisfied as set forth above.

 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. See Note 3 – Revenue.

 Advertising
Costs

 Advertising
costs are expensed as incurred and are included in Hotel operating expenses in the consolidated statements of operations. Advertising
costs were $ 263,000 and $ 150,000 for the years ended June 30, 2025 and 2024, respectively.

 Basic
and Diluted Loss per Share

 Basic
loss per share is calculated based upon the weighted average number of common shares outstanding during each fiscal year. As of June
30, 2025 and 2024, the Company did not have any potentially dilutive securities outstanding.

 Use
of Estimates

 The
preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions regarding certain types of
assets, liabilities, revenues, and expenses. Actual results may differ from those estimates. Management considers new evidence, both
positive and negative, that could affect its view of the future realization of deferred tax assets and when appropriate, records tax
valuation allowances based on that evidence and estimates. As of June 30, 2025 based on taxable income that may be available under tax
law the deferred taxed asset is not more likely than not to be realized.

 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 statements of operations.

 Recently
Issued and Adopted Accounting Pronouncements

 In
November 2023, the FASB issued ASU No 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures"
("ASU 202307"). We adopted ASU 2023-07 effective July 1, 2024 (fiscal 2025). The amendments expanded annual segment disclosure
(including significant segment expenses and CODM measures) and will expand interim segment disclosures beginning in fiscal 2026. Adoption
did not have a material impact on our consolidated financial statements, but resulted in enhanced segment disclosures.

 In
December 2023, the FASB issued ASU No 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU
2023-09"). ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 (our fiscal 2026). We expect the standard
to expand our income tax rate reconciliation and cash taxes paid disclosures; we do not expect a material impact on our consolidated
financial position or results of operations.

 Going
Concern

 The
consolidated financial statements have been prepared in accordance with U.S. GAAP and on a going concern basis, which assumes the Company
will continue to operate in the normal course of business. Management evaluated the Company's ability to continue as a going concern
under ASC 205-40 for the twelve months following the issuance of these financial statements.

 In
prior filings (including the June 30, 2024 Form 10-K and subsequent Form 10-Q), maturities of the Company's senior and mezzanine
loans on January 1, 2024, together with related default notices, raised substantial doubt about the Company's ability to continue
as a going concern.

 On
March 28, 2025, the Company completed a comprehensive refinancing of its senior mortgage and a modification of its mezzanine debt, resulting
in extended maturities, favorable interest terms, and improved covenant compliance. Since closing, the Company has remained current on
all required debt service and continued property enhancements to support the Hotel's competitive positioning (including renovation
of additional guest rooms returned to inventory). In addition, in March 2025 and May 2025, the related-party facility with The InterGroup
Corporation was amended to increase borrowing capacity to $40,000,000, extend maturity to July 31, 2027, and reduce the rate to 9%, providing
a contingency source of liquidity without required monthly principal or interest payments prior to maturity.

 Management
evaluated the Company's ability to continue as a going concern for the twelve months following the issuance of these financial
statements and concluded that the conditions and events that initially raised substantial doubt have been alleviated and that substantial
doubt does not exist as of issuance. The financial statements are therefore prepared on a going-concern basis.

 While
management believes available liquidity and cash generation from operations are sufficient for near-term needs, uncertainties related
to the San Francisco hospitality market and broader macroeconomic factors—including potential pressure on occupancy and RevPAR—could
adversely affect liquidity if results underperform forecasts. Management will continue to monitor conditions and adjust operations as
necessary. See MD&A — Going Concern — Portsmouth for additional discussion.

 NOTE
2 – LIQUIDITY

 Historically,
the Company has relied primarily on cash flows generated from operations at its hotel property, the Hilton San Francisco Financial District
(the "Hotel"), as its primary source of liquidity. However, the pace of recovery in the San Francisco hospitality market
remains slower than anticipated due to several factors, including a sustained decline in business travel driven by remote work trends,
as well as broader municipal challenges such as safety concerns, homelessness, and increased crime. These conditions have limited demand
in key customer segments and shifted the Hotel's revenue base toward lower-yielding leisure travel.

 As
a result, the Company experienced net cash used in operating activities of $ 2,148,000 as of June 30, 2025. In response to ongoing market
pressures, the Company has adopted several capital preservation initiatives, including deferral of non-essential capital projects, temporary
suspension of certain Hotel services, renegotiation of vendor agreements, and reduction of controllable operating expenses. During the
same period, the Company continued to invest in property enhancements, incurring capital expenditure of $ 2,252,000 including the renovation
of 14 additional guest rooms that had been converted from administrative offices to return them to inventory.

 As
of June 30, 2025, the Company had:

 Cash
 and cash equivalents of $ 4,470,000 (compared to $ 3,511,000 as of June 30, 2024),

 Restricted
 cash of $ 7,252,000 (compared to $ 1,264,000 as of June 30, 2024), and

 Marketable
 securities, net of margin balances, of $ 127,000 (compared to $ 209,000 as of June 30, 2024).

 These
securities are considered liquid and available for short-term needs.

Party Financing

 To
supplement its liquidity position, the Company maintains access to an unsecured loan facility with its parent company, The InterGroup
Corporation ("InterGroup"), a related party. The initial facility, dated July 2, 2014, has undergone several amendments.

 In
March 2025, the facility was amended to:

 Increase
 the available borrowing capacity to $ 40,000,000, and

 Extend
 the maturity date to July 31, 2027.

 In
May 2025, the facility was amended to:

 Reduction
 of interest rate from 12 % to 9 %.

the year ended June 30, 2025, the Company borrowed an additional $ 11,615,000 under this facility. As of June 30, 2025, the outstanding
loan balance was $ 38,108,000, with no principal repayments made to date. Principal and accrued interest are due in full at maturity;
no monthly principal or interest payments are required prior to that date.

 To
further enhance liquidity flexibility, the Company may consider amending its by-laws to authorize the issuance of additional shares for
potential equity capital raises, should public market conditions permit.

 Liquidity
Outlook

 The
Company remains current on all debt service obligations, and management's forecasts indicate adequate liquidity for the twelve-month
period following the issuance of these financial statements.

 Forward-looking
risks remain primarily tied to the performance of the San Francisco hospitality market, including:

 The
 pace of recovery in business travel,

 Competitive
 dynamics among local hotels,

 Broader
 municipal issues affecting the city's perception among travelers, and

 Potential
 impacts from macroeconomic trends on leisure travel demand.

 Management
will continue to monitor these market-specific conditions and adjust operations, capital allocation, and marketing strategies to maintain
the Hotel's competitive position.

 The
following table provides a summary as of June 30, 2025, of the Company's material financial obligations which also includes interest:

 SCHEDULE
OF FINANCIAL OBLIGATIONS INCLUDING INTEREST PAYMENTS

 Year

 Year

 Year

 Year

 Year

 Total

 2026

 2027

 2028

 2029

 2030

 Thereafter

 Mortgage notes payable

 $

 $
 -

 $

 $
 -

 $
 -

 $
 -

 $
 -

 Hilton/Aimbridge other notes payable

 1,979,000

 567,000

 463,000

 -

 Related party notes payable

 -

 -

 -

 -

 -

 Interest mortgage notes payable

 19,693,000

 8,916,000

 10,777,000

 -

 -

 -

 -

 Interest related party
 notes payable

 17,053,000

 4,580,000

 4,573,000

 7,900,000

 -

 -

 -

 Total

 $
 180,133,000

 $
 14,063,000

 $
 119,113,000

 $
 46,325,000

 $

 $

 $
 -

Notes Payable

entered into a $ 67,000,000 Mortgage Loan Agreement with Prime. The loan bears interest at SOFR + 4.75%, with a SOFR cap of 4.50%, and
is interest-only through maturity. Matures April 9, 2027, with three one-year extension options, subject to satisfaction of financial
and operational covenants. The Interest Rate Cap caps Term SOFR at 4.50 % and has a notional amount equal to or greater than the outstanding
principal balance of the loan. The Company paid a premium of approximately $ 136,000 for the cap at inception. The loan is secured by
the Hotel. Mezzanine executed a modified Mezzanine Loan Agreement with CRED REIT Holdco LLC for a principal amount of $ 36,300,000. The
loan accrues interest at a fixed rate of 7.25 % per annum, on matching maturity and extension terms to the senior loan. The loan is secured
by Mezzanine's membership interest in Operating.

Party Notes Payable

and accrued interest are due in full at maturity; no monthly principal or interest payments are required prior.

 NOTE
3 - REVENUE

 The
following table presents our revenue disaggregated by revenue streams:

 SCHEDULE OF REVENUE DISAGGREGATION BY REVENUE STREAMS

 2025

 2024

 Hotel revenues:

 Hotel rooms

 $
 39,648,000

 $
 35,239,000

 Food and beverage

 2,862,000

 3,213,000

 Garage

 3,214,000

 2,988,000

 Other
 operating departments

 639,000

 446,000

 Total Hotel revenue

 $

 $

 Contract
Assets and Liabilities

 The
Company does not have any material contract assets as of June 30, 2025 and 2024, 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.

 The
Company records 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- Hotel on our consolidated balance sheets and had a balance of $ 370,000 at July 1, 2024.
Contract liabilities were $ 505,000 as of June 30, 2025. The increase as of June 30, 2025, was primarily driven by an increase in advance
deposits received from customers for services to be performed after June 30, 2025.

 Contract
liabilities were $ 370,000 as of June 30, 2024 compared to $ 290,000 as of June 30, 2023. The increase for the twelve months ended June
30, 2024 was primarily driven by an increase in advance deposits received from customers for services to be performed after June 30,
2024.

 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.

 NOTE
4 – INVESTMENT IN HOTEL, NET

in Hotel consisted of the following as of:

 SCHEDULE OF INVESTMENT, NET

 Accumulated

 Net Book

 June 30, 2025

 Cost

 Depreciation

 Value

 Land

 $
 1,124,000

 $
 -

 $
 1,124,000

 Finance lease ROU assets

 1,805,000

 ( 1,665,000
)

 140,000

 Furniture and equipment

 41,195,000

 ( 33,248,000
)

 7,947,000

 Building and improvements

 60,136,000

 ( 35,564,000
)

 24,572,000

 Investment in Hotel,
 net

 $
 104,260,000

 $
 ( 70,477,000
)

 $
 33,783,000

 Accumulated

 Net Book

 June 30, 2024

 Cost

 Depreciation

 Value

 Land

 $
 1,124,000

 $
 -

 $
 1,124,000

 Finance lease ROU assets

 1,805,000

 ( 1,521,000
)

 284,000

 Furniture and equipment

 40,310,000

 ( 31,396,000
)

 8,914,000

 Building and improvements

 58,769,000

 ( 34,026,000
)

 24,743,000

 Investment in Hotel,
 net

 $
 102,008,000

 $
 ( 66,943,000
)

 $
 35,065,000

 Finance
lease ROU assets, furniture and equipment are stated at cost, depreciated on a straight-line basis over their useful lives ranging from
 3 to 7 years, or amortized over the life of the lease, as applicable. Building and improvements are stated at cost, depreciated on a
straight-line basis over their useful lives ranging from 15 to 39 years.

 Depreciation
and amortization expense for the year ended June 30, 2025, and 2024 was $ 3,534,000 and $ 3,394,000, respectively.

 There
have been no material changes to these balances or related accounting policies during the periods presented.

 NOTE
5 - 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, with the objective of providing financial
benefit to its shareholders through income and/or capital gain.

 As
of June 30, 2025 and 2024, all of the Company's marketable securities were classified as trading securities. The change in the
unrealized gains and losses on these investments is included in earnings. Trading securities are summarized as follows:

 SCHEDULE OF TRADING SECURITIES

 Cost

 Gross
 Unrealized Gain

 Gross
 Unrealized Loss

 Net
 Unrealized Gain

 Fair

 Value

 As of June 30, 2025

 Corporate

 Equities

 $
 112,000

 $
 15,000

 $
 -

 $
 15,000

 $

 As of June 30, 2024

 Corporate

 Equities

 $
 207,000

 $
 38,000

 $
 ( 36,000
)

 $
 2,000

 $

 As
of June 30, 2025 and 2024, the Company had $ 15,000 and $ 2,000, respectively of unrealized gain related to securities held at those dates.

 Net
(loss) gain on marketable securities in the consolidated statements of operations is comprised of realized and unrealized gains and losses.
Below is the breakdown of the two components for the years ended June 30, 2025 and 2024, respectively.

 SCHEDULE OF NET (LOSS) GAIN ON MARKETABLE SECURITIES COMPRISING OF REALIZED AND UNREALIZED LOSSES

 2025

 2024

 Realized loss on marketable securities

 $
 ( 10,000
)

 $
 ( 39,000
)

 Unrealized gain (loss)
 on marketable securities

 13,000

 ( 83,000
)

 Net gain (loss) on marketable

 $
 3,000

 $
 ( 122,000
)

 Gain
and losses on marketable securities may continue to fluctuate significantly from period to period, and past results are not necessarily
indicative of future performance. There have been no material changes to these balances or related accounting policies during the periods
presented.

 NOTE
6 - FAIR VALUE MEASUREMENTS

 The
carrying values of the Company's financial instruments that are not measured at fair value on a recurring basis approximate fair
value due to their short maturities (including 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 (such as other notes payable and mortgage notes
payable). Management has determined that there are no material differences between the carrying amounts and estimated fair values of
these financial instruments as of June 30, 2025 and 2024.

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

 SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS

 % of Total

 As of June 30, 2025

 Industry
 Group

 Fair
 Value

 REITs and
 real estate companies

 $

 100.0
 %

 % of Total

 As of June 30, 2024

 Industry
 Group

 Fair
 Value

 REITs and real estate companies

 $
 202,000

 96.7
 %

 Basic materials

 7,000

 3.3
 %

 in marketable securities

 $

 100.0
 %

 The
fair values of investments in marketable securities are classified as Level 1 within the fair value hierarchy and are determined using
quoted prices in active markets for identical assets. Specifically, the fair value of each security is based on the most recently traded
price at the balance sheet date.

 On
March 31, 2025, the Company, through its affiliate Justice Operating Company, LLC, entered into an interest rate cap agreement (the "Interest
Rate Cap") with Goldman Sachs Bank USA. The agreement was executed in connection with a variable-rate mortgage loan and is intended
to economically limit the Company's exposure to increases in Term SOFR. The Interest Rate Cap caps Term SOFR at 4.50 % and has a
notional amount equal to or greater than the outstanding principal balance of the loan. The Company paid a premium of approximately $ 136,000
for the cap at inception. Changes in the fair value of the Interest Rate Cap are recorded in Other Income (Expense) within the consolidated
statements of operations.

 The
Interest Rate Cap is not designated as a hedging instrument under ASC 815 and is therefore accounted for at fair value, with changes
in fair value recognized in earnings each reporting period. The cap is classified as a Level 2 financial instrument under the fair value
hierarchy established by ASC 820, as its valuation is based on observable market inputs including interest rate curves and volatility
assumptions obtained from a third-party pricing service.

 The
following table summarizes the fair value of the derivative instrument as of June 30, 2025:

 SCHEDULE
OF DERIVATIVE INSTRUMENT

 Derivative
 Type

 Notional
 Amount

 Balance
 Sheet Classification

 Fair
 Value

 Fair
 Value Hierarchy

 Interest Rate Cap

 $
 67,000,000

 Other
 Assets

 $
 52,000

 Level

 There
have been no material changes to the Company's fair value measurement methodologies or classification of instruments during the
periods presented.

 NOTE
7 – OTHER ASSETS

 Other
assets consist of the following as of June 30:

 SCHEDULE OF OTHER ASSETS

 2025

 2024

 Inventory - Hotel

 $
 42,000

 $
 27,000

 Prepaid expenses

 572,000

 540,000

 Miscellaneous assets

 277,000

 267,000

 Total other assets

 $
 891,000

 $
 834,000

 There
have been no material changes in the nature or classification of other assets during the periods presented.

 NOTE
8 – RELATED PARTY AND OTHER FINANCING TRANSACTIONS

 The
following summarizes the balances of related party and other notes payable as of June 30, 2025 and 2024, respectively.

 SCHEDULE OF RELATED PARTY AND OTHER NOTES PAYABLE

 As of June
 30,

 2025

 2024

 Related party note payable - InterGroup

 $

 $
 26,493,000

 Other note payable - Hilton

 1,583,000

 1,742,000

 Other note payable - Aimbridge

 396,000

 646,000

 Total related party
 and other notes payable

 $
 40,087,000

 $
 28,881,000

 Related party
 and other notes payable

 $
 40,087,000

 $
 28,881,000

 On
July 2, 2014, the Partnership secured an unsecured loan from InterGroup in the principal amount of $ 4,250,000, bearing a fixed annual
interest rate of 12 %, with no monthly principal or interest payments required prior to maturity. InterGroup also received a loan fee
equal to 3 % of the principal. The loan was prepayable at any time without penalty and was subsequently extended through July 31, 2023.

 On
December 16, 2020, the Partnership and InterGroup executed a loan modification agreement that increased the borrowing capacity, as needed,
to a maximum of $ 10,000,000. Subsequently, on December 31, 2021, Portsmouth and InterGroup entered into a separate loan modification
agreement, raising Portsmouth's borrowing limit to $ 16,000,000. Following the dissolution of the Partnership in December 2021,
Portsmouth assumed the outstanding loan obligation to InterGroup in the amount of $ 11,350,000.

 In
July 2023, the loan's maturity date was extended to July 31, 2025, and the available borrowing capacity was increased to $ 20,000,000.
In connection with this increase, the Company agreed to pay InterGroup a 0.5 % loan modification fee on the additional $ 10,000,000.

 In
March 2024, another amendment raised the available borrowing limit to $ 30,000,000, subject again to a 0.5 % modification fee on the $ 10,000,000
increase.

 In
March 2025, another amendment was executed, increasing Portsmouth's borrowing capacity to $ 40,000,000 and extending the maturity
date to July 31, 2027. In May 2025, the parties agreed to reduce the loan's interest rate from 12 % to 9 %. Principal and accrued
interest on the InterGroup loan are payable in full at maturity; no monthly principal or interest payments are required prior to that
date. During the fiscal years ended June 30, 2025, and 2024, InterGroup advanced $ 11,615,000 and $ 10,793,000, respectively, to the Hotel
to support its operations. As of June 30, 2025, and 2024, the amounts owed to InterGroup totaled $ 38,108,000 and $ 26,493,000, respectively.
To date, the Company has not made any principal repayments or this note payable.

 The
Company's Audit Committee and Board of Directors reviewed and approved the related party loan agreements with InterGroup in accordance
with its related party transaction policy.

 The
Company may consider amending its by-laws to increase authorized shares and issue equity in public markets if needed, a measure that
would be pursued as part of broader liquidity planning.

 Note
payable to Hilton (Franchisor) is a self-exhausting, interest free development incentive note which is reduced by approximately $ 317,000
annually through 2030 by Hilton if the Hotel remains a franchisee under the Hilton brand.

 On
February 1, 2017, Operating entered into a Hotel Management Agreement ("HMA") with Aimbridge to manage the Hotel, with an
effective takeover date of February 3, 2017. The term of the HMA is for an initial period of 10 years and automatically renews for up
to five additional years in aggregate, subject to certain conditions. The HMA also provides for Aimbridge 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 anniversary of the takeover date. The unamortized portion of the key money in the amount of $ 396,000 and $ 646,000 at June 30,
2025 and 2024, respectively, is included in other notes payable in the consolidated balance sheets.

 This
related party financing arrangement, in conjunction with the successful refinancing discussed in Note 9, was a key factor in management's
conclusion – disclosed in Note 2 – that there is no longer substantial doubt about the Company's ability to continue
as a going concern.

 Future
minimum principal payments for all related party and other financing transactions are as follows:

 SCHEDULE OF FUTURE MINIMUM PRINCIPAL PAYMENTS

 For the years ending June 30,

 2026

 $
 567,000

 2027

 38,571,000

 2028

 2029

 2030

 Thereafter

 -

 Long
 term debt

 $
 40,087,000

 As
of June 30, 2025 and 2024, the Company had accounts payable to related party of $ 16,634,000 and $ 11,515,000, respectively. These are
amounts due to InterGroup and represent accrued interests and certain shared costs and expenses, primarily general and administrative
expenses, rent, insurance, and other expenses.

 The
Company's Board of Directors is currently comprised of directors John V. Winfield, William J. Nance, John C. Love, Yvonne Murphy,
and Steve Grunwald. All the Company's directors also serve as directors of InterGroup. The Company's director and Chairman
of the Audit Committee, William J. Nance.

 John
V. Winfield serves as Chief Executive Officer and Chairman of the Company and InterGroup. Effective June 2016, Mr. Winfield became the
Managing Director of Justice till its dissolution in December 2021. Depending on certain market conditions and various risk factors,
the Chief Executive Officer 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 InterGroup, at risk in connection
with investment decisions made on behalf of the Company.

 On
May 24, 2021, John V. Winfield resigned effective immediately as the Company's President and the Company's Board of Directors
elected David C. Gonzalez as the Company's new President, effective as of May 24, 2021. Mr. Gonzalez serves as Chief Operating
Officer of InterGroup and is an advisor of the Executive Strategic Real Estate and Securities Investment Committee of InterGroup and
Portsmouth.

 NOTE
9 – MORTGAGE NOTES PAYABLE

 A.
Mortgage and Mezzanine Loan History

 In
December 2013, Justice Investors Limited Partnership ("Justice"), then a consolidated subsidiary of Portsmouth Square, Inc.
(the "Company"), obtained a $ 97,000,000 mortgage loan and a $ 20,000,000 mezzanine loan to fund the redemption of limited
partnership interests and repay a prior $ 42,940,000 mortgage loan. The mortgage loan was secured by the Company's principal asset,
the Hilton San Francisco Financial District (the "Hotel"), and bore interest at 5.275 % per annum. The loan required interest-only
payments through January 2017 and began amortizing thereafter on a 30-year schedule, maturing on January 1, 2024. The mortgage loan was
guaranteed in part by Portsmouth.

 The
mezzanine loan, originally bearing interest at 9.75 % per annum and maturing concurrently with the senior loan, was secured by the membership
interests of Justice Operating Company, LLC ("Operating"), held by Justice Mezzanine Company, LLC ("Mezzanine"),
and was subordinated to the mortgage debt. The mezzanine loan was refinanced in July 2019 through a new agreement with CRED REIT Holdco
LLC ("Mezzanine Lender") in the amount of $ 20,000,000, at a reduced fixed interest rate of 7.25 %, also maturing on January
1, 2024.

 As
of June 30, 2024, the outstanding mortgage loan balance was $ 76,962,000. As of December 31, 2024, the outstanding balance was $ 75,789,000.

 B.
Forbearance Agreements and Defaults

 Due
to the maturity of both loans on January 1, 2024, and the absence of full repayment by that date, the Company negotiated forbearance
agreements with both lenders on April 29, 2024, as discussed in Note 2 – Liquidity.

Loan Forbearance Agreement (U.S. Bank and others, the "Mortgage Lender"):

 Provided
 forbearance through January 1, 2025, assuming no termination event.

 Required
 a 10 % principal paydown of $ 8,590,000.

 Included
 accrual of 4 % default interest, retroactive to January 1, 2024, payable upon final maturity
 or prepayment.

 Included
 a 1 % forbearance fee of $ 859,000, paid at execution.

 continued timely monthly payments during the forbearance period.

 Guaranteed
 by Portsmouth.

Loan Forbearance Agreement (CRED REIT Holdco LLC):

 Provided
 forbearance through January 1, 2025, contingent on no termination event.

 Lender advanced $ 4.5 million to cover the senior loan principal paydown.

 Required
 4 % default interest accrual and a 1 % forbearance fee ($ 245,000), both payable at final maturity
 or prepayment.

 No
 payments were required during the forbearance period.

 Guaranteed
 by Portsmouth.

 Both
agreements contained customary covenants, events of default, and representations and warranties. On January 3, 2025, the Company received
a Notice of Termination from the Mortgage Lender, citing a termination event for failure to repay the debt by the forbearance expiration.
On January 14, 2025, the Mezzanine Lender issued a Notice of Default, asserting its rights to pursue all remedies under the agreement.

 C.
Debt Refinancing Completed on March 28, 2025

 On
January 21, 2025, the Company executed a non-binding term sheet with Prime Finance ("Prime") for a new senior loan. On March
28, 2025, the Company closed on both a senior mortgage loan and modified mezzanine loan (collectively, the "Loan Agreements"),
fully retiring the prior debt with U.S. Bank and CRED REIT Holdco LLC.

 Loan: Operating entered into a $ 67,000,000 Mortgage Loan Agreement with Prime. The loan bears
 interest at SOFR + 4.75%, with a SOFR cap of 4.50%, and is interest-only through maturity.
 Matures April 9, 2027, with three one-year extension options, subject to satisfaction of
 financial and operational covenants. The loan is secured by the Hotel and required the purchase
 of an interest rate cap at inception, for which the Company paid a premium of approximately
 $ 136,000.

 Loan: Mezzanine executed a modified Mezzanine Loan Agreement with CRED REIT Holdco LLC for
 a principal amount of $ 36,300,000 at a fixed rate of 7.25 % per annum, on matching maturity
 and extension terms to the senior loan. The loan modifications were material in nature and
 therefore the transaction under ASC 470-50 accounted for as an extinguishment. The loan is
 secured by Mezzanine's membership interest in Operating. The lender agreed to waive
 a forbearance fee of $ 245,000 and default interest of approximately $ 1.17 million, for a
 total waiver of $ 1.416 million. The waived amounts were recorded as a gain on extinguishment
 of debt.

continues to provide a limited guaranty in connection with both facilities. The Company is also subject to customary covenants, including
financial ratios and affirmative obligations.

 This
successful refinancing, along with the mezzanine loan modification, was a key factor in management's conclusion – discussed
in Note 2 – that there is no longer substantial doubt about the Company's ability to continue as a going concern.

 D.
Related Party Guarantee – InterGroup

 Under
the March 28, 2025 refinancing, guaranties tied to the prior loan structures were terminated. The current senior mortgage and amended
mezzanine facilities are non-recourse subject to customary limited carve-outs and performance undertakings at the Portsmouth/operating-entity
level. InterGroup is not a guarantor of these 2025 facilities.

 E.
DSCR and Lockbox Arrangements

has not maintained compliance with the required Debt Service Coverage Ratio ("DSCR") under both the original and refinanced
loans. Operating did not maintain compliance with the required Debt Service Coverage Ratio (DSCR") under the original December
2013 loan and is subject to ongoing DSCR requirements under the refinanced loans. Under the March 28, 2025, refinancing, a Cash Management
Agreement with Prime Finance ("Lender") and Wells Fargo Bank, N.A. ("Cash Management Bank") requires that all
Hotel cash receipts be deposited into a lender-controlled account. This lockbox arrangement remains in effect until DSCR conditions are
met for two consecutive quarters. Funds are disbursed for approved operating expenses, debt service (including senior interest-only),
and required reserves (insurance, real estate taxes, and furniture, fixtures and equipment) in accordance with lender-approved budgets.
Excess cash, if any, is held in lender-controlled accounts for future interest-only payments to the Mezzanine lender, subject to certain
conditions under the loan agreements with both lenders.

 F.
Governance and Related Party Disclosure

 All
members of Portsmouth's Board of Directors — John V. Winfield, William J. Nance, John C. Love, Yvonne Murphy, and Steve H.
Grunwald — also serve as directors of InterGroup. Mr. Winfield is Chairman of the Board and Chief Executive Officer of both Portsmouth
and InterGroup. He served as Managing Director of Justice until its dissolution in December 2021.

encourages investments by its CEO and InterGroup in the same companies in which Portsmouth invests, as such alignment of interests places
personal and affiliate capital at risk alongside Company capital.

 As
of June 30, 2025 and 2024, the Company had the following mortgages:

 SCHEDULE OF MORTGAGES

 June
 30, 2025

 Rate

 Origination
 Date

 Maturity
 Date

 $
 67,000,000

 SOFR (cap 4.50 %) plus 4.75 %

 March 28, 2025

 April 9, 2027

 36,300,000

 Fixed 7.25 %

 March 28, 2025

 April 9, 2027

 Mortgage notes payable - hotel

 ( 1,781,000
)

 Net debt issuance costs

 $
 101,519,000

 Total mortgage notes
 payable - Hotel

 June
 30, 2024

 Rate

 Origination
 Date

 Maturity
 Date

 $
 76,962,000

 Fixed 5.28 % plus 4 % default rate

 December 18, 2013

 January 1, 2025

 24,500,000

 Fixed 7.25 % plus 4 % default
 rate

 July 31, 2019

 January 1, 2025

 101,462,000

 Mortgage notes payable - hotel

 ( 679,000
)

 Net debt issuance costs

 $
 100,783,000

 Total mortgage notes
 payable - Hotel

 NOTE
10 – MANAGEMENT AGREEMENTS

entered into a hotel management agreement ("HMA") with Aimbridge Hospitality to manage the Hotel, along with its five-level
parking garage, with an effective date of February 3, 2017. The term of the management agreement is for an initial period of ten years
commencing on the February 3, 2017 date and automatically renews for successive one (1) year periods, not to exceed five years in the
aggregate, subject to certain conditions. Under the terms on the HMA, base management fee ("Basic Fee") payable to Aimbridge
is one and seven-tenths percent (1.70%) of total Hotel revenue. In addition to the Basic Fee, Aimbridge is entitled to an annual incentive
fee for each fiscal year equal to ten percent (10%) of the amount by which Gross Operating Profit in the current fiscal year exceeds
the previous fiscal year's Gross Operating Profit.

 For
the fiscal years ended June 30, 2025 and 2024, hotel management fees were $ 783,000 and $ 706,000, respectively, and incentive fees of
$ 0, for both years, offset by key money amortization of $ 250,000 for both years, which are included in Hotel operating expenses in the
consolidated statements of operations. However, following discussions with Aimbridge regarding the impact of the COVID-19 pandemic on
incentive fee eligibility, the parties agreed that no incentive fees were payable for fiscal years 2019 through 2023. Specifically, Aimbridge
agreed to waive $ 1,030,134 in previously recorded incentive fees, and both parties established a performance threshold for future incentive
fee eligibility of $ 15,257,301 in earnings before interest, taxes, depreciation, and amortization ("EBITDA") which represents
the EBITDA in 2017 when Aimbridge began managing the Hotel. As a result, the company recorded a reduction in Hotel operating expenses
of $ 1,030,134 for the year ended June 30, 2025.

 See
also Note 8 – Related party and Other Financing Transactions for details on the key money incentive agreement with Aimbridge, and
Note 15 – Commitments and Contingencies for additional obligations under the HMA.

 NOTE
11 – CONCENTRATION OF CREDIT RISK

 As
of June 30, 2025 and 2024, all accounts receivables were related to Hotel customers. The Hotel had two customers that accounted for approximately
 88 %, or $ 237,000 of accounts receivable at June 30, 2025, and two customers that accounted for 98 %, or $ 307,000 of accounts receivable
at June 30, 2024.

 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 exceed the Federal Deposit Insurance Corporation ("FDIC")
or other federally insured limits. Any loss incurred from, or a lack of access to, such funds could have significant adverse impact on
the Company's financial condition, results of operations, and cash flows.

 NOTE
12 - INCOME TAXES

 The
provision for income tax (expense) benefit consists of the following:

 SCHEDULE OF PROVISION FOR INCOME TAX (EXPENSE) BENEFIT

 2025

 2024

 Federal

 Current tax expense

 $
 -

 $
 -

 tax expense

 -

 -

 Federal income tax benefit

 -

 -

 State

 Current tax
 expense

)

)

 tax expense

 -

 -

 State and local income
 tax benefit

)

)

 Income tax expense

 $
)

 $
)

 A
reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:

 SCHEDULE OF STATUTORY FEDERAL INCOME TAX RATE

 2025

 2024

 Statutory federal tax rate

 21.0
 %

 21.0
 %

 State income taxes, net of federal tax benefit

 8.8
 %

 8.8
 %

 Provision to return adjustment

 4.3
 %

 - 6.6
 %

 Valuation allowance

 - 31.1
 %

 - 22.5
 %

 Other

 - 3.0
 %

 - 0.7
 %

 Effective income tax rate reconciliation percentage

 0.0
 %

 0.0
 %

 The
components of the Company's deferred tax assets and (liabilities) as of June 30, 2025 and 2024 are as follows:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

 2025

 2024

 tax assets

 Net
 operating loss carryforward

 $
 14,822,000

 $
 14,359,000

 expense

 6,385,000

 5,157,000

 Accruals
 and reserves

 622,000

 596,000

 Depreciation

 13,877,000

 14,260,000

 party interest

 2,243,000

 -

 State
 tax credits

 165,000

 524,000

 Capital
 loss carryforward

 1,054,000

 1,333,000

 Other

 1,000

 111,000

 tax assets before valuation allowance

 39,169,000

 36,340,000

 Less
 Valuation allowance

 ( 39,169,000
)

 ( 36,340,000
)

 tax assets after valuation allowance

 -

 -

 tax liabilities

 State
 taxes

 -

 -

 Deferred Tax Liabilities

 -

 -

 Net
 deferred tax assets

 $
 -

 $
 -

 As
of June 30, 2025, the Company had net operating loss ("NOL") carryforwards of approximately $ 41,378,000 and $ 69,377,000 for
federal and state purposes, respectively. Of the $ 41,378,000 federal NOL carryforwards, $ 14,707,000 expire in varying amounts through
2037 and $ 26,671,000 of post-2017 NOLs can be carried forward indefinitely. Note that the post-2017 NOLs may only offset 80 % of future
taxable income. The Company had capital loss carryforwards of $ 5,539,000 for federal and state purposes. The capital losses begin to
expire in 2025 for both federal and state purposes. There are immaterial California state tax credits of $ 165,000 which expire in various
years.

 As
of June 30, 2024, the Company had net operating loss ("NOL") carryforwards of approximately $ 43,396,000 and $ 59,340,000 for
federal and state purposes, respectively. Of the $ 43,396,000 federal NOL carryforwards, $ 14,707,000 expire in varying amounts through
2037 and $ 26,833,000 of post-2017 NOLs can be carried forward indefinitely. Post-2017 NOLs may only offset 80 % of future taxable income.
The Company had capital loss carryforwards of $ 4,468,000 for federal and state purposes. The capital losses begin to expire in 2024 for
both federal and state purposes. There are immaterial California state tax credits of $ 524,000 which expire in various years.

 Assets
and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns where 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, 2025, it has been determined that the company had $ 1,665,000 of unrecognized tax benefits. No new uncertain tax positions
were identified this year.

 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, 2025, tax years beginning in fiscal year 2021 and 2020 remain open to examination by federal and state tax jurisdictions,
respectively, and are subject to the statute of limitations.

 Uncertain
Tax Positions

 The
Company regularly evaluates the likelihood of realizing the benefit from income tax positions that it has taken in various federal, state
and foreign filings by considering all relevant facts, circumstances and information available. If the Company determines it is more
likely than not that the position will be sustained, a benefit will be recognized at the largest amount that it believes is cumulatively
greater than 50% likely to be realized. The following table summarizes changes in the amount of the Company's unrecognized tax
benefits for uncertain tax positions:

 SCHEDULE OF UNRECOGNIZED TAX BENEFIT

 Unrecognized
 Tax Benefits at June 30, 2024

 $
 1,665,000

 Increase in tax positions
 taken

 -

 Decrease
 in tax positions taken

 -

 Unrecognized
 Tax Benefits at June 30, 2025

 $
 1,665,000

 As
of June 30, 2025 and June 30, 2024, the Company had unrecognized tax benefits, which would affect the effective tax rate if recognized.
The unrecognized tax benefits are not expected to reverse within the next 12 months. Interest and penalties related to income tax matters
are classified as a component of income tax expense. As of June 30, 2025 and June 30, 2024, no interest and penalties were recorded.

 NOTE
13 - SEGMENT INFORMATION

 The
Company operates in two reportable segments: (i) the operation of the Hotel ("Hotel Operations") and (ii) the investment
of its cash in marketable securities and other investments ("Investment Transactions"). These segments reflect the manner
in which management evaluates financial performance, allocates resources, and makes strategic decisions. Corporate expenses that are
not allocated to segments are presented in "Other."

 CODM
is a group of senior executives who collectively use segment income (loss) before interest expense, gain on extinguishment of debt, depreciation
and amortization, and income taxes as the primary measure reviewed for evaluating performance and allocating resources. The significant
expense categories regularly provided for Hotel operations include labor and related benefits, utilities, repairs and maintenance, marketing,
and general and administrative costs. These expenses are included in "Segment operating expenses" in the table below.

 Information
below represents the Company's reportable segments for the years ended June 30, 2025 and 2024, respectively. Segment loss from
Hotel Operations includes the results of the Hotel and its five-level parking garage. Loss from Investments Transactions include net
investment gain (loss), dividend and interest income, and investment-related expenses.

 SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

 As of and for the year

 Hotel

 ended June
 30, 2025

 Operations

 Transactions

 Other

 Total

 Revenues

 $

 $
 -

 $
 -

 $

 Operating expenses

 ( 31,593,000
)

 -

 -

 ( 31,593,000
)

 Utilities

 ( 3,210,000
)

 -

 -

 ( 3,210,000
)

 Real estate taxes

 ( 1,912,000
)

 -

 -

 ( 1,912,000
)

 Insurance

 ( 916,000
)

 -

 -

 ( 916,000
)

 General and administrative

 -

 -

 ( 1,327,000
)

 ( 1,327,000
)

 Segment income (loss)

 8,732,000

 -

 ( 1,327,000
)

 7,405,000

 Interest expense - mortgage

 ( 10,680,000
)

 -

 -

 ( 10,680,000
)

 Interest expense – related party

 ( 3,570,000
)

 -

 -

 ( 3,570,000
)

 Gain on extinguishment of debt

 1,416,000

 1,416,000

 Depreciation and amortization expense

 ( 3,534,000
)

 -

 -

 ( 3,534,000
)

 Loss from investments

 -

 ( 146,000
)

 -

 ( 146,000
)

 Income tax expense

 -

 -

)

)

 $
 ( 7,636,000
)

 $
 ( 146,000
)

 $
 ( 1,328,000
)

 $
)

 Total assets

 $
 46,621,000

 $

 $
 172,000

 $
 46,920,000

 As of and for the year

 Hotel

 ended June
 30, 2024

 Operations

 Transactions

 Other

 Total

 Revenues

 $

 $
 -

 $
 -

 $

 Operating expenses

 ( 30,363,000
)

 -

 -

 ( 30,363,000
)

 Utilities

 ( 3,069,000
)

 -

 -

 ( 3,069,000
)

 Real estate taxes

 ( 1,906,000
)

 -

 -

 ( 1,906,000
)

 Insurance

 ( 801,000
)

 -

 -

 ( 801,000
)

 General and administrative

 -

 -

 ( 1,682,000
)

 ( 1,682,000
)

 Segment income (loss)

 5,747,000

 -

 ( 1,682,000
)

 4,065,000

 Interest expense – mortgage

 ( 9,407,000
)

 -

 -

 ( 9,407,000
)

 Interest expense – related party

 ( 2,369,000
)

 -

 -

 ( 2,369,000
)

 Depreciation and amortization expense

 ( 3,394,000
)

 -

 -

 ( 3,394,000
)

 Loss from investments

 -

 ( 269,000
)

 -

 ( 269,000
)

 Income tax expense

 -

 -

)

)

 $
 ( 9,423,000
)

 $
 ( 269,000
)

 $
 ( 1,683,000
)

 $
)

 Total assets

 $
 40,858,000

 $

 $
 335,000

 $
 41,402,000

 NOTE
14 – RELATED PARTY TRANSACTIONS

Party Credit Facility – InterGroup

 The
Company maintains an unsecured revolving credit facility with its majority shareholder, The InterGroup Corporation ("InterGroup").
While the facility remains available, management is not currently relying on it to fund ongoing Hotel operations, which—following
the March 28, 2025 refinancing—have been self-funding from operating cash flows.

 Key
modifications include:

 December
 2021: Portsmouth assumed $ 11.35 million in outstanding debt upon the dissolution of Justice Investors L.P.

 July
 2023: Increased available borrowings to $ 20,000,000 and extended maturity to July 31, 2025 with a 0.5 % loan modification fee.

 March
 2024: Increased available borrowings to $ 30,000,000 with a 0.5 % loan modification fee

 March
 2025: Further increased available borrowing capacity to $ 40,000,000 and extended the maturity to July 31, 2027.

 May
 2025: Reduction of interest rate from 12 % to 9 %.

 The
facility now bears interest at 9 % and does not require monthly principal or interest payments; instead, accrued interest and principal
are payable in full at maturity. The loan may be prepaid at any time without penalty. During the fiscal year ended June 30, 2025, the
Company borrowed an additional $ 11,615,000 primarily to fund certain requirements due in connection with the Hotel's March 2025
refinancing, including senior mortgage principal paydown, the establishment of lender-required $ 5 million escrow reserves for potential
hotel operating shortfalls, and approximately $ 1.350 million in capital improvement reserves to complete the conversion of 14 guest rooms
that had been used as administrative offices for decades and are now being returned to guest inventory. As of June 30, 2025, the outstanding
balance was $ 38,108,000. The facility is maintained as a contingent source of liquidity; management currently expects to meet near-term
working capital needs from operating cash flows and cash on hand.

 The
Company may also consider amending its by-laws to increase authorized shares and pursue public capital market offerings if deemed necessary
to support liquidity.

 Certain
shared costs and expenses, primarily administrative expenses, rent and insurance are allocated between the Company and InterGroup based
on management's estimate of the pro rata utilization of resources. For the years ended June 30, 2025 and 2024, these expenses were
approximately $ 144,000 for each year.

 All
of the Company's Directors serve as directors of InterGroup.

 As
Chairman of the Executive Strategic Real Estate and Securities Investment Committee 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 President, Chief Executive Officer, and Chairman of InterGroup and oversees the investment activity of InterGroup.
Effective June 2016, Mr. Winfield became the Managing Director of Justice until its dissolution in December 2021. Depending on certain
market conditions and various risk factors, the Chief Executive Officer 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 InterGroup at risk in substantially the same manner
as the Company in connection with investment decisions made on behalf of the Company.

 NOTE
15 – COMMITMENTS AND CONTINGENCIES

 Cash
Management Agreement

 In
connection with the March 28, 2025 refinancing of the Hotel's senior mortgage, Justice Operating Company, LLC ("Operating")
entered into a Cash Management Agreement with Prime Finance (lender) and Wells Fargo Bank, N.A. (cash management bank). Under this agreement,
all Hotel receipts are deposited into a lender-controlled lockbox pursuant to a deposit account control agreement and swept to a cash
management account maintained for the benefit of the lender. The cash management bank maintains subaccounts (including debt service,
property tax, insurance, capital expenditure/FF&E, PIP, carry reserve, cash collateral, casualty/condemnation and security deposit
subaccounts). On each monthly payment date, funds are applied in a set priority: (i) tax reserve, (ii) insurance reserve, (iii) bank
fees, (iv) amounts due under the senior loan (interest and any other amounts due thereunder), (v) capital expenditure/FF&E reserve,
(vi) approved operating expenses and custodial funds, and (vii) all remaining "available cash" to the carry reserve during
the initial cash-management period or, thereafter, to the cash collateral subaccount, all in accordance with the loan documents. The
account must maintain a minimum balance of $ 5,000. While no event of default exists, interest on balances (other than tax and insurance
subaccounts) accrues to Operating; upon an event of default, the lender may direct application of all funds in any order to the debt.
The agreement contains customary subordination of bank set-off rights, indemnities, New York governing-law and jury-trial-waiver provisions.

 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, it 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 2025 and 2024
totaled approximately $ 3,529,000 and $ 2,967,000, respectively.

 Hotel
Employees

 The
hotel operations had 187 employees as of June 30, 2025. On February 3, 2017, Aimbridge assumed all labor union agreements as agent for
Hotel and Justice, and Justice provides all funding for all payroll and related costs. As of June 30, 2025, approximately 90 % 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 Aimbridge was a party to as agent for Hotel and Justice. CBA for Local 2 (Hotel and Restaurant
Employees) will expire on August 13, 2028. CBA for Local 856 (International Brotherhood of Teamsters) will expire on December 31, 2028.
CBA for Local 39 (Stationary Engineers) will expire in July 2030.

 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 Company and Aimbridge. The Company 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

Square, Inc., through its operating company Justice Investors Operating Company, LLC, a Delaware limited liability company (the "Company"),
is the owner of the real property located at 750 Kearny Street in San Francisco, currently improved with a 27 – story building
which houses a Hilton Hotel (the "Property"). The Property was purchased and improved pursuant to the terms of a series of
agreements with the City and County of San Francisco (the "City") in the early 1970's. The terms of the agreements
and subsequent approvals and permits included a condition by which the Company was required to construct an ornamental overhead pedestrian
bridge across Kearny Street, connecting the Property to a nearby City park and underground parking garage known as Portsmouth Square
(the "Bridge"). Included in the approval process was the City's issuance of a Major Encroachment Permit ("Permit")
allowing the Bridge to span over Kearney Street. As of May 24, 2022, the City has purported to revoke the Permit and on June 13, 2022,
has directed the Company to submit a general bridge removal and restoration plan (the "Plan") at the Company's expense.
The Company disputes the legality of the purported revocation of the Permit. The Company further disputes the existence of any legal
or contractual obligation to remove the Bridge at its expense. In particular, representatives of the Company participated in meetings
with the City on and at various times after August 1, 2019, to discuss a collaborative process for the possible removal of the Bridge.
Until the purported revocation of the Permit in 2022, the City representatives repeatedly and consistently promised and agreed that the
City will pay for the associated costs of any Bridge removal. Nevertheless, without waiving any rights, in an effort to understand all
of the available options, and to provide a response to the City's directives, the Company has engaged a Project Manager, a structural
engineering firm and an architect to advise on the development of a Plan for the Bridge removal, as well as the reconstruction of the
front of the Hilton Hotel. The Company has been working cooperatively with the City on the process for removal of the Bridge and its
related physical encroachments, including obtaining regulatory approvals and permits. The Company is currently in discussion with the
City regarding both the process and financial responsibility for the implementation of the Plan and reconstruction of the impacted portions
of the Hotel. Those discussions are expected to continue at least through the third quarter of 2025. A final Plan is currently not expected
to be completed and approved until the late fall or early winter of 2025, and permits for the Bridge demolition are unlikely to be obtained
until early 2026. In that timeline, the Bridge demolition is unlikely to proceed until March of 2026 at the earliest.

 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.

 NOTE
16 – SUBSEQUENT EVENTS

 The
Company evaluated subsequent events through the date that the accompanying financial statements were issued, and has determined that
no other material subsequent events that require adjustment to or disclosure in the financial statements exist through the date of this
filing, except as disclosed below.

 One
Big Beautiful Bill Act

 On
July 4, 2025, the One Big Beautiful Bill was enacted ("OBBBA"), introducing significant and wide-ranging changes to the U.S.
federal tax system. Significant components include restoration of 100 % accelerated tax depreciation on qualifying property including
expansion to cover qualified production property. Another major aspect incudes the return to immediate expensing of domestic
research and experimental expenditures ("R&E") which in some cases may include retroactive application back to 2021 for
businesses with gross receipts of less than $ 31 million or accelerated tax deductions of R&E that was previously capitalized for
larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business
tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.

 The
Company is currently assessing the potential impact of this legislation on its future financial position, results of operations, and
cash flows. In accordance with U.S. GAAP, the effects will be recognized in the period of enactment.

 Other
than the matter described above, the Company did not identify any subsequent events requiring recognition or additional disclosure.

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 There
were no disagreements with the Company's independent registered public accounting firm on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure during the periods covered by this report.

 Item
9A. Controls and Procedures.

 EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES

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

 MANAGEMENT'S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 As
required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, the Company's management is responsible
for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated
financial statements for external reporting purposes in accordance with U.S. GAAP. The Company's internal control over financial
reporting includes those policies and procedures that:

 1. pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the Company,

 2. provide
reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance
with U.S. GAAP, and that the Company's receipts and expenditures are being made only in accordance with authorizations of its management
and directors, and

 3. provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on the consolidated financial statements.

 Management,
including the Company's Chief Executive Officer and Principal Financial Officer, conducted an evaluation of the effectiveness of
its internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control Integrated Framework. Based on that evaluation under that framework, management concluded
that the Company's internal control over financial reporting was effective as of June 30, 2025.

 This
annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to attestation by the Company's independent registered
public accounting firm, pursuant to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that permit the Company
to provide only management's report in this Annual Report on Form 10-K.

 This
report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that
section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless
of any general incorporation language in such filing.

 CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING

 There
have been no changes in the Company's internal control over financial reporting during the fiscal year covered by this Annual Report
on Form 10-K that have materially affected, or are reasonably likely to materially affect, the Company's internal control over
financial reporting.

 Item
9B. Other Information.

the three months ended June 30, 2025, no director or officer, of the Company has adopted, modified or terminated any "Rule 10b5-1
trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Not
applicable.

 PART
III

 Item
10. Directors, Executive Officers and Corporate Governance

 The
following table sets forth certain information with respect to the Directors and Executive Officers of the Company as of June 30, 2025:

 Name

 Position
 with the Company

 Age

 Term
 to Expire

 John
 V. Winfield

 Chairman
 of the Board and Chief Executive Officer (1)

 Yvonne
 Murphy

 John
 C. Love

 (2)(3)(4)

 William
 J. Nance

 (2)(3)

 Steve
 Grunwald

 (1)(3)(4)

 Other
 Executive Officers:

 David
 C. Gonzalez

 President
 (1)

 N/A

 Jolie
Kahn

 Secretary

 N/A

 Ann
 Marie Blair

 Treasurer,
 Controller (Principal Financial Officer). Ms. Blair was appointed effective July 6, 2023

 N/A

 (1)
 Member of Executive Strategic Real Estate and Securities Investment Committee

 (2)
 Member of Audit Committee

 (3)
 Member of Compensation Committee

 (4)
 Member of Nominating Committee

 Business
Experience:

 The
principal occupation and business experience during the last five years for each of the Directors and Executive Officers of the Company
are as follows:

 John
V. Winfield — Mr. Winfield was first elected to the Board in May 1996 and currently serves as Chairman and Chief Executive
Officer. On May 24, 2021, Mr. Winfield resigned from his role as President. Mr. Winfield is also Chairman, President and CEO of InterGroup,
Portsmouth's parent company, and has held those positions since 1987. Mr. Winfield's extensive entrepreneurial, investment,
and leadership experience from serving as a chief executive officer and director of public companies support his role as a director.

 David
C. Gonzalez — Mr. Gonzalez was elected as President in May 2021 upon Mr. Winfield's resignation. He was appointed Chief
Operating Officer on May 31, 2023 and Vice President Real Estate of InterGroup from January 31, 2001 through May 31, 2023. Since 1989,
Mr. Gonzalez has served in numerous capacities with InterGroup, including Controller and Director of Real Estate. He was appointed advisor
of the Executive Strategic Real Estate and Securities Investment Committee of InterGroup and Portsmouth in February 2020.

 Yvonne
L. Murphy — Mrs. Murphy was elected to the Board of Portsmouth in October 2022 and served as a director at Portsmouth
from March to December 2019. She has over 30 years of corporate management, legal research, and legislative lobbying experience, including
service on Nevada Governor Kenny C. Guinn's executive staff in Nevada and employment with Jones Vargas law firm. She participated
in nine legislative sessions and held positions with RR Partners in its corporate and government affairs. Mrs. Murphy holds a Doctorate
and MBA from the California Pacific University and serves as a volunteer board member for the Reno Philharmonic and Renown Health. Her
extensive government affairs and business background supports her directorship. She has been a Director of InterGroup since 2014.

 John
C. Love — Mr. Love was appointed a Director of the Company on March 5, 1998. He is an international hospitality and tourism
consultant, retired partner at Pannell Kerr Forster, and has taught hospitality management control systems and strategy at Golden Gate
University and San Francisco State University for over 30 years. He is Chairman Emeritus of the Board of Trustees of Golden Gate University
and the Executive Secretary of the Hotel and Restaurant Foundation. Mr. Love is also a Director of InterGroup. His CPA background, hospitality
industry experience, and financial knowledge supports his directorship.

 William
J. Nance — Mr. Nance was first elected to the Board in May 1996. He has also served as a consultant in multi-family and commercial
real estate transactions. A CPA, he was previously a Senior Accountant at Kenneth Leventhal & Company, specializing in REITs, restructuring,
M&A, and all phases of real estate development and financing. Mr. Nance is a Director of InterGroup and Comstock Mining, Inc. His
CPA credentials, real estate expertise and public company board service supports his directorship.

 Steve
H. Grunwald — Mr. Grunwald joined the Board in December 2019. He has over 15 years' hospitality operations experience,
including management of multiple hotel openings, renovations, and operations in Brussels. He holds a bachelor's degree from Brussels
Business Institute's College of Hospitality and Tourism Management. His extensive hospitality industry experience supports his
directorship. He has been a Director of InterGroup since October 2022.

 Ann
Marie Blair – Ms. Blair was appointed as Treasurer and Controller on July 6, 2023 and also serves in those roles for InterGroup.
She was previously CFO in the advertising technology industry and holds a BS in Accounting and an MBA from Cumberland University. Ms.
Blair began her career in 2010 in audit, specializing in financial institutions, where she developed deep expertise in financial reporting
standards, risk management, and regulatory compliance. Over the course of her career, she has held progressively senior roles in accounting
and finance, with a focus on financial operations, internal controls, and organizational leadership.

 Family
Relationships: There are no family relationships among directors, executive officers, or persons nominated or chosen by the Company
to become directors or executive officers.

 Involvement
in Certain Legal Proceedings: No director or executive officer, or person nominated or chosen to become a director or executive officer,
has been involved in any legal proceeding requiring disclosure.

 Compliance
with Section 16(a) of the Securities Exchange Act of 1934

 Section
16(a) of the Securities Exchange Act of 1934 requires officers directors, and each beneficial owner of more than ten percent of the Company's
Common Stock to file reports of ownership and changes in ownership with the SEC and to furnish the Company with copies of all such forms.

 Based
solely on review of Forms 3 and 4 and amendments thereto furnished to the Company, and written representations from certain reporting
persons that no Forms 5 were required, the Company believes all filing requirements for fiscal 2025 were met.

 Code
of Ethics.

 The
Company has adopted a Code of Ethics that applies to its executive officers, including its principal executive and financial officers
as well as its Board of Directors. A copy is filed as Exhibit 14 to this Report, posted on the Portsmouth page of its parent company's
website at www.intgla.com, and available without charge upon request to: Portsmouth Square, Inc., Attn: Treasurer, 1516 S. Bundy Drive,
Suite 200, Los Angeles, California 90025. The Company will promptly disclose any amendments or waivers on Form 8-K.

 BOARD
AND COMMITTEE INFORMATION

is an unlisted, Smaller Reporting Company under SEC rules. Except for Chairman and CEO John V. Winfield, all Directors are "independent"
as defined by SEC and NASDAQ rules.

 Procedures
for Recommendations of Nominees to Board of Directors

 There
have been no changes to the procedures by which security holders may recommend nominees to the Board.

 Audit
Committee and Audit Committee Financial Expert

 The
Audit Committee is comprised of William J. Nance (Chairperson) and John C. Love, both independent directors under SEC and NASDAQ rules.
Both qualify as audit committee financial experts based on their qualifications and business experience.

 Item
11. Executive Compensation.

 The
following table provides summary information concerning compensation awarded to, earned by, or paid to the Company's principal
executive officer and other named executive officers whose total compensation exceeded $100,000 for all services rendered to the Company
for each of the Company's last two completed fiscal years ended June 30, 2025 and 2024. No stock awards, long-term compensation,
options or stock appreciation rights were granted to any of the named executive officers during the last two fiscal years.

 SUMMARY
COMPENSATION TABLE

 Annual
 Compensation

 Name and

 All Other

 Position

 Year

 Salary

 Bonus

 Compensation

 Total

 John V. Winfield

 2025

 $
 433,000
 (1)

 $
 -

 $
 -

 $
 433,000

 Chairman and Chief Executive Officer

 2024

 $
 433,000
 (1)

 $
 -

 $
 -

 $
 433,000

 David C. Gonzalez

 2025

 $
 173,000

 $
 -

 $
 -

 $
 173,000

 President

 2024

 $
 173,000

 $
 -

 $
 -

 $
 173,000

 (1)
 Amounts shown include $6,000 per year in regular Directors fees.

has no stock option plan or stock appreciation rights for its executive officers. The Company has no pension or long-term incentive plans.
There are no employment contracts between Portsmouth and any executive officer, and there are no termination-of-employment or change-in-control
arrangements.

 Internal
Revenue Code Limitations

 Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), provides that, in the case of a publicly held corporation,
the corporation is not generally allowed to deduct remuneration paid to its chief executive officer and certain other highly compensated
officers to the extent it exceeds $1,000,000 for the taxable year. Certain remuneration, however, is not subject to disallowance, including
compensation paid on a commission basis and, if certain requirements prescribed by the Code are satisfied, other performance-based compensation.
Since InterGroup and Portsmouth are each a public company, the $1,000,000 limitation applies separately to the compensation paid by each
entity. For fiscal years 2025 and 2024, no compensation paid by the Company to its CEO or other executive officers was subject to the
deduction disallowance prescribed by Section 162(m) of the Code.

 DIRECTOR
COMPENSATION

 The
following table provides information concerning compensation awarded to, earned by, or paid to the Company's directors for the
fiscal year ended June 30, 2025.

 DIRECTOR
COMPENSATION TABLE

 Name

 Fees
 Earned
 or
 Paid in Cash

 All
 Other
 Compensation

 Total

 Yvonne Murphy

 $
 6,000

 -

 $
 6,000

 John C. Love

 $
 8,000
 (1)

 -

 $
 8,000

 William J. Nance

 $
 8,000
 (1)

 -

 $
 8,000

 Steve H. Grunwald

 $
 6,000

 -

 $
 6,000

 John V. Winfield (2)

 -

 -

 -

 (1)
 Amounts shown include regular Board fees and Audit Committee fees.

 (2)
 As an executive officer, Mr. Winfield's director fees are reported in the Summary Compensation Table.

 Each
director is paid a Board retainer fee of $1,500 per quarter for a total annual compensation of $6,000. This policy has been in effect
since July 1, 1985. Members of the Company's Audit Committee also receive a fee of $500 per quarter. Directors and Committee members
are also reimbursed for their out-of-pocket travel costs to attend meetings.

 Change
in Control or Other Arrangements

 Except
for the foregoing, there are no other arrangements for compensation of directors, no employment contracts between the Company and its
directors, or any change-in control arrangements.

 Outstanding
Equity Awards at Fiscal Year End

 The
Company did not have any outstanding equity awards at the end of its fiscal year ended June 30, 2025 and has no equity compensation plans
in effect.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 The
following table sets forth, as of September 29, 2025, certain information regarding the beneficial ownership of Common Stock held by
(i) persons or groups known by the Company to own more than five percent of the outstanding shares, (ii) each Director and Executive
Officer, and (iii) all Directors and Executive Officers as a group.

 Name
 and Address of Beneficial Owner

 Amount
 and Nature of
 Beneficial
 Ownership (1)

 Percent
 of Class (2)

 John V. Winfield

 18,641

 2.5
 %

 Yvonne Murphy

 -

 -

 John C. Love

 -

 -

 William J. Nance

 -

 -

 Steve H. Grunwald

 -

 -

 David C. Gonzalez

 -

 -

 Ann Marie Blair

 -

 -

 The InterGroup Corporation

 556,944
 (4)

 75.9
 %

 All of the above as a group

 575,585

 78.4
 %

 (1)
 Unless otherwise indicated, and subject to applicable community property laws, each person has sole voting and investment power
with respect to the shares beneficially owned.

 (2)
 Percentages are calculated based on 734,187 shares of Common Stock issued and outstanding as of September 29, 2025.

 (4)
 As directors of InterGroup, Messrs. Winfield, Murphy, Love, Nance may direct the vote of the shares of Portsmouth owned by InterGroup.

 Security
Ownership of Management in Parent Corporation.

 As
Chairman of the Board and a 70.1% beneficial shareholder of InterGroup, Mr. Winfield has voting and dispositive power over the shares
recorded as owned and beneficially held by InterGroup.

 Changes
in Control Arrangements.

 There
are no arrangements reasonably likely to result in a change in control of Portsmouth.

Authorized for Issuance Under Equity Compensation Plans.

has had no securities authorized for issuance under any equity compensation plans.

 Item
13. Certain Relationships and Related Transactions, and Director Independence.

 As
of September 29, 2025, InterGroup and John V. Winfield owned 75.9% and 2.5% of the common stock of Portsmouth, respectively.

 Although
we maintain access to a related-party credit facility with InterGroup for additional financial flexibility we do not rely on that facility
to fund ongoing operations. A loss of access could reduce our financial flexibility during periods of market stress. This unsecured facility,
originally entered into in 2014 and subsequently modified, has undergone several amendments over time:

 December
 2021: Portsmouth assumed $11,350,000 in outstanding debt upon the dissolution of Justice Investors L.P.

 July
 2023: Increased available borrowings to $20,000,000 and extended maturity to July 31, 2025 with a 0.5% loan modification fee.

 March
 2024: Increased available borrowings to $30,000,000 with a 0.5% loan modification fee.

 March
 2025: Further increased available borrowing capacity to $40,000,000 and extended the maturity to July 31, 2027.

 May
 2025: Reduction of interest rate from 12% to 9%.

 The
facility now bears interest at 9% and does not require monthly principal or interest payments; accrued amounts are payable at maturity.
It may be prepaid at any time without penalty. During the fiscal year ended June 30, 2025, the Company borrowed an additional $11,615,000
primarily to fund requirements related to the March 2025 Hotel refinancing, including senior mortgage principal reduction, $5 million
escrow reserve required by the lender for potential hotel operating shortfalls, and approximately $1.350 million in capital improvement
reserves for the renovation of 14 guest rooms converted from former administrative offices. As
of that date, the outstanding balance was $38,108,000

 The
Company may also consider amending its by-laws to increase authorized shares and pursue public capital market offerings if deemed necessary
to support liquidity.

 Certain
shared costs and expenses, primarily administrative expenses, rent and insurance are allocated among the Company and InterGroup based
on management's estimate of the pro rata utilization of resources. For the years ended June 30, 2025 and 2024, these expenses were
approximately $144,000 for each year.

 All
of the Company's Directors serve as directors of InterGroup. The Company's President serves as Chief Operating Officer of
InterGroup.

 As
Chairman of the Executive Strategic Real Estate and Securities Investment Committee and the Chief Executive Officer (CEO), John V. Winfield,
directs the Company's investment activity in public and private markets pursuant to authority granted by the Board. Mr. Winfield
also serves as CEO, Chairman and President of InterGroup and oversees its investment activity. Depending on market conditions and risk
factors, the CEO and InterGroup may, at times, invest in the same companies as the Company. Such investments align interests because
they place the personal resources of the CEO and the resources of InterGroup at risk in substantially the same manner as the Company
in connection with investment decisions.

 There
are no other relationships or related transactions between the Company and any of its officers, directors, five-percent security holders
or their families that require disclosure.

Independence

is an unlisted company and a Smaller Reporting Company under the rules and regulations of the SEC. With the exception of the Company's
CEO, John V. Winfield, all of Portsmouth's Board of Directors consists of "independent" directors as independence is
defined by the applicable rules and regulations of the SEC.

 Item
14. Principal Accounting Fees and Services.

 On
January 31, 2022, the Audit Committee retained WithumSmith+Brown, PC, PCAOB ID: 100 ("Withum") as the Company's independent
registered public accounting firm. The aggregate fees billed for each of the last two fiscal years ended June 30, 2025 and 2024 for professional
services rendered by Withum. These fees were billed for audit of the Company's annual financial statements, review of financial
statements included in the Company's Form 10-Q reports, and services provided in connection with statutory and regulatory filings
and engagements for those fiscal years.

 Fiscal Year

 2025

 2024

 Audit fees

 $
 145,000

 $
 95,000

 Tax fees

 31,000

 21,000

 Total

 $
 176,000

 $
 116,000

 Audit
Committee Pre-Approval Policies

 The
Audit Committee will pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be
performed for the Company by its independent registered public accounting firm, subject to any de minimis exceptions allowed for certain
non-audit services described in Section 10A(i)(1)(B) of the Exchange Act if such services are approved by the Committee before audit
completion. The Committee may form and delegate authority to subcommittees consisting of one or more members, including the authority
to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals
will be presented to the full Committee at its next scheduled meeting. All of the services described herein were approved by the Audit
Committee pursuant to its pre-approval policies.

 None
of the hours expended on the independent registered public accounting firm's engagement to audit the Company's consolidated
financial statements for the most recent fiscal year were attributed to work performed by persons other than the independent registered
public accounting firm's full-time permanent employees.

 PART
IV

 Item
15. Exhibits, Financial Statement Schedules.

 (a)(1)
Financial Statements

 The
following consolidated financial statements of the Company are included in Part II, Item 8 of this Report at pages 23 through 43:

 Report
 of Independent Registered Public Accounting Firm

 Balance Sheets - June 30, 2025 and 2024

 Statements of Operations for years ended June 30, 2025 and 2024

 Statements of Shareholders' Deficit for years ended June 30, 2025 and 2024

 Statements of Cash Flows for years ended June 30, 2025 and 2024

 Notes
 to the Consolidated Financial Statements

 (a)(2)
Financial Statement Schedules

 All
other schedules for which provision is made in Regulation S-X have been omitted because they are not required or are not applicable or
the required information is shown in the consolidated financial statements or notes to the consolidated financial statements.

 (a)(3)
Exhibits

 Set
forth below is an index of applicable exhibits filed with this report according to exhibit table number.

 Exhibit
 Number

 Description

 3.(i)

 Bylaws (amended February 16, 2000) *

 3.(ii)

 Articles of Incorporation*

 4.

 Instruments defining the rights of security holders including indentures (See Articles of Incorporation and Bylaws) *

 10.

 Material
 Contracts:

 10.3

 Franchise
 License Agreement, dated December 10, 2004, between Justice Investors Limited Partnership and Hilton Hotels (incorporated by reference
 to Exhibit 10.3 of the Company's amended report on Form 10-K/A for the fiscal year ended June 30, 2011, as filed with the Commission
 on August 24, 2012). *

 10.5

 Management
 Agreement, dated February 1, 2017, between Justice Operating Company, LLC and Aimbridge Management Company, LLC. (incorporated by
 reference to Exhibit 10.5 of the Company's Form 10-K Report for the fiscal year ended June 30, 2017, as filed with the Commission
 on October 13, 2017). *

 10.6

 Mortgage Loan Agreement, dated March 28, 2025, by and among Justice Operating Company, LLC and Prime Finance (portions redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K; certain schedules omitted pursuant to Item 601(a)(5)).

 10.7

 Amended and Restated Mezzanine Loan Agreement, dated March 28, 2025, by and among Justice Mezzanine Company, LLC and PCCP/CRED REIT Portions of this exhibit have been redacted because such information is not material and would be competitively harmful if publicly disclosed. Information where redactions have been made is marked with ***. Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the SEC upon request.

 10.8

 Cash Management Agreement, dated March 28, 2025, by and among Justice Operating Company, LLC, the senior lender and cash management bank. Portions of this exhibit have been redacted because such information is not material and would be competitively harmful if publicly disclosed. Information where redactions have been made is marked with ***. Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the SEC upon request.

 14.

 Code
 of Ethics (filed herewith).

 19.

 Insider trading policy.

 31.1

 Certification
 of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

 31.2

 Certification
 of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

 32.1

 Certification
 of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.

 32.2

 Certification
 of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

 Regarding Erroneously Awarded Compensation.

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 *
All exhibits marked by an asterisk have been previously filed with other documents, including Registrant's Form 10 filed on October
27, 1967, and subsequent filings on Forms 8-K, 10-K, 10-KSB, 10-Q and 10-QSB, which are incorporated herein by reference

 SIGNATURES

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

 (Registrant)

 Date:

 by

 /s/
 John V. Winfield

 John
 V. Winfield,

 Chairman
 of the Board and

 Chief
 Executive Officer

 Date:

 by

 /s/
 Ann Marie Blair

 Ann
 Marie Blair,

 Financial Officer

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 Signatures

 Title
 and Position

 Date

 /s/
 John V Winfield

 Chief
 Executive Officer and Chairman

 John
 V. Winfield

 of
 the Board (Principal Executive Officer)

 /s/
 David C. Gonzalez

 President,
 Advisor of Executive Strategic

 David
 C. Gonzalez

 Real
 Estate and Securities Investment Committee

 /s/
 Yvonne L. Murphy

 Yvonne
 L. Murphy

 /s/
 John C. Love

 John
 C. Love

 /s/
 William J. Nance

 William
 J. Nance

 /s/
 Steve H. Grunwald

 Steve
 H. Grunwald