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RELATED PARTY AND OTHER FINANCING TRANSACTIONS
 12 Months Ended
Jun. 30, 2026
Related Party Transactions [Abstract]  
RELATED PARTY AND OTHER FINANCING TRANSACTIONS

NOTE 8 – RELATED PARTY AND OTHER FINANCING TRANSACTIONS

 

Related party and other notes payable consisted of the following:

 

As of June 30,  2026   2025 
Related party note payable - InterGroup  $38,108,000   $38,108,000 
Other note payable - Hilton   1,267,000    1,583,000 
Other note payable - Aimbridge   146,000    396,000 
Total related party and other notes payable  $39,521,000   $40,087,000 

 

InterGroup Credit Facility

 

The Company has an unsecured revolving credit facility with its majority shareholder, The InterGroup Corporation (“InterGroup”), with borrowing capacity of up to $40,000,000. The facility bears interest at 9%, may be prepaid without penalty, and had a contractual maturity date of July 31, 2027 as of June 30, 2026. Principal and accrued interest are due at maturity, and no monthly principal or interest payments are required prior to maturity. During the years ended June 30, 2026 and 2025, the Company borrowed $0 and $11,615,000, respectively, under the facility. The outstanding principal balance was $38,108,000 as of both June 30, 2026 and 2025, leaving $1,892,000 of available borrowing capacity as of June 30, 2026. Interest expense related to the InterGroup facility was $3,437,000 and $3,570,000 for the years ended June 30, 2026 and 2025, respectively. In August 2026, the Company and InterGroup amended the facility to extend its maturity date from July 31, 2027 to July 31, 2029. All other material terms of the facility remained unchanged.

 

Hilton Development Incentive Note

 

The note payable to Hilton represents an interest-free development incentive note that is reduced by approximately $317,000 annually through 2030, subject to the Hotel remaining a Hilton franchisee. The outstanding balance was $1,267,000 and $1,583,000 as of June 30, 2026 and 2025, respectively.

 

Aimbridge Key Money

 

Operating received a $2,000,000 key-money contribution from Aimbridge under the Hotel management arrangement. The contribution is amortized in equal monthly amounts over an eight-year period beginning on the second anniversary of Aimbridge’s commencement of management services. The unamortized balance was $146,000 and $396,000 as of June 30, 2026 and 2025, respectively, and is included in other notes payable in the consolidated balance sheets. See Note 10 – Management Agreements.

 

 

Contractual Maturities and Scheduled Reductions

 

Contractual maturities and scheduled reductions of related party and other notes payable as of June 30, 2026 were as follows:

 

For the years ending June 30,    
     
2027  $463,000 
2028   317,000 
2029   317,000 
2030   38,424,000 
2031   - 
Thereafter   - 
Related party and other notes payable  $39,521,000 

 

The table above reflects contractual terms in effect as of June 30, 2026 and therefore does not give effect to the subsequent extension of the InterGroup facility described above.

 

Other Amounts Due to InterGroup

 

Accounts payable to InterGroup were $21,300,000 and $16,634,000 as of June 30, 2026 and 2025, respectively, and consisted primarily of accrued interest and allocated or shared costs and expenses. Certain administrative, rent, insurance and other shared costs are allocated between the Company and InterGroup based on management’s estimate of the relative use of the applicable resources. Amounts allocated to the Company were $0 and $144,000 for the years ended June 30, 2026 and 2025, respectively.

 

Certain directors and executive officers of the Company also serve as directors or executive officers of InterGroup.