Quarterly Report for Quarter Ending JUNE 30, 2026 (Form 10-Q)

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

Critical Accounting Policies and Estimates

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Certain of the Company's accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments and estimates are based upon the Company's historical experience, current trends and information available from other sources that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company's significant accounting policies are summarized in Note 2 to our consolidated financial statements in our annual report on Form 10-K. The Company believes the following critical accounting policies are more significant to the judgments and estimates used in the preparation of its consolidated financial statements. Revisions in such estimates are recorded in the period in which the facts that give rise to the revisions become known.

Doubtful Accounts

The Company's allowance for doubtful accounts receivable and notes receivable is based on an analysis of the risk of loss on specific accounts. The analysis places particular emphasis on past due accounts. Management considers such information as the nature and age of the receivable, the payment history of the tenant, customer or other debtor and the financial condition of the tenant or other debtor. Management's estimate of the required allowance, which is reviewed on a quarterly basis, is subject to revision as these factors change.

Deferred Tax Assets

Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The future recoverability of the Company's net deferred tax assets is dependent upon the generation of future taxable income prior to the expiration of the loss carry forwards. At June 30, 2026, the Company had a deferred tax asset due to tax deductions available to it in future years. However, as management could not determine that it was more likely than not that the benefit of the deferred tax asset would be realized, a 100% valuation allowance was established.

Liquidity and Capital Resources

At June 30, 2026, the Company had current assets of $369,000 and current liabilities of $116,000 as compared to $396,000 and $69,000, respectively at December 31, 2025.

Cash and cash equivalents at June 30, 2026, were $304,000 as compared to $383,000 at December 31, 2025.

Results of Operations

Comparison of the three months ended June 30, 2026 to the same period in 2025

The Company reported a Net Income (loss) applicable to common shares on the Statement of Operations of ($66,000) for the three months ended June 30, 2026, as compared to a net loss of ($18,000) for the similar period in 2025.

For the three months ended June 30, 2026 the Company had total revenue of $41,000 including $26,000 for rental income and $15,000 in management fees. For the three months ended June 30, 2025 the Company had total revenue of $40,000 including $26,000 for rental income and $14,000 in management fees.

For the three months ended June 30, 2026, corporate general and administrative expenses were $129,000 as compared to $85,000 for the comparable period in 2025.

For the three months ended June 30, 2026, interest income was $35,000 as compared to $42,000 for the comparable period in 2025.

Comparison of the six months ended June 30, 2026 to the same period in 2025

The Company reported a Net Income (loss) applicable to common shares on the Statement of Operations of ($80,000) for the six months ended June 30, 2026, as compared to a net loss of $38,000 for the similar period in 2025.

For the six months ended June 30, 2026 the Company had total revenue of $80,000 including $52,000 for rental income and $28,000 in management fees. For the six months ended June 30, 2025 the Company had total revenue of $78,000 including $52,000 for rental income and $26,000 in management fees.

For the six months ended June 30, 2065, corporate general & administrative expenses were $206,000 as compared to $174,000 for the comparable period in 2025.

For the six months ended June 30, 2026, interest income was $72,000 as compared to $85,000 for the comparable period in 2024.

Forward Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:A number of the matters and subject areas discussed in this filing that are not historical or current facts deal with potential future circumstances, operations, and prospects. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from the Company's actual future experience involving any one or more of such matters and subject areas relating to interest rate fluctuations, the ability to obtain adequate debt and equity financing, demand, pricing, competition, construction, licensing, permitting, construction delays on new developments, contractual and licensure, and other delays on the disposition, transition, or restructuring of currently or previously owned, leased or managed properties in the Company's portfolio, and the ability of the Company to continue managing its costs and cash flow while maintaining high occupancy rates and market rate charges in its retirement community.The Company has attempted to identify, in context, certain of the factors that it currently believes may cause actual future experience and results to differ from the Company's current expectations regarding the relevant matter of subject area. These and other risks and uncertainties are detailed in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

Inflation

The Company's principal source of revenue is rent fees for services rendered and interest income. Although the Company has not historically experienced any adverse effects of inflation on salaries or other operating expenses, there can be no assurance that such trends will continue.

Environmental Matters

The Company has conducted environmental assessments on most of its existing owned or leased properties. These assessments have not revealed any environmental liability that the Company believes would have a material adverse effect on the Company's business, assets, or results of operations. The Company is not aware of any such environmental liability. The Company believes that all of its properties are in compliance in all material respects with all federal, state, and local laws, ordinances, and regulations regarding hazardous or toxic substances or petroleum products. The Company has not been notified by any governmental authority and is not otherwise aware of any material non-compliance, liability or claim relating to hazardous or toxic substances or petroleum products in connection with any of its communities.