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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-27 · 38 added, 53 removed, 69 unchanged (57% of the section changed)

Management’s Discussion and

Analysis of Financial Condition and Results of Operations.

Discussion and Analysis of Financial Condition and Results of Operations.

General Overview

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The Company’s Board

of Directors is considering strategic uses for its funds to develop or acquire interests in one or more operating businesses.

the Company has focused its development or acquisition efforts on sectors in which its management has expertise, the Company does not

wish to limit itself to, or to foreclose any opportunities in, any particular industry or sector.

Prior to this use, the Company’

anticipate will continue to be, invested in high-grade, short-term investments (such as cash and cash equivalents, U.S.

Treasury Bills,

and mutual funds) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation, until such time

as the Company needs to utilize such funds, or any portion thereof, for the purposes described above.

The directors will also consider

alternatives for distributing some or all of its cash and cash equivalents, and investments to stockholders (see Note 1 to the Consolidated

Financial Statements).

of Directors continues to evaluate possible strategic uses for its funds to develop or acquire interests in one or more operating businesses.

Prior to this use, the Company will continue to be invested in high-grade, short-term investments (such as cash and cash equivalents and

money market mutual funds) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation.

directors will also consider alternatives for distributing some or all of its cash and cash equivalents, and investments to stockholders

(see Note 1 to the Consolidated Financial Statements).

Investment in undeveloped properties.

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Actual results may differ from these estimates.

Certain of our accounting policies require higher

degrees of judgment than others in their application.

These include accounting for income taxes and fair value measurements of investments

which are summarized below.

Deferred tax assets and

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for further information regarding the Company’s income taxes.

Fair value measurements

value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value.

The three levels of the fair value

hierarchy are described as follows:

1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

2 – Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available.

inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data

obtained from sources independent of the Company.

3 – Unobservable inputs.

Unobservable inputs reflect the assumptions that the Company develops based on available information about

what market participants would use in valuing the asset or liability.

Results of Operations

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the year ended December 31, 2024

For the year ended December 31, 2024, the Company had a net loss of

$920,000 compared to a net loss of $1,006,000 for the year ended December 31, 2023.

The decreased loss of $86,000 was primarily the

result of a decrease in Other operating expenses of $87,000, a decrease in Compensation and benefits of $6,000, and an decrease in Interest

and other income of $7,000.

For the year ended December 31, 2025, the Company

had a net loss of $1,024,000 compared to a net loss of $920,000 for the year ended December 31, 2024.

The increased loss of $104,000 was primarily the

result of an increase in Compensation and benefits of $10,000, increase in Other operating expenses of $7,000, and a decrease in Interest

and other income, net of $87,000.

Compensation and benefits

For the year ended December 31, 2025, Compensation

and benefits were $462,000 compared to $452,000 for the year ended December 31, 2024.

The increased Compensation and benefits of $10,000

was the result of increased payroll benefits.

Other operating expenses

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expenses were $634,000 as compared to $627,000 for the year ended December 31, 2024.

The decreased operating expenses of $87,000

were primarily the result of decreased fees related to the repair and maintenance of Company owned dam properties of $71,000, decreased

travel and entertainment expenses of $26,000, and decreased other expenses of $11,000, offset by increased professional fees of $21,000.

The increased operating expenses of $7,000 were

primarily the result of decreased travel and entertainment expenses of $39,000, decreased professional fees of $11,000, offset by increased

fees related to the repair and maintenance of Company owned dam properties of $52,000, and increased other expenses of $5,000.

dam properties were fully impaired as of December 31, 2018.

Interest and other income

For the year ended December 31, 2024, Interest and other income was

$159,000 as compared to $166,000 for the year ended December 31, 2023.

The decreased interest and other income, including net realized

gains and losses on U.S.

Treasury bills, of $7,000 was primarily the result of the lower yields related to the investments in U.S.

securities and mutual funds and lower balances of such investments during the year ended December 31, 2024.

Interest and other income, net

For the year ended December 31, 2025, Interest

and other income, net was $72,000 as compared to $159,000 for the year ended December 31, 2024.

The decreased interest and other

income, net of $87,000 was primarily the result of the lower yields related to the investments in money market mutual funds and lower

balances of such investments.

For the years ended December

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At December 31, 2025, the Company had cash and

cash equivalents totaling $1,440,000 which includes U.S.

government debt securities of $705,000, and short-term investments in mutual

funds totaling $914,000 which it intends to use to acquire interests in one or more operating businesses and to fund the Company’s

cash equivalents totaling $33,000 and short-term investments in money market mutual funds totaling $1,267,000 which it intends to use

to acquire interests in one or more operating businesses, continue to evaluate possible strategic options, and to fund the Company’s

general and administrative expenses.

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and investments to stockholders.

The Company believes that its working capital is sufficient to support its operating requirements through

March 31, 2026.

The increase in cash and cash equivalents of $1,315,000 for the year

ended December 31, 2024 was primarily the result of $938,000 used in operating activities and proceeds from redemptions of investments

Treasury Bills and mutual funds of $4,257,000, offset by the purchase of mutual funds of $2,004,000.

The Company acknowledges that its working capital may not be sufficient to support its operating requirements

through March 31, 2027.

The decrease in cash and cash equivalents of $1,407,000

for the year ended December 31, 2025 was primarily the result of $1,054,000 used in operating activities and proceeds from redemptions

of investments in money market mutual funds of $248,000, offset by the purchase of money market mutual funds of $601,000.

The Company’s recurring operating losses

and negative cash flows from operations for the fiscal year ended December 31, 2025, raise substantial doubt about its ability to continue

as a going concern for the one-year period from the date of filing of this Form 10-K.

Based on the Company’s current cash and

investment balances and projected cash burn, Management has implemented, or is in the process of implementing, operational cost reductions

to decrease cash outflows and extend the Company's liquidity runway.

Quantitative and Qualitative

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis