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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 90 added, 71 removed, 32 unchanged (83% of the section changed)

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

Cautionary Statement Regarding Forward-Looking

Cautionary Statement

Regarding Forward-Looking Statements

This report contains “forward-looking statements”

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as well as other similar words and expressions of the future, are intended to identify forward-looking statements.

Factors that may cause actual results to differ from

those results expressed or implied, include, but are not limited to, those listed under “Risk Factors” in our Annual Report

on Form 10-K for the year ended December 31, 2025 filed by the Company with the Securities and Exchange Commission (the “SEC”)

Factors that may cause actual results to differ

from those results expressed or implied, include, but are not limited to, those listed under “Risk Factors” in our Annual

Report on Form 10-K for the year ended December 31, 2025 filed by the Company with the Securities and Exchange Commission (the “SEC”)

on March 30, 2026.

These forward-looking

statements generally relate to our plans, objectives and expectations for future events and include statements about our expectations,

beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts.

These statements are

based upon our opinions and estimates as of the date they are made.

Although we believe that the expectations reflected in

these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties

that may be beyond our control, which could cause actual results, performance and achievements to differ materially from results, performance

and achievements projected, expected, expressed or implied by the forward-looking statements.

While we cannot assess the future

impact that any of these differences could have on our business, financial condition, results of operations and cash flows or the market

price of shares of our common stock, the differences could be significant.

You are cautioned not to unduly rely on such forward-looking

statements when evaluating the information presented in this report and you are urged to consider all such risks and uncertainties.

In light of the uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a representation

that such forward-looking matters will be achieved.

forward-looking statements generally relate to our plans, objectives and expectations for future events and include statements about our

expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts.

statements are based upon our opinions and estimates as of the date they are made.

Although we believe that the expectations

reflected in these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and

uncertainties that may be beyond our control, which could cause actual results, performance and achievements to differ materially from

results, performance and achievements projected, expected, expressed or implied by the forward-looking statements.

cannot assess the future impact that any of these differences could have on our business, financial condition, results of operations and

cash flows or the market price of shares of our common stock, the differences could be significant.

You are cautioned not to unduly rely

on such forward-looking statements when evaluating the information presented in this report and you are urged to consider all such

risks and uncertainties.

In light of the uncertainty inherent in such forward-looking statements, you should not consider their inclusion

to be a representation that such forward-looking matters will be achieved.

General Overview

The Company is a “shell company”, as defined

in Rule 12b-2 of the Exchange Act.

Because we are a shell company, our stockholders are unable to utilize Rule 144 to sell

“restricted stock” as defined in Rule 144 or to otherwise use Rule 144 to sell our securities, and we are ineligible to utilize

registration statements on Form S-3 or Form S-8 for so long as we remain a shell company and for 12 months thereafter.

consequence, among other things, the offering, issuance and sale of our securities is likely to be more expensive and time consuming and

may make our securities less attractive to investors.

The Company is a “shell company”,

as defined in Rule 12b-2 of the Exchange Act.

Because we are a shell company, our stockholders are unable to utilize Rule 144

to sell “restricted stock” as defined in Rule 144 or to otherwise use Rule 144 to sell our securities, and we are ineligible

to utilize registration statements on Form S-3 or Form S-8 for so long as we remain a shell company and for 12 months thereafter.

a consequence, among other things, the offering, issuance and sale of our securities is likely to be more expensive and time consuming

and may make our securities less attractive to investors.

The Company’s

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Prior to this use, the Company’s funds have

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

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

time as we need 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 in U.S.

Treasury Bills and mutual funds

to stockholders.

been, and we anticipate will continue to be, invested in high-grade, short-term investments (such as cash and cash equivalents and mutual

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

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 in mutual funds to

stockholders.

Results of operations

Three months ended March 31, 2026 compared to the three months ended

March 31, 2025

For the three months ended March 31, 2026, the Company

had a loss from operations of $261,000 compared to a loss from operations of $256,000 for the three months ended March 31, 2025.

The increased loss from operations of $5,000

was primarily a result of a decrease in Interest and other income, net of $21,000, an increase in Compensation and benefits of $7,000,

offset by a decrease in Other operating expenses of $23,000 during the three months ended March 31, 2026 as compared to March 31, 2025.

Three months ended June 30, 2026

compared to the three months ended June 30, 2025

For the three months ended June 30, 2026, the

Company had a net loss of $243,000 compared to a net loss of $244,000 for the three months ended June 30, 2025.

Compensation and benefits

For the three months ended March 31, 2026, Compensation

and benefits were $122,000 as compared to $115,000 for the three months ended March 31, 2025.

The increased Compensation and benefits

of $7,000 was the result of increased payroll benefits.

For the three months ended June 30, 2026, Compensation

and benefits were $115,000 as compared to $113,000 for the three months ended June 30, 2025.

Other operating expenses

For the three months ended March 31, 2026, Other operating

expenses were $149,000 as compared to $172,000 for the three months ended March 31, 2025.

For the three months ended June 30, 2026, Other

operating expenses were $136,000 as compared to $145,000 for the three months ended June 30, 2025.

The decreased operating expenses of

were primarily the result of decreased professional fees of $14,000, decreased travel and entertainment of $13,000, decreased other expenses

of $7,000, offset by increased fees related to the repair and maintenance of Company owned dam properties of $11,000.

The dam properties

were fully impaired as of December 31, 2018.

Interest and other income, net

For the three months ended March 31, 2026, Interest

and other income, net was $10,000 as compared to $31,000 for the three months ended March 31, 2025.

$9,000 were primarily the result of decreased professional fees of $17,000, decreased travel and entertainment of $7,000, decreased other

expenses of $2,000, offset by increased fees related to the repair and maintenance of Company owned dam properties of $17,000.

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

other income, net

For the three months ended June 30, 2026, Interest

and other income, net was $8,000 as compared to $14,000 for the three months ended June 30, 2025.

The decreased interest and other income,

net of $6,000 was primarily the result of the lower yields related to the investments in mutual funds and lower balances on such investments

during the three months ended March 31, 2026.

For the three months ended March 31, 2026 and 2025, the Company recorded

during the three months ended June 30, 2026.

For the three months ended June 30, 2026 and 2025, the Company recorded

no income tax expense from operations.

The Company recorded a full

valuation allowance against its net deferred tax assets as of March 31, 2026 and 2025.

Due to a full valuation allowance on the deferred

tax assets related to net operating loss carryforwards, no tax benefit has been recorded in relation to the pre-tax loss for the years

ended March 31, 2026 and 2025.

The Company recorded

a full valuation allowance against its net deferred tax assets as of June 30, 2026 and 2025.

Due to a full valuation allowance on the

deferred tax assets related to net operating loss carryforwards, no tax benefit has been recorded in relation to the pre-tax loss for

the periods ended June 30, 2026 and 2025.

Six months ended June 30, 2026

compared to the six months ended June 30, 2025

For the six months ended June 30, 2026, the Company

had a net loss of $504,000 compared to a net loss before income taxes of $500,000 for the six months ended June 30, 2025.

The increased loss from operations of $4,000

was primarily a result of a decrease in Interest and other income, net of $27,000, increase Compensation and benefits of $9,000, offset

by a decrease in other operating expenses of $32,000 during the six months ended June 30, 2025.

For the six months ended June 30, 2026, Compensation

and benefits were $237,000 as compared to $228,000 for the six months ended June 30, 2025.

Other operating expenses

For the six months ended June 30, 2026, Other

operating expenses were $285,000 as compared to $317,000 for the six months ended June 30, 2025.

The decreased operating expenses of $32,000

were primarily the result of decreased professional fees of $33,000, decreased travel and entertainment expenses of $20,000, decreased

other expenses of $7,000, offset by increased fees related to the repair and maintenance of Company owned dam properties of $28,000.

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

other income, net

For the six months ended June 30, 2026, Interest

and other income, net was $18,000 as compared to $45,000 for the six months ended June 30, 2025.

The decreased interest and other income,

net of $27,000 was primarily the result of the lower yields related to the investments in U.S.

Treasury securities and mutual funds and

lower balances of such investments during the six months ended June 30, 2026.

For the six months ended

June 30, 2026 and 2025, the Company recorded no income tax expense from operations.

No tax benefit has been recorded in relation to the

pre-tax loss for the six months ended June 30, 2026 and 2025, due to a full valuation allowance to offset any deferred tax asset related

to net operating loss carry forwards attributable to the losses.

Financial condition

Liquidity and Capital Resources

At March 31, 2026, the Company had cash and cash

and Capital Resources

At June 30, 2026, the Company had cash and cash

equivalents totaling $48,000 and investments in mutual funds totaling $870,000 which it intends

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

The Company acknowledges that its working capital may not be sufficient to support its operating requirements through May 31, 2027.

Cash equivalents represent short-term, highly liquid

investments, which are readily convertible to cash and have maturities of three months or less at time of purchase.

Please refer to note

5 of the Notes to Condensed Consolidated Financial Statements for classification of Investments.

The decrease in cash and cash equivalents of $20,000

for the three months ended March 31, 2026 was primarily the result of $211,000 used in operating activities, $10,000 used in the purchase

of mutual funds, offset by the sale and the redemption of investments of $201,000.

The Company acknowledges that its working capital may not be sufficient to support its operating requirements through September 30, 2027.

Cash equivalents represent short-term, highly

liquid investments, which are readily convertible to cash and have maturities of three months or less at time of purchase.

to note 5 of the Notes to Condensed Consolidated Financial Statements for classification of Investments.

The increase in cash and cash equivalents of

$15,000 for the six months ended June 30, 2026 was primarily the result of $382,000 used in operating activities, $18,000 used in the

purchase of mutual funds, offset by the sale and the redemption of investments of $415,000.

Quantitative and Qualitative Disclosures About Market Risk

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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-Q

Item 2. Management’s Discussion and Analysis