UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~March 3031, ~~2025~~2026.

☐	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: 001-37858

CANTERBURY PARK HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

	Minnesota		47-5349765
	(State or Other Jurisdiction of Incorporation or		(I.R.S. Employer
	Organization)		Identification No.)

	1100 Canterbury Road
	Shakopee, MN 55379

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (952) 445-7223

Securities registered pursuant Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock Common stock, $.01 par value	CPHC	Nasdaq

Indicate 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.

Yes

☒

☐

Indicate 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 during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See 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. ☐

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

Yes

☐

☒

The Company had 5,~~099~~150,~~272~~334 shares of common stock, $.01 par value, outstanding as of ~~November~~May 611, ~~2025~~2026.

Canterbury Park Holding Corporation

INDEX

			Page
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements (unaudited)

		Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	2
		Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	2

		Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	3

		Condensed Consolidated Statements of Stockholders’ Equity for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	4

		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	5

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1516
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2021
	Item 4.	Controls and Procedures	2021
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	2122
	Item 1A.	Risk Factors	2122
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2122
	Item 3.	Defaults Upon Senior Securities	2122
	Item 4.	Mine Safety Disclosures	2122
	Item 5.	Other Information	2122
	Item 6.	Exhibits	2223
	Signatures		2223

PART 1 – FINANCIAL INFORMATION

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	September 30,		December 31,
	March 31,		December 31,
	2025		2024
	2026		2025
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1112,~~955~~193,~~482~~651	$	1012,~~075~~064,~~642~~854
Restricted cash		54,~~034~~163,~~402~~468		3,~~611~~759,~~776~~248
Short-term investments		45,~~750~~000,000		5,000,000
Accounts receivable, net of allowance of $7,670 for both periods		1670,~~361,140~~556		~~439~~342,~~121~~866
Inventory		~~290~~268,~~726~~274		~~250~~269,~~658~~419
Prepaid expenses		1,~~209~~196,~~618~~475		1,~~849~~180,~~015~~025
Income taxes receivable and prepaid income taxes		12,~~873~~246,~~858~~466		32,~~186~~426,~~465~~857
Total Current Assets		2625,~~475~~738,~~226~~890		2425,~~412~~043,~~677~~269
LONG-TERM ASSETS
Deposits		2999,~~650~~147		1999,~~650~~147
Other prepaid expenses		2015,~~071~~972		1915,~~951~~972
TIF receivable		20,~~161~~314,~~264~~953		1819,~~898~~986,~~445~~287
Related party receivable		56,~~440~~090,~~222~~746		45,~~743~~959,~~913~~601
Operating lease right-of-use asset		—		27,674
Equity investment		5,207,371		5,155,644
Equity investment		5,351,978		6,976,091
Other long-term receivables		2,097,463		2,097,463
Other long-term receivables		2,097,463		1,597,463
Land held for development		2,792,250		2,659,257
Land held for development		2,504,403		2,183,930
Land, buildings, and equipment, net		51,161,437		51,564,440
Land, buildings, and equipment, net		52,300,551		51,042,988
Total Long-term Assets		87,779,339		87,537,811
Total Long-term Assets		87,905,602		85,510,105
TOTAL ASSETS	$	113,518,229	$	112,581,080
TOTAL ASSETS	$	114,380,828	$	109,922,782
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	32,~~410~~107,~~569~~616	$	32,~~665~~218,~~155~~679
Casino accruals		2,~~471~~502,~~458~~382		2,~~159~~424,~~249~~310
Accrued wages and payroll taxes		2,~~648~~283,~~527~~898		2,~~151~~007,~~524~~174
Cash dividend payable		~~356~~359,~~022~~487		~~351~~356,~~373~~949
Accrued property taxes		1,~~366~~500,~~554~~238		1,~~103~~171,~~784~~974
Deferred revenue		~~474~~641,~~005~~540		~~311~~541,~~244~~236
Payable to horsepersons		21,~~029~~182,~~088~~941		~~870~~873,~~775~~065
Current portion of finance lease obligations		3536,~~111~~630		3235,~~950~~862
Current portion of operating lease obligations		—		27,674
Total Current Liabilities		10,614,732		9,629,249
Total Current Liabilities		12,791,334		10,673,728
LONG-TERM LIABILITIES
Deferred income taxes		910,~~846~~471,000		910,~~846~~471,000
Investee losses in excess of equity investment		78,~~347~~356,~~057~~919		58,~~016~~521,~~198~~464
Finance lease obligations, net of current portion		9071,~~571~~869		~~117~~81,~~182~~319
Other long-term liabilities		181,000		181,000
Total Long-term Liabilities		18,899,788		19,073,783
Total Long-term Liabilities		17,464,628		15,160,380
TOTAL LIABILITIES		29,514,520		28,703,032
TOTAL LIABILITIES		30,255,962		25,834,108
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, 10,000,000 shares authorized, 5,099,272 and 5,036,717 respectively, shares issued and outstanding		50,992		50,367
Common stock, $.01 par value, 10,000,000 shares authorized, 5,150,334 and 5,121,331 respectively, shares issued and outstanding		51,503		51,213
Additional paid-in capital		3031,~~190~~017,~~652~~558		2830,~~940~~690,~~887~~660
Retained earnings		5352,~~883~~934,~~222~~648		5553,~~097~~136,~~420~~175
Total Stockholders’ Equity		84,~~124~~003,~~866~~709		8483,~~088~~878,~~674~~048
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	~~114~~113,~~380~~518,~~828~~229	$	~~109~~112,~~922~~581,~~782~~080

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2025

2024

2025

2024

2026

2025

OPERATING REVENUES:

Casino

89,~~925~~241,~~116~~010

9,~~878~~192,~~660~~158

~~27,605,997~~

~~29,780,059~~

Pari-mutuel

31,~~236~~017,~~032~~952

31,~~327~~078,~~332~~485

~~6,577,878~~

~~7,100,316~~

Food and beverage

31,~~507~~849,~~789~~159

31,~~102~~624,~~706~~753

~~7,199,300~~

~~6,930,086~~

Other

21,~~645~~401,~~764~~413

21,~~975~~246,~~669~~236

~~5,738,892~~

~~5,774,290~~

Total Net Revenues

1813,~~314~~509,~~701~~534

1913,~~284~~141,~~367~~632

~~47,122,067~~

~~49,584,751~~

OPERATING EXPENSES:

Purse expense

21,~~352~~231,~~607~~936

21,~~796~~241,~~644~~740

~~5,557,573~~

~~6,474,049~~

Minnesota Breeders’ Fund

~~281~~193,~~168~~843

~~292~~198,~~740~~583

~~763,317~~

~~810,141~~

Other pari-mutuel expenses

~~181~~164,~~763~~451

~~186~~177,~~745~~170

~~639,218~~

~~708,911~~

Salaries and benefits

76,~~273~~060,~~226~~009

76,~~290~~310,~~780~~705

~~20,533,384~~

~~20,280,955~~

Cost of food and beverage and other sales

1662,~~214,007~~044

1608,~~166,693~~305

~~2,638,445~~

~~2,661,404~~

Depreciation and amortization

1,~~026~~048,~~994~~979

~~936~~931,~~033~~488

~~2,944,900~~

~~2,676,092~~

Utilities

~~544~~395,~~424~~491

~~479~~358,~~361~~531

~~1,360,518~~

~~1,209,039~~

Advertising and marketing

~~792~~134,~~919~~451

~~668~~177,~~572~~075

~~1,538,640~~

~~1,214,788~~

Professional and contracted services

1,~~951~~203,~~992~~905

1,~~915~~210,~~498~~865

~~4,759,706~~

~~4,613,426~~

Other operating expenses

1,644,555

1,637,026

4,253,832

4,137,582

Gain on disposal of assets

(32,000

)

Total Operating Expenses

17,263,655

17,370,092

44,989,533

44,786,387

Other operating expenses

1,390,726

1,277,499

Gain on transfer of land

1,732,353

Total Operating Expenses

12,453,835

12,491,961

INCOME FROM OPERATIONS

1,~~051~~055,~~046~~699

3649,~~646,628~~671

~~2,132,534~~

~~6,530,717~~

OTHER INCOME (LOSS)

Loss from equity investment

(~~936~~1,~~264~~216,794

)

(1,~~374~~573,~~401~~162

)

~~(3,899,029~~

)

~~(3,401,147~~

)

Interest income, net

~~528~~511,~~501~~364

~~521~~443,~~579~~281

~~1,451,162~~

~~1,592,676~~

Net Other Loss

(~~407~~705,~~763~~430

)

(~~852~~1,~~822~~129,881

)

~~(2,447,867~~

)

~~(1,808,471~~

)

INCOME (LOSS) BEFORE INCOME TAXES

~~643~~350,~~283~~269

2(480,~~793,806~~210

)

~~(315,333~~

)

~~4,722,246~~

INCOME TAX (EXPENSE) BENEFIT

(~~156~~180,~~000~~391

)

~~(772~~181,000

)

~~176,000~~

~~(1,364,000~~

)

NET INCOME (LOSS)

~~487~~169,~~283~~878

2(299,~~021,806~~210

)

~~(139,333~~

)

~~3,358,246~~

Basic earnings (loss) per share

0.1003

(0.4006

)

~~(0.03~~

)

~~0.67~~

Diluted earnings (loss) per share

0.1003

(0.4006

)

~~(0.03~~

)

~~0.67~~

Weighted average basic shares outstanding

5,~~086~~125,~~172~~257

5,~~008~~039,~~048~~464

~~5,062,060~~

~~4,986,609~~

Weighted average diluted shares

5,~~101~~154,~~084~~061

5,~~029~~039,~~850~~464

~~5,062,060~~

~~5,021,622~~

Cash dividends declared per share

0.07

~~0.21~~

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

For the three months ended ~~September~~March 3031, ~~2025~~2026

	Number of		Common		Additional			Retained
	Shares		Stock		Paid-in Capital			Earnings			Total
Balance at June 30, 2025		5,086,028	$	50,860	$	29,797,790		$	53,751,961		$	83,600,611
Balance at December 31, 2025		5,121,331	$	51,213	$	30,690,660		$	53,136,175		$	83,878,048
Stock-based compensation		—		—		~~176~~171,~~985~~610			—			~~176~~171,~~985~~610
Dividend declared		—		—		—			(~~356~~371,~~022~~405	)		(~~356~~371,~~022~~405	)
401(k) stock match		1314,~~244~~803		~~132~~148		~~215~~229,~~877~~891			—			~~216~~230,~~009~~039
Net income		—		—		—			487,283			487,283
Issuance of deferred stock awards		14,200		142		(74,603	)		—			(74,461	)
Balance at September 30, 2025		5,099,272	$	50,992	$	30,190,652		$	53,883,222		$	84,124,866
Net income		—		—		—			169,878			169,878
Balance at March 31, 2026		5,150,334	$	51,503	$	31,017,558		$	52,934,648		$	84,003,709

For the ~~nine~~ three months ended ~~September~~March 3031, 2025

	Number of		Common		Additional			Retained
	Shares		Stock		Paid-in Capital			Earnings			Total
Balance at December 31, 2024		5,036,717	$	50,367	$	28,940,887		$	55,097,420		$	84,088,674
Stock-based compensation		—		—		~~508~~153,~~458~~404			—			~~508~~153,~~458~~404
Dividend declared		—		—		—			(1359,~~074,865~~851	)		(1359,~~074,865~~851	)
401(K) stock match		38,457		384		692,907			—			693,291
401(k) stock match		12,100		121		228,932			—			229,053
Issuance of deferred stock awards		179,~~089~~271		~~171~~93		(63,~~901~~823	)		—			(63,730	)
Shares issued under Employee Stock Purchase Plan		7,009		70		112,301			—			112,371
Net loss		—		—		—			(299,210	)		(299,210	)
Net loss		—		—		—			(139,333	)		(139,333	)
Balance at March 31, 2025		5,058,088	$	50,581	$	29,259,400		$	54,438,359		$	83,748,340
Balance at September 30, 2025		5,099,272	$	50,992	$	30,190,652		$	53,883,222		$	84,124,866

For the three months ended September 30, 2024

	Number of		Common		Additional		Retained
	Shares		Stock		Paid-in Capital		Earnings			Total
Balance at June 30, 2024		5,007,921	$	50,079	$	28,086,304	$	55,022,946		$	83,159,329
Stock-based compensation		—		—		147,837		—			147,837
Dividend declared		—		—		—		(350,556	)		(350,556	)
401(k) stock match		11,688		117		211,085		—			211,202
Net income		—		—		—		2,021,806			2,021,806
Balance at September 30, 2024		5,019,609	$	50,196	$	28,445,226	$	56,694,196		$	85,189,618

For the nine months ended September 30, 2024

	Number of		Common		Additional			Retained
	Shares		Stock		Paid-in Capital			Earnings			Total
Balance at December 31, 2023		4,962,573	$	49,626	$	27,351,509		$	54,395,462		$	81,796,597
Stock-based compensation		—		—		418,957			—			418,957
Dividend distribution		—		—		—			(1,059,512	)		(1,059,512	)
401(K) stock match		32,024		320		655,120			—			655,440
Issuance of deferred stock awards		17,475		175		(109,062	)		—			(108,887	)
Shares issued under Employee Stock Purchase Plan		7,537		75		128,702			—			128,777
Net income		—		—		—			3,358,246			3,358,246
Balance at September 30, 2024		5,019,609	$	50,196	$	28,445,226		$	56,694,196		$	85,189,618

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024
	2026			2025
Operating Activities:
Net (loss) income	$	(139,333	)	$	3,358,246
Net income (loss)	$	169,878		$	(299,210	)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		21,~~944~~048,~~900~~979			2931,~~676,092~~488
Stock-based compensation expense		~~508~~171,~~458~~610			~~418~~153,~~957~~404
Stock-based employee match contribution		~~693~~230,~~291~~039			~~655~~229,~~440~~053
Gain on transfer of land		—			(1,732,353	)
Gain on disposal of assets		(32,000	)		—
Deferred income taxes		—			(592,015	)
Loss from equity investment		1,216,794			1,573,162
Loss from equity investment		3,899,029			3,401,147
Changes in operating assets and liabilities:
Accounts receivable		(~~922~~327,~~019~~690	)		(1485,~~973,688~~773	)
Increase in TIF receivable		(~~673~~239,~~026~~491	)		(~~510~~206,~~064~~197	)
Inventory, prepaid expenses and deposits		~~589~~(15,~~209~~305	)		(1128,~~131,436~~217	)
Income taxes receivable and prepaid income taxes		1180,~~312,607~~391			18,~~956,015~~490
Other long-term receivables		(500,000	)		—
Accounts payable		(255,058	)		(1,233,829	)
Operating lease right-of-use asset		27,674			25,352
Deferred revenue		100,304			556,179
Operating lease liabilities		(27,674	)		(25,352	)
Casino accruals		78,072			309,196
Accounts payable		(1,102,520	)		(142,261	)
Accrued wages and payroll taxes		276,724			227,104
Deferred revenue		162,761			50,985
Accrued property taxes		328,264			275,946
Casino accruals		312,209			(426,948	)
Payable to horsepersons		309,876			1,206,942
Accrued wages and payroll taxes		497,003			1,144,048
Net cash provided by operating activities		3,241,387			3,374,172
Accrued property taxes		262,770			(14,884	)
Payable to horsepersons		1,158,313			2,143,239
Net cash provided by operating activities		9,003,652			9,280,520
Investing Activities:
Additions to land, buildings, and equipment		(3634,~~675,002~~974	)		(8858,~~080,229~~600	)
Additions for TIF eligible improvements		(589,793	)		(2,486,158	)
Proceeds from disposal of assets		32,000			—
Increase in related party receivable		(696,309	)		(1,089,996	)
Additions for TIF eligible improvements		(89,175	)		(135,237	)
Proceeds from sale of short-term investments		5,500,000			5,000,000
Equity investment contributions		(1,470,807	)		—
Purchase of short-term investments		(5,250,000	)		(5,000,000	)
Increase in related party receivable		(131,145	)		(165,660	)
Cash dividends received from investments		55,943			19,158
Proceeds from sale of short-term investments		2,750,000			2,250,000
Net cash used in investing activities		(4,655,161	)		(11,637,225	)
Purchase of short-term investments		(2,750,000	)		(2,000,000	)
Cash dividends received from investments		37,741			18,648
Net cash used in investing activities		(2,256,360	)		(890,849	)
Financing Activities:
Proceeds from issuance of common stock		112,371			128,777
Cash dividend paid to shareholders		(368,867	)		(358,005	)
Cash dividend paid to shareholders		(1,070,216	)		(1,055,082	)
Payments for taxes related to net share settlement of equity awards		(74,461	)		(63,730	)
Payments for taxes related to net share settlement of equity awards		(63,730	)		(108,887	)
Principal payments on finance leases		(8,682	)		(7,978	)
Principal payments on finance leases		(24,450	)		(22,463	)
Net cash used in financing activities		(452,010	)		(429,713	)
Net cash used in financing activities		(1,046,025	)		(1,057,655	)
Net increase in cash, cash equivalents, and restricted cash		533,017			2,053,610
Net increase (decrease) in cash, cash equivalents, and restricted cash		3,302,466			(3,414,360	)
Cash, cash equivalents, and restricted cash at beginning of period		15,824,102			13,687,418
Cash, cash equivalents, and restricted cash at beginning of period		13,687,418			25,841,754
Cash, cash equivalents, and restricted cash at end of period	$	16,357,119		$	15,741,028
Cash, cash equivalents, and restricted cash at end of period	$	16,989,884		$	22,427,394

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)

Schedule of non-cash investing and financing activities
Additions to land, buildings, and equipment funded through accounts payable	$	~~848~~144,000		$	1444,~~327,~~000
Dividend declared but not yet paid		~~356~~359,000			~~351~~353,000
Change in investee losses in excess of equity investments		2(165,~~331,~~000	)		2997,~~539,~~000
ROU assets obtained in exchange for lease obligations		—			171,000
Transfer of assets to Trackside Investments, LLC		—			583,000
Supplemental disclosure of cash flow information:
Interest paid	$	92,000		$	103,000

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business – Canterbury Park Holding Corporation’s (the “Company,” “we,” “our,” or “us”) Racetrack operations are conducted at facilities located in Shakopee, Minnesota, approximately 20 miles southwest of downtown Minneapolis. In May 1994, the Company commenced year-round horse racing simulcast operations and hosted the first annual live race meet during the summer of 1995. The Company’s live racing operations are a seasonal business, as it typically hosts live race meets each year from May until September. The Company earns additional pari-mutuel revenue by televising its live racing to out-of-state racetracks around the country. Canterbury Park’s Casino typically operates 24 hours a day, seven days a week and is limited by Minnesota State law to conducting card play on a maximum of 80 tables. The Casino currently offers a variety of poker and table games. The Company’s three largest sources of revenues are from Casino operations, pari-mutuel operations, and food and beverage sales. The Company also derives revenues from related services and activities, such as admissions, advertising signage, publication sales, and from other entertainment events and activities held at the Racetrack. Additionally, the Company is developing underutilized land surrounding the Racetrack in a project known as Canterbury Commons™, with approximately 140 acres originally designated as underutilized. The Company has obtained and is pursuing several mixed-use development opportunities for this land, directly and through joint ventures.

Basis of Presentation and Preparation – The accompanying condensed consolidated financial statements include the accounts of the Company (Canterbury Park Holding Corporation and its direct and indirect subsidiaries Canterbury Park Entertainment, LLC; Canterbury Park Concessions, Inc.; and Canterbury Development, LLC). Intercompany accounts and transactions have been eliminated. The preparation of these condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the fiscal year ended December 31, ~~2024~~2025, included in its Annual Report on Form 10-K (the “~~2024~~2025 Form 10-K”).

The condensed consolidated balance sheets and the related condensed consolidated statements of operations, stockholders’ equity, and the cash flows for the periods ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 have been prepared by Company management. In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, statement of stockholders’ equity, and cash flows at ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 and for the periods then ended have been made.

Summary of Significant Accounting Policies – A detailed description of our significant accounting policies can be found in the ~~2024~~2025 Form 10-K. There were no material changes in significant accounting policies during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026.

Reclassifications – Certain amounts in prior period financial statements have been reclassified to conform to current period presentations.

Restricted Cash – Restricted cash represents refundable deposits and amounts due to horsemen for purses, stakes and awards, collateral needed for joint venture operations, and amounts accumulated in card game progressive jackpot pools, the player pool and poker promotional fund to be used to repay card players in the form of promotions, giveaways, prizes, or by other means.

Accounts Receivable - Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to catering and events. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for credit losses, which represent estimated losses resulting from the inability of customers to make the required payments. Accounts that are outstanding longer than the contractual terms are considered past due. We evaluate our allowance for credit losses and estimate collectability of current and non-current accounts receivable based on historical bad debt experience, our assessment of the financial condition of individual companies with which we do business, current market conditions, and reasonable and supportable forecasts of future economic conditions. In times of economic turmoil, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods. The Company does not have accounts receivable with original maturities greater than one year. The allowance for credit losses and activity as of three months ended ~~September 30~~March 31, ~~2025~~2026 and December 31, ~~2024~~2025 was not material.

Deferred Revenue – Deferred revenue includes advance sales related to racing, events and corporate partnerships. Revenue from these advance billings is recognized when the related event occurs or services have been performed.

Payable to Horsepersons - The Minnesota Pari-mutuel Horse Racing Act requires the Company to segregate a portion of funds (recorded as purse expense in the statements of operations) received from Casino operations and wagering on simulcast and live horse races, for future payment as purses for live horse races or other uses of the horsepersons’ association. Pursuant to an agreement with the Minnesota Horsemen’s Benevolent and Protective Association (“MHBPA”), the Company transferred into a trust account or paid directly to the MHBPA, $6829,~~941,~~000 and $~~7,694,000~~0 for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively, related to thoroughbred races. Minnesota Statutes provide that amounts transferred into the trust account are the property of the trust and not of the Company, and therefore these amounts are not recorded on the Company’s Condensed Consolidated Balance Sheet.

Revenue Recognition – The Company’s primary revenues with customers consist of Casino operations, pari-mutuel wagering on simulcast and live horse races, and food and beverage transactions. We determine revenue recognition through the following steps:

● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligation in the contract ● Recognition of revenue when, or as, we satisfy a performance obligation

● Identification of the performance obligations in the contract

● Determination of the transaction price

● Allocation of the transaction price to the performance obligation in the contract

● Recognition of revenue when, or as, we satisfy a performance obligation

The transaction price for a Casino contract is a set percentage of wagers and is recognized at the time that the wagering process is complete. The transaction price for pari-mutuel wagering is the commission received on a wager, exclusive of any track fees and is recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body. The transaction price for food and beverage contracts is the net amount collected from the customer for these goods. Food and beverage services have been determined to be separate, stand-alone performance obligations and the transaction price is recorded as revenue as the good is transferred to the customer when delivery is made.

Contracts for Casino operations and pari-mutuel wagering involve two performance obligations for those customers earning points under the Company’s loyalty program and a single performance obligation for customers who do not participate in the program. The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as these wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from what would result if the guidance were applied on an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with the loyalty points earned, the Company allocates an amount to the loyalty point contract liability based on the stand-alone redemption value of the points earned, which is determined by the value of a point that can be redeemed for a cash voucher, food and beverage voucher, racing admission, valet parking, or racing forms. Based on past experience, the majority of customers redeem their points for cash vouchers. Therefore, there are no further performance obligations by the Company.

We have two general types of liabilities related to contracts with customers: (1) our MVP Loyalty Program and (2) outstanding chip liability. These are included in the line item Casino accruals on the consolidated balance sheet. We defer the full retail value of these complimentary reward items until the future revenue transaction occurs.

The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.

We evaluate our on-track revenue, export revenue (as described below), and import revenue (as described below) contracts to determine whether we are acting as the principal or as the agent when providing services, to determine if we should report revenue on a gross or net basis. An entity acts as a principal if it controls a specified service before that service is transferred to a customer.

For on-track revenue and “import revenue,” that is revenue we generate for racing held elsewhere that our patrons wager on, we are entitled to retain a commission for providing a wagering service to our customers. For these arrangements, we are the principal because we control the wagering service; therefore, any charges, including simulcast fees, we incur for delivering the wagering service are presented as operating expenses.

For “export revenue,” when the wagering occurs outside our premises, our customer is the third-party wagering site such as a racetrack, Off Track Betting (“OTB”), or advance deposit wagering (“ADW”) provider. Therefore, the revenue we recognize for export revenue is the simulcast host fee we earn for exporting our racing signal to the third-party wagering site.

2. STOCK-BASED COMPENSATION

Long Term Incentive Plan and Award of Deferred Stock

The Long Term Incentive Plan (the “LTI Plan”) authorizes the grant of Long Term Incentive Awards that provide an opportunity to Named Executive Officers (“NEOs”) and other Senior Executives to receive a payment in cash or shares of the Company’s common stock to the extent of achievement at the end of a period greater than one year (the “Performance Period”) as compared to Performance Goals established at the beginning of the Performance Period. Beginning in 2020, the Company suspended the granting of performance awards under its LTI Plan, and instead granted deferred stock awards designed to retain NEOs and other senior executives in lieu of LTI Plan awards from 2020 through ~~2025~~2026. Accordingly, there ~~are~~were no awards outstanding under the LTI Plan during the three months ended March 31, 2026 and 2025.

Board of Directors Stock Options, Deferred Stock Awards, and Restricted Stock Grants

The Company’s Stock Plan currently authorizes annual grants of restricted stock, deferred stock, stock options, or any combination of the three, to non-employee members of the Board of Directors at the time of the Company’s annual shareholders’ meeting as determined by the Board prior to each such meeting. Deferred stock awards represent the right to receive shares of the Company's common stock upon vesting. Restricted stock and deferred stock grants to non-employee directors generally vest 100% one year after the date of the annual meeting at which they were granted, are subject to restrictions on resale for an additional year, and are subject to forfeiture if a board member terminates his or her board service prior to the shares vesting. The unvested deferred stock awards outstanding as of ~~September~~March 3031, ~~2025~~2026 to our non-employee directors consists only of the grants of deferred stock on June 5, 2025 of an aggregate 13,626 shares with a weighted average fair value per share of $17.61.

Board of Directors deferred stock transactions during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 are summarized as follows:

				Weighted
				Average
	Deferred			Fair Value
	Stock			Per Share
Non-Vested Balance, December 31, 2024		10,734		$	22.35
Non-Vested Balance, December 31, 2025		13,626		$	17.61
Granted		~~13,626~~—			~~17.61~~—
Vested		~~(10,734~~—	)		~~22.35~~—
Forfeited		—			—
Non-Vested Balance, September 30, 2025		13,626		$	17.61
Non-Vested Balance, March 31, 2026		13,626		$	17.61

Employee Deferred Stock Awards

The Company's Stock Plan permits its Compensation Committee to grant stock-based awards, including deferred stock awards, to key employees and non-employee directors. The Company has made deferred stock grants to key employees that vest over one to four years. Deferred stock awards represent the right to receive shares of the Company's common stock upon vesting.

During the ~~nine~~ three months ended ~~September 30~~March 31, ~~2025~~2026, the Company granted employees deferred stock awards totaling 2736,~~400~~200 shares of common stock, with a vesting term of approximately four years and a fair value of $1915.4350 per share. During the three ~~nine~~ months ended ~~September~~March 3031, ~~2024~~2025, the Company granted employees deferred stock awards totaling 2226,~~100~~400 shares of common stock, with a vesting term of approximately four years and a fair value of $2119.0850 per share. The compensation cost associated with these grants of deferred stock awards are recorded in "Salaries and benefits" on the Consolidated Statements of Operations.

Employee deferred stock transactions during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 are summarized as follows:

				Weighted
				Average
	Deferred			Fair Value
	Stock			Per Share
Non-Vested Balance, December 31, 2024		43,790		$	22.52
Non-Vested Balance, December 31, 2025		53,210		$	20.92
Granted		2736,~~400~~200			1915.4350
Vested		(1218,~~505~~955	)		2221.6154
Forfeited		~~(4,950~~—	)		~~22.67~~—
Non-Vested Balance, September 30, 2025		53,735		$	20.91
Non-Vested Balance, March 31, 2026		70,455		$	17.97

There were no stock options outstanding to any employee or other person at ~~September~~March 3031, ~~2025~~2026. Stock-based compensation expense related to deferred stock awards and the employee stock purchase plan is included on the Condensed Consolidated Statements of Operations and totaled approximately $~~508~~162,000 and $~~419~~141,000 for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively. At ~~September~~March 3031, ~~2025~~2026, there was approximately $1,~~019~~196,000 of total unrecognized stock-based compensation expense related to unvested employee and board of director deferred stock awards that is expected to be recognized over a period of approximately 34.50 years.

3. NET INCOME PER SHARE COMPUTATIONS

The following is a reconciliation of the numerator and denominator of the earnings per common share computations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025:

	Three Months Ended September 30,					For the Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024			2025			2024
	2026		2025
Net income (loss) (numerator) amounts used for basic and diluted per share computations:	$	~~487~~169,~~283~~878	$	2(299,~~021,806~~210	)	$	~~(139,333~~	)	$	~~3,358,246~~
Weighted average shares (denominator) of common stock outstanding:
Basic		5,~~086~~125,~~172~~257		5,~~008~~039,~~048~~464			~~5,062,060~~			~~4,986,609~~
Plus dilutive effect of deferred stock awards		1428,~~912~~804		~~21,802~~—			—			~~35,013~~
Diluted		5,~~101~~154,~~084~~061		5,~~029~~039,~~850~~464			~~5,062,060~~			~~5,021,622~~
Net income (loss) per common share:
Basic	$	0.1003	$	(0.4006	)	$	~~(0.03~~	)	$	~~0.67~~
Diluted		0.1003		(0.4006	)		~~(0.03~~	)		~~0.67~~

For the three ~~nine~~ months ended ~~September~~March 3031, 2025, 29 24,~~630~~962 shares have been excluded from the calculation of diluted weighted average shares outstanding as the inclusion of these shares would have an anti-dilutive effect.

4. GENERAL CREDIT AGREEMENT

The Company has a general credit and security agreement with a financial institution. The agreement was amended as of February 28, 2021 to extend the maturity date to January 31, 2024 and increase its revolving credit line up to $10,000,000. The line of credit is collateralized by all receivables, inventory, equipment, and general intangibles of the Company, as well as a mortgage on certain real property. In the event that the Company borrowed under the agreement, the annual interest rate paid by the Company would be equal to the greater of the Prime Rate or 3.0%. The credit agreement contains covenants requiring the Company to maintain certain financial ratios. The general credit and security agreement was further amended as of January 31, 2024 to extend the maturity date to January 31, 2027 and reduce the maximum borrowing under the line of credit to $5,000,000. In connection with the amendment, the financial institution terminated a mortgage to release certain Company real property as collateral and the parties entered into a negative pledge agreement under which the Company agreed not to create any liens or encumbrances on certain Company real property. The Company had no borrowings under the credit line during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026. The outstanding balance on the line of credit was $0 at both ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025.

5. OPERATING SEGMENTS

The Company's chief operating decision maker is its Chief Executive Officer and President, Randall D. Sampson. The Company has four reportable operating segments: horse racing, Casino, food and beverage, and development. The horse racing segment primarily represents simulcast and live horse racing operations. The Casino segment represents operations of Canterbury Park’s Casino. The food and beverage segment represents food and beverage operations provided during simulcast and live racing, in the Casino, and during special events. The development segment represents our real estate development operations. The Company’s reportable operating segments are strategic business units that offer different products and services. They are managed separately because the segments differ in the nature of the products and services provided as well as ~~process~~the processes to produce those products and services. The Minnesota Racing Commission regulates the horse racing and Casino segments. Our operating segments reflect the internal management reporting used by our chief operating decision maker, our Chief Executive Officer, to evaluate results of operations and to assess performance and allocate resources.

Depreciation and amortization, interest, and income taxes are allocated to the segments, but no allocation is made to the food and beverage segment for shared facilities. However, the food and beverage segment pays approximately 25% of gross revenues earned on special event days to the horse racing segment for use of the facilities.

The following tables represent a disaggregation of revenues from contracts with customers along with the Company’s operating segments (in 000’s):

For the Three Months Ended September 30, 2025

For the Three Months Ended March 31, 2026

Horse Racing

Casino

Food and Beverage

Development

Total

Net revenues from external customers

52,~~548~~270

89,~~925~~241

31,~~842~~999

—

1813,~~315~~510

Intersegment revenues

79193

—

~~385~~265

—

~~464~~458

Net interest income

~~157~~136

—

~~372~~375

~~529~~511

Depreciation and amortization

~~922~~945

3029

—

1,~~027~~049

Segment income (loss) before income taxes

(~~1,741~~532

)

1,~~832~~060

~~1,167~~740

(~~615~~918

)

~~643~~350

Segment tax expense (benefit)

(~~1,221~~274

)

~~1,441~~547

~~804~~380

(~~868~~473

)

~~156~~180

	For the Nine Months Ended September 30, 2025
	March 31, 2026
	Horse Racing			Casino		Food and Beverage		Development			Total
Segment Assets	$	108,429		$	665	$	38,705	$	35,676		$	183,475
Net revenues from external customers	$	11,677		$	27,606	$	7,839	$	—		$	47,122
Intersegment revenues		270			—		960		—			1,230
Net interest income		461			—		—		990			1,451
Depreciation and amortization		2,615			226		104		—			2,945
Segment income (loss) before income taxes		(2,915	)		3,803		1,887		(3,090	)		(315	)
Segment tax expense (benefit)		(1,627	)		2,123		1,053		(1,725	)		(176	)

		September 30, 2025
Segment Assets		$	107,745			$	815			$	38,177			$	36,654			$	183,391

For the Three Months Ended September 30, 2024

For the Three Months Ended March 31, 2025

Horse Racing

Casino

Food and Beverage

Development

Total

Net revenues from external customers

52,~~882~~194

9,~~879~~192

31,~~524~~756

—

1913,~~285~~142

Intersegment revenues

61136

—

~~411~~267

—

~~472~~403

Net interest income

~~251~~147

—

~~271~~296

~~522~~443

Depreciation and amortization

~~820~~815

—

~~936~~931

Segment income (loss) before income taxes

(~~628~~326

)

~~1,669~~812

~~1,166~~399

~~587~~(1,365

)

~~2,794~~(480

)

Segment tax expense (benefit)

(~~158~~123

)

~~410~~306

~~321~~151

~~199~~(515

)

~~772~~(181

)

	For the Nine Months Ended September 30, 2024
	December 31, 2025
	Horse Racing			Casino		Food and Beverage		Development			Total
Segment Assets	$	106,526		$	740	$	38,129	$	35,949		$	181,344
Net revenues from external customers	$	12,093		$	29,780	$	7,712	$	—		$	49,585
Intersegment revenues		238			—		1,044		—			1,282
Net interest income		809			—		—		784			1,593
Depreciation and amortization		2,328			225		123		—			2,676
Segment income (loss) before income taxes		(1,962	)		5,636		2,086		(1,038	)		4,722
Segment tax expense (benefit)		(567	)		1,628		603		(300	)		1,364

		December 31, 2024
Segment Assets		$	99,810			$	1,041			$	35,679			$	39,088			$	175,618

The following are reconciliations of reportable segment revenues, income before income taxes, and assets, to the Company’s consolidated totals (in 000’s):

	For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
	2025			2024
	2026			2025
Revenues
Total net revenue for reportable segments	$	4813,~~353~~968		$	5013,~~867~~545
Elimination of intersegment revenues		(~~1,231~~458	)		(~~1,282~~403	)
Total consolidated net revenues	$	4713,~~122~~510		$	4913,~~585~~142

(Loss) income before income taxes
Income (loss) before income taxes
Total segment (loss) income before income taxes	$	2,274		$	7,401
Total segment income (loss) before income taxes	$	805		$	(121	)
Elimination of intersegment (loss) income before income taxes		(2,589	)		(2,679	)
Elimination of intersegment income before income taxes		(455	)		(359	)
Total consolidated (loss) income before income taxes	$	(315	)	$	4,722
Total consolidated income (loss) before income taxes	$	350		$	(480	)

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
Assets
Total assets for reportable segments	$	183,~~391~~475		$	~~175~~181,~~618~~344
Elimination of intercompany balances		(69,~~010~~957	)		(6568,~~695~~763	)
Total consolidated assets	$	~~114~~113,~~381~~518		$	~~109~~112,~~923~~581

6. COMMITMENTS AND CONTINGENCIES

Effective on December 21, 2021, the Company entered into a Contribution and Indemnity Agreement (“Indemnity Agreement”) with affiliates of Doran Companies (“Doran”) relating to debt financing by Doran Canterbury I, LLC as borrower, which is guaranteed by Doran affiliates. Under the Indemnity Agreement, the Company is obligated to reimburse and indemnify each loan guarantor for any amounts paid by such loan guarantor to the lender on debt financing by Doran Canterbury I, LLC, up to a maximum of $5,000,000. Effective October 27, 2022, the Indemnity Agreement was amended to increase the maximum indemnification by an additional $700,000. Effective December 12, 2023, the Indemnity Agreement was amended to increase the maximum indemnification by an additional $1,300,000. Effective December 18, 2024, the Indemnity Agreement was amended to increase the maximum indemnification by an additional $500,000. Effective December 30, 2025, the Indemnity Agreement was amended to increase the maximum indemnification by an additional $250,000, bringing the total to a maximum of $7,~~500~~750,000.

Effective December 18, 2024, the Company entered into an Indemnity Agreement with affiliates of Doran relating to debt financing by Doran Canterbury II, LLC as borrower, which is guaranteed by Doran affiliates. Under the Indemnity Agreement, the Company is obligated to reimburse and indemnify each loan guarantor for any amounts paid by such loan guarantor to the lender on debt financing by Doran Canterbury II, LLC, up to a maximum of $1,000,000. Effective December 30, 2025, the Indemnity Agreement was amended to increase the maximum indemnification by an additional $1,750,000, bringing the total to a maximum of $2,750,000.

Effective December 21, 2023, the Company entered into its annual live race meet and purse fund contribution agreement with the Minnesota Horsemen’s Benevolent & Protective Association (“MNHBPA”) and the Minnesota Quarter Horse Racing Association (“MQHRA”) regarding the 2024 live race meet. In an effort to increase field size and improve the quality of racing for the 2024 season, the Company guaranteed purses for overnight races at $23,000 per race. The parties recognized there was likely to be a significant financial cost to the Company in establishing a 2024 thoroughbred purse structure intended to average $23,000 per conducted overnight race and that to maintain that average purse structure, the Company made an overpayment that may be repaid to the Company by the MNHBPA through reimbursement in subsequent racing years. This overpayment of purses by the Company was intended to create a short-term bridge until additional purse supplements can be obtained from other sources. At the conclusion of the 2024 live race meet, the Company recorded a receivable related to the overpayment of 2024 purses in the amount of $1,597,463, which is was presented as Other long-term receivables on the Company's balance sheet as of ~~both~~ ~~September 30, 2025 and~~ December 31, 2024.

Effective January 31, 2025, the Company entered into its annual live race meet and purse fund contribution agreement with the MNHBPA and the MQHRA regarding the ~~upcoming~~ 2025 live race meet. In an effort to maintain field size and improve the quality of racing for the 2025 season, the Company guaranteed an additional $500,000 of purse monies to be distributed above the minimum amount defined in Minnesota ~~Statutes~~ Statute Chapter 240. In the event that additional purse revenues are secured throughout the duration of the 2025 live race agreement through additional forms of gaming at the Company, new revenue streams, or legislative action, the Company agreed to provide additional purse monies of up to $1,500,000, to a total of $2,000,000 in potential overpayment of purses to support the 2025 live race meet. The parties ~~recognize~~recognized there is was likely to be a significant financial cost to the Company in establishing this 2025 thoroughbred purse structure and that to maintain that average purse structure, the Company ~~will~~made ~~be making~~ an overpayment that may be repaid to the Company by the MNHBPA through reimbursement in subsequent racing years. This ~~anticipated~~ overpayment of purses by the Company is was intended to create a short-term bridge until additional purse supplements can be obtained from other sources. ~~In the event that~~ ~~additional~~At ~~purse revenue is secured within~~ the ~~five~~conclusion ~~years~~of ~~following~~ the 2025 live race meet ~~through additional forms of gaming at the Company~~, ~~new revenue streams, or legislative action,~~ the Company ~~will be eligible for reimbursement of the actual 2025 overpayment amount from those purse supplements. The Company~~ recorded a receivable related to the overpayment of 2025 purses in the amount of $500,000~~, which is presented as Other long-term receivables on the Company's balance sheet as of September 30, 2025~~.

AsThe combined ~~mentioned~~amounts ~~above~~from the 2024 and 2025 live race meet agreements of $2,097,463 inis presented as Other long-term receivables on the Company's balance sheet as of March 31, 2026. In the event that additional purse revenue is secured within the five years following the 2025 live race meet through additional forms of gaming at the Company, new revenue streams, or legislative action, the Company will be eligible for reimbursement of the actual ~~2024 and~~ 2025 overpayment ~~amounts~~amount from those purse supplements. Management believes it is likely that additional purse supplements will ultimately be obtained when considering both the length of time to secure such funds and the fact that legislation has been introduced in both chambers of the Minnesota legislature that would provide those supplements through revenues from taxes paid by sports wagering licenses. Accordingly, management believes no allowance related to this receivable is necessary at both September 30, 2025 and December 31, 2024.

~~The~~As ~~Company~~mentioned above, in the event that additional purse revenue is ~~periodically~~secured ~~involved~~within inthe ~~various~~five ~~claims~~years ~~and~~following ~~legal~~the ~~actions~~2025 ~~arising~~live inrace meet through additional forms of gaming at the ~~normal~~Company, ~~course~~new revenue streams, or legislative action, the Company will be eligible for reimbursement of ~~business~~the actual 2024 and 2025 overpayment amounts from those purse supplements. Management believes it is likely that additional purse supplements will ultimately be obtained when considering both the ~~resolution~~length of ~~any~~time ~~pending~~to ~~claims~~secure such funds and ~~legal~~the ~~actions~~fact ~~at September~~that ~~30,~~legislation ~~2025~~has ~~and~~been asintroduced in both chambers of the ~~date~~Minnesota oflegislature ~~this~~that ~~report~~would provide those supplements through revenues from taxes paid by sports wagering licenses. Accordingly, ~~will~~management ~~not~~believes ~~have~~no aallowance ~~material~~related ~~impact~~to onthis ~~the~~receivable ~~Company’s~~is ~~consolidated~~necessary ~~financial~~at ~~positions~~both March or31, ~~results~~2026 ofand December ~~operations~~31, 2025.

Effective January 30, 2026, the Company entered into its annual live race meet and purse fund contribution agreement with the MNHBPA and the MQHRA regarding the 2026 live race meet. This 2026 live race agreement does not include any additional guarantees by the Company to fund or distribute purse monies above the minimum amount defined in statute.

The Company is periodically involved in various claims and legal actions arising in the normal course of business. Management believes that the resolution of any pending claims and legal actions at March 31, 2026 and as of the date of this report, will not have a material impact on the Company’s consolidated financial positions or results of operations.

In August 2018, the Company entered into a Contract for Private Redevelopment with the City of Shakopee in connection with a Tax Increment Financing District (“TIF District”). On January 25, 2022, the Company received the fully executed First Amendment to the Contract for Redevelopment among the Master Developer, the City and the Authority, which is effective as of September 7, 2021. Under this contract, the Company is obligated to construct certain infrastructure improvements within the TIF District, and will be reimbursed for the cost of TIF eligible improvements by the City of Shakopee by future tax increment revenue generated from the developed property, up to specified maximum amounts. The total amount of funding that Canterbury will be paid as reimbursement under the TIF program for these improvements is not guaranteed and will depend on future tax revenues generated from the developed property.

7. REAL ESTATE DEVELOPMENT

Equity Investments

Doran Canterbury I, LLC

On April 2, 2018, the Company’s subsidiary Canterbury Development LLC, entered into an Operating Agreement (“Operating Agreement”) with an affiliate of Doran Companies (“Doran”), a national commercial and residential real estate developer, as the two members of a Minnesota limited liability company named Doran Canterbury I, LLC (“Doran Canterbury I”). Doran Canterbury I was formed as part of a joint venture between Doran and Canterbury Development LLC to construct an upscale apartment complex on land adjacent to the Company’s Racetrack (the “Project”).

On September 1127, 2018, Canterbury Development LLC contributed approximately 13 acres of land as its equity contribution in the Doran Canterbury I joint venture and became a 27.4% equity member. On December 20, 2018, financing for Doran Canterbury I was secured. Doran Canterbury I completed Phase I of the Project, which includes 321 units, a heated parking ramp, and a clubhouse. As the Company is able to assert significant influence, but not control, over Doran Canterbury I’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. For the three months ended March 31, 2026 and 2025, the Company recorded losses of $602,000 and $997,000, respectively, on equity method investment related to this joint venture. In accordance with U.S. GAAP, since we are committed to provide future capital contributions to Doran Canterbury I, we also present as a liability in the accompanying Condensed Consolidated Balance Sheets the net balance recorded for our share of Doran Canterbury I's losses in excess of the amount funded into Doran Canterbury I, which was $8,357,000 and $7,755,000 at March 31, 2026 and December 31, 2025, respectively. See Note 9 of Notes to Financial Statements for a summary of member loans to Doran Canterbury I.

~~On September~~We ~~27,~~are ~~2018,~~a ~~Canterbury~~party ~~Development~~to ~~LLC~~a ~~contributed approximately 13 acres of land as its equity~~ contribution ~~in the Doran Canterbury I joint venture~~ and ~~became~~indemnity aagreement ~~27.4%~~with ~~equity~~affiliates ~~member.~~of ~~On December~~Doran ~~20,~~relating ~~2018,~~to debt financing ~~for~~by Doran Canterbury I ~~was~~as ~~secured. Doran Canterbury I completed Phase I of the Project~~borrower, which ~~includes~~is ~~321 units,~~guaranteed aby ~~heated~~Doran ~~parking ramp, and a clubhouse~~affiliates. AsUnder the ~~Company~~contribution ~~is able to assert significant influence, but not control, over Doran Canterbury I’s operational~~ and ~~financial~~indemnity ~~policies~~agreement, ~~the Company accounts for the joint venture~~ as ~~an equity method investment. For the three and nine months ended September 30~~amended, ~~2025,~~ the Company ~~recorded losses~~is ofobligated ~~$494,000 and $2,331,000, respectively, on equity method investment related~~ to ~~this~~reimburse ~~joint venture. For the three~~ and ~~nine months~~indemnify ~~ended September 30,~~each ~~2024,~~loan ~~the~~guarantor ~~Company~~for ~~recorded losses~~any ofamounts ~~$927,000~~paid ~~and $2,539,000,~~by ~~respectively,~~such onloan ~~equity~~guarantor ~~method investment related~~ to ~~this~~the ~~joint~~lender ~~venture.~~on Indebt ~~accordance~~financing ~~with~~by ~~U.S. GAAP, since we are committed to provide future capital contributions to~~ Doran Canterbury I, weup ~~also~~to ~~present as~~ a ~~liability~~maximum ~~in the accompanying Condensed Consolidated Balance Sheets the net balance recorded for our share~~ of ~~Doran Canterbury I's losses in excess of the amount funded into Doran Canterbury I, which was~~ $7,~~347~~750,000 ~~and~~as ~~$5,016,000 at~~of ~~September~~March ~~30, 2025 and December~~ 31, ~~2024, respectively~~2026. See Note ~~9 of~~6. ~~Notes to~~“Commitments ~~Financial~~and ~~Statements for a summary of member loans to Doran Canterbury I~~Contingencies.”

We are a party to a contribution and indemnity agreement with affiliates of Doran relating to debt financing by Doran Canterbury I as borrower, which is guaranteed by Doran affiliates. Under the contribution and indemnity agreement, as amended, the Company is obligated to reimburse and indemnify each loan guarantor for any amounts paid by such loan guarantor to the lender on debt financing by Doran Canterbury I, up to a maximum of $7,500,000 as of September 30, 2025. See Note 6. “Commitments and Contingencies.”

Doran Canterbury II, LLC

In connection with the execution of the Amended Doran Canterbury I Agreement, on August 18, 2018, Canterbury Development LLC entered into an Operating Agreement with Doran Shakopee, LLC as the two members of a Minnesota limited liability company entitled Doran Canterbury II, LLC (“Doran Canterbury II”). The Operating Agreement was amended and restated by the members effective July 30, 2020. On September 30, 2020, Canterbury Development LLC contributed approximately 10 acres of land as its equity contribution in the Doran Canterbury II joint venture and became a 27.4% equity member. Doran Canterbury II has completed developing Phase II of the project which includes an additional 300 apartment units. On January 8, 2026, Canterbury Development LLC contributed $1,466,405 as an equity contribution to its Doran Canterbury II joint venture. This equity contribution was necessary for Doran Canterbury II to complete refinancing of its existing mortgage payable and is expected to reduce future interest expense from this joint venture. As the Company is able to assert significant influence, but not control, over Doran Canterbury II’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. For the three ~~and nine~~ months ended ~~September~~March 3031, 2026 and 2025, the Company recorded losses of $~~387~~558,000 and $1512,~~362,~~000, respectively, on equity method investment related to this joint venture. In ~~For~~accordance ~~the~~with ~~three~~U.S. ~~and~~GAAP, ~~nine months~~since ~~ended September 30,~~we ~~2024,~~are ~~the~~committed ~~Company~~to ~~recorded losses~~provide offuture ~~$364,000~~capital ~~and $781,000,~~contributions ~~respectively~~to Doran Canterbury I, onwe ~~equity~~also ~~method~~present ~~investment~~as ~~related~~a toliability ~~this~~in ~~joint~~the ~~venture. Under~~accompanying Condensed Consolidated Balance Sheets the ~~Operating~~net ~~Agreement,~~balance werecorded ~~are~~for ~~required~~our toshare ~~provide~~of ~~future~~Doran ~~member~~Canterbury ~~loans~~I's tolosses in excess of the amount funded into Doran Canterbury II, towhich ~~cover~~was ~~the~~$0 ~~costs~~and of$766,000 ~~construction~~at March 31, or2026 and December ~~operating~~31, ~~deficiencies~~2025, respectively. See Note 9 of Notes to Financial Statements for a summary of member loans to Doran Canterbury II.

We are a party to a contribution and indemnity agreement with affiliates of Doran relating to debt financing by Doran Canterbury II as borrower, which is guaranteed by Doran affiliates. Under the contribution and indemnity agreement, as amended, the Company is obligated to reimburse and indemnify each loan guarantor for any amounts paid by such loan guarantor to the lender on debt financing by Doran Canterbury II, up to a maximum of $12,~~000~~750,000 as of ~~September~~March 3031, ~~2025~~2026. See Note 6. “Commitments and Contingencies.”

Canterbury DBSV Development, LLC

On June 16, 2020, Canterbury Development LLC, entered into an Operating Agreement with an affiliate of Greystone Construction, as the two members of a Minnesota limited liability company named Canterbury DBSV Development, LLC ("Canterbury DBSV"). Canterbury DBSV was formed as part of a joint venture between Greystone and Canterbury Development LLC for a multi-use development on the 13-acre land parcel located on the southwest portion of the Company’s racetrack. Canterbury Development LLC's equity contribution to Canterbury DBSV was approximately 13 acres of land, which were contributed to Canterbury DBSV on July 1, 2020. In connection with its contribution, Canterbury Development became a 61.87% equity member in Canterbury DBSV. As the Company is able to assert significant influence, but not control, over Canterbury DBSV’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. Canterbury DBSV has since entered into multiple other joint venture investments, all related to the multi-use development of the 13-acre parcel mentioned before. All such investments are accounted for under the equity method by Canterbury DBSV. For the three ~~and nine~~ months ended ~~September~~March 3031, 2026 and 2025, the Company recorded losses of $5635,000 and $~~189~~65,000, respectively, on equity method investment related to this joint venture. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024,~~2026 ~~the Company recorded a losses of $84,000~~ and ~~$81,000,~~ ~~respectively, on equity method investment related to this joint venture. For the three and nine months ended September 30,~~ 2025, the Company also received dividend distributions of $1938,000 and $~~56,000, respectively, related to this joint venture. For the three and nine months ended September 30, 2024, the Company received dividend distributions of $6,000 and $~~19,000, respectively, related to this joint venture.

Trackside Investments, LLC

On September 20, 2023, Canterbury Development, entered into an Operating Agreement with Trackside Holdings, LLC as the two members of a Minnesota limited liability company named Trackside Investments, LLC ("Trackside Investments"). Trackside Investments was formed as a joint venture for the development of an approximately 16,000 square foot restaurant and entertainment venue. Canterbury Development, LLC's equity contribution to Trackside Investments was approximately 3.5 acres of land, which were contributed to Trackside Investments on August 20, 2024. In connection with its contribution, Canterbury Development became a 50% equity member in Trackside Investments. In addition, Canterbury Development is guaranteed an annual 6% preferred return on the balance of Canterbury Development's undistributed base capital. As the Company is able to assert significant influence, but not control, over Trackside Investments' operational and financial policies, the Company accounts for the joint venture as an equity method investment. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, the Company recorded ~~income of $1,000 and~~ a loss of $1722,000~~, respectively,~~ on equity method investment related to this joint venture. As of ~~September 30~~March 31, ~~2024~~2025, the proportionate share of Trackside Investments' earnings was immaterial as Trackside Investments was not placed into service until June 2025.

~~The~~Financial information ~~following~~from ~~table~~the ~~summarizes~~financial ~~changes~~statements toof the ~~Equity~~Company's ~~investment~~joint ~~and~~ventures, ~~Investee~~Doran ~~losses~~Canterbury inI, ~~excess~~LLC of(Doran ~~equity~~I), ~~investment~~Doran ~~lines on~~Canterbury ~~our~~II, ~~consolidated~~LLC ~~balance~~(Doran ~~sheets~~II), asand ~~of September 30,~~all ~~2025~~the ~~and December~~Company's ~~31,~~other ~~2024~~joint ventures are summarized as follows:

	Equity investment			Investee losses in excess of equity investment			Equity investment, net
	As of March 31, 2026
Net Equity Investment Balance at December 31, 2024	$	6,976,091		$	(5,016,198	)	$	1,959,893
	Total			Doran I			Doran II			Other
Q1 Equity investment loss		(576,502	)		(996,660	)		(1,573,162	)
Current assets	$	6,738,375		$	4,901,039		$	1,685,475		$	151,861
Q2 Equity investment loss		(549,895	)		(839,708	)		(1,389,603	)
Noncurrent assets		138,447,469			52,263,782			72,759,758			13,423,929
Q3 Equity investment loss		(441,773	)		(494,491	)		(936,264	)
Current liabilities		77,181,415			72,200,215			4,949,577			31,623
Dividends received from investments		(55,943	)		—			(55,943	)
Noncurrent liabilities		86,270,128			14,799,123			66,296,005			5,175,000
Net Equity Investment Balance at September 30, 2025	$	5,351,978		$	(7,347,057	)	$	(1,995,079	)
Joint ventures' equity		(18,265,699	)		(29,834,517	)		3,199,651			8,369,167
CPHC share of joint ventures' equity		(3,149,548	)		(8,356,918	)		141,736			5,065,634

	*Three Months Ended March 31, 2026*
	*Total*			*Doran I*			*Doran II*			*Other*
Net sales	$	2,688,598		$	939,231		$	1,617,102		$	132,265
Gross profit (loss)		1,177,894			196,573			864,771			116,550
Net income		(4,334,044	)		(2,195,863	)		(2,038,166	)		(100,015	)
CPHC share of equity in income of joint ventures		(1,216,794	)		(601,666	)		(558,457	)		(56,670	)
CPHC's dividends received from joint ventures		(37,741	)		—			—			(37,741	)

	*As of December 31, 2025*
	*Total*			*Doran I*			*Doran II*			*Other*
Current assets	$	6,306,889		$	5,779,528		$	456,519		$	70,842
Noncurrent assets		139,607,148			53,053,492			72,925,034			13,628,622
Current liabilities		77,028,627			72,325,450			4,693,064			10,113
Noncurrent liabilities		89,001,340			14,567,290			69,259,050			5,175,000
Joint ventures' equity		(20,115,930	)		(28,059,720	)		(570,561	)		8,514,351
CPHC share of joint ventures' equity		(3,365,820	)		(7,755,253	)		(766,211	)		5,155,644

	*Three Months Ended March 31, 2025*
	*Total*			*Doran I*			*Doran II*			*Other*
Net sales	$	1,463,597		$	128,128		$	1,327,829		$	7,640
Gross profit (loss)		171,736			(643,904	)		829,388			(13,748	)
Net income		(5,610,097	)		(3,637,445	)		(1,868,227	)		(104,425	)
CPHC share of equity in income of joint ventures		(1,573,162	)		(996,660	)		(511,894	)		(64,608	)
CPHC's dividends received from joint ventures		(18,648	)		—			—			(18,648	)

Tax Increment Financing

On August 8, 2018, the City Council of the City of Shakopee, Minnesota approved a Contract for Private Redevelopment (“Redevelopment Agreement”) between the City of Shakopee Economic Development Authority (“Shakopee EDA”) and Canterbury Park Holding Corporation and its subsidiary Canterbury Development LLC in connection with a Tax Increment Financing District (“TIF District”) that the City had approved in April 2018. The City of Shakopee, the Shakopee EDA and the Company entered into the Redevelopment Agreement on August 10, 2018.

Under the Original Agreement, the Company agreed to undertake a number of specific infrastructure improvements within the TIF District, and the City agreed that a portion of the tax revenue generated from the developed property will be paid to the Company to reimburse it for its expense in constructing these improvements. Under the Original Agreement, the total estimated cost of TIF eligible improvements to be borne by the Company was $23,336,500.

1213

On January 25, 2022, the Company received the fully executed First Amendment to the Contract for Private Redevelopment (the “First Amendment”) among the Company, the City of Shakopee, and the Shakopee EDA, which is effective as of September 7, 2021. Under the First Amendment and as part of the authorized changes regarding the responsibilities of the Company and the City, improvements on Unbridled Avenue will be primarily constructed by the City of Shakopee. As a result, the total estimated cost of TIF eligible improvements to be borne by the Company was reduced by $5,744,000 to an amount not to exceed $17,592,881. In order to reimburse the Company for the qualified costs related to constructing the developer improvements, the Authority will issue and the Company will receive a TIF Note in the maximum principal amount of $17,592,881. The First Amendment also memorialized that the Company completed the Shenandoah Drive improvements as required prior to December 31, 2019. The City is obligated to issue bonds to finance the portion of the improvements required to be constructed by the City.

A detailed Schedule of the Public Improvements under the First Amendment, the timeline for their construction and the source and amount of funding is set forth in the First Amendment, which is filed as Exhibit 10.1 of the Form 8-K filed on January 31, 2022. The Company expects to substantially complete the remaining developer improvements by July 17, 2027 and will be reimbursed for costs of the developer improvements incurred by no later than July 17, 2027. The total amount of funding that the Company will be paid as reimbursement under the TIF program for these improvements is not guaranteed, however, and will depend in part on future tax revenues generated from the developed property.

As of ~~September~~March 3031, ~~2025~~2026, the Company recorded a TIF receivable of approximately $20,~~161~~315,000, which represents $16,~~141~~394,000 of principal and $43,~~020~~921,000 of interest. Management believes future tax revenues generated from current development activity will exceed the Company's development costs and thus, management believes no allowance related to this receivable is necessary. As of December 31, ~~2024~~2025, the Company recorded a TIF receivable of approximately $1819,~~898~~986,000, which represented $1516,~~551~~305,000 of principal and $3,~~347~~681,000 of interest.

As of December 31, 2025, the Company received its first payment from the City of Shakopee totaling $582,000, fully related to interest on this receivable.

The Company expects to finance its improvements under the Redevelopment Agreement with funds from its current operating resources and existing credit facility and, potentially, third-party financing sources.

8. LEASES

The Company determines if an arrangement is a lease or contains a lease at inception. The Company leases some office equipment under finance leases. We also lease equipment related to our horse racing operations under operating leases. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short term leases.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We recognize expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements do not contain any variable lease payments, material residual value guarantees or any restrictive covenants.

Lease costs related to operating leases were $~~16,952~~0 ~~and $25,353, respectively,~~ for both the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025. The total lease expenses for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or liability was $~~378~~92,~~187~~643 and $~~386~~112,~~044~~489 for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively.

Lease costs included in depreciation and amortization related to our finance leases were $169,~~952~~046 and $242,~~999~~870 for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively. Interest expense related to our finance leases was immaterial.

The following table shows the classification of the right of use assets on our consolidated balance sheets:

		September 30,		December 31,
		March 31,		December 31,
	Balance Sheet Location	~~2025~~2026		~~2024~~2025
Assets
Finance	Land, buildings and equipment, net (1)	$	~~125~~108,~~682~~499	$	~~150~~117,~~132~~181
Operating	Operating lease right-of-use assets		-		~~27,674~~-
Total Leased Assets		$	~~125~~108,~~682~~499	$	~~177~~117,~~806~~181

1 – Finance lease assets are net of accumulated amortization of $5572,~~228~~411 and $3063,~~779~~729 as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, respectively.

The following table shows the lease terms and discount rates related to our leases:

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
Weighted average remaining lease term (in years):
Finance		3.2.7			43.0
Operating		-			~~0.4~~-
Weighted average discount rate (%):
Finance		8.5	%		8.5	%
Operating		-			~~8.0~~-	%

The maturity of operating leases and finance leases as of September 30, 2025 are as follows:

Nine Months Ended September 30,	Finance leases
2025 remaining	$	11,112
2026		44,447
2027		44,447
2028		44,251
2029 and beyond		—
Total minimum lease obligations		144,257
Less: amounts representing interest		(18,575	)
Present value of minimum lease payments		125,682
Less: current portion		(35,111	)
Lease obligations, net of current portion	$	90,571

9. RELATED PARTY RECEIVABLES

Since 2019, the Company has made member loans to the Doran Canterbury I and the Doran Canterbury II joint ventures totaling approximately $4,241,000 and $3,812,000 as of September 30, 2025 and December 31, 2024, respectively. These member loans bear interest at the rate equal to the Prime Rate plus two percent per annum, and accrued interest totaled $1,181,000 and $898,000 as of September 30, 2025 and December 31, 2024, respectively. For the three and nine months ended September 30, 2025, the Company recorded interest income of $98,000 and $283,000, respectively, related to these member loans. For the three and nine months ended September 30, 2024, the Company recorded interest income of $99,000 and $274,000, respectively, related to these member loans. The Company expects to be fully reimbursed for these member loans as and when the joint ventures achieve positive cash flow. Under the Operating Agreements for Doran Canterbury I and Doran Canterbury II, the joint ventures must repay member loans before payments to members in accordance with their percentage interests.

The Company has also recorded related party receivables of approximately $19,000 and $34,000 as of September 30, 2025 and December 31, 2024, respectively, for various related costs incurred by the Company. The Company expects to be fully reimbursed for these costs by the related parties in the following year.

The maturity of operating leases and finance leases as of March 31, 2026 are as follows:

Three Months Ended March 31,	*Finance leases*
2026 remaining	$	33,335
2027		44,447
2028		44,252
2029		—
2030 and beyond		—
Total minimum lease obligations		122,034
Less: amounts representing interest		(13,535	)
Present value of minimum lease payments		108,499
Less: current portion		(36,630	)
Lease obligations, net of current portion	$	71,869

9. RELATED PARTY RECEIVABLES

Since 2019, the Company has loaned money to the Doran Canterbury I and II joint ventures in member loans totaling approximately $4,657,000 as of both March 31, 2026 and December 31, 2025. These member loans bear interest at the rate equal to the Prime Rate plus two percent per annum and totaled $1,385,000 and $1,284,000 as of March 31, 2026 and December 31, 2025, respectively.

The Company evaluates the collectability of the related party receivables from the Doran Canterbury I and II joint ventures on an ongoing basis. In evaluating collectability, management considers the joint ventures' financial condition, liquidity, historical and projected operating performance, and expected future cash flows, as well as the Company's ownership interest and involvement.

Based on this evaluation, management determined that the outstanding balances are collectible as of March 31, 2026. Management's assessment considered the joint ventures' forecasted cash flows and expected operating performance, which management believes will enable the joint ventures to meet their payment obligations. Accordingly, no allowance for credit losses has been recorded for this receivable as of March 31, 2026 and December 31, 2025.

The Company has also recorded related party receivables of approximately $49,000 and $19,000 as of March 31, 2026 and December 31, 2025, respectively, and are primarily related to dividends receivable. The Company expects to collect these receivables from the related parties within a year.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Canterbury Park Holding Corporation and its subsidiaries, our operations, our financial results and financial condition and our present business environment. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes to the financial statements (the “Notes”).

Overview:

Canterbury Park Holding Corporation (the “Company,” “we,” “our,” or “us”) conducts pari-mutuel wagering operations and hosts “unbanked” card games at its Canterbury Park Racetrack and Casino facility (the “Racetrack”) in Shakopee, Minnesota, which is approximately 20 miles southwest of downtown Minneapolis. The Racetrack is the only facility in the State of Minnesota that offers live pari-mutuel thoroughbred and quarter horse racing.

The Company’s pari-mutuel wagering operations include both wagering on thoroughbred and quarter horse races during live meets at the Racetrack each year from May through September, and year-round wagering on races held at out-of-state racetracks that are televised simultaneously at the Racetrack (“simulcasting”). Unbanked card games, in which patrons compete against each other, are hosted in the Casino at the Racetrack. The Casino typically operates 24 hours a day, seven days a week. The Casino offers both poker and table games at up to 80 tables. The Company also derives revenues from related services and activities, such as concessions, parking, advertising signage, publication sales, and from other entertainment events and activities held at the Racetrack.

Operations Review for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026:

Revenues:

Total net revenues for the three months ended ~~September~~March 3031, ~~2025~~2026 were $1813,~~315~~510,000, aan ~~decrease~~increase of $~~969~~368,000, or 52.08%, compared to total net revenues of $1913,~~284~~142,000 for the three months ended ~~September~~March 3031, ~~2024. Total net revenues for the nine months ended September 30,~~ 2025 ~~were $47,122,000, a decrease of $2,463,000, or 5~~.~~0%, compared to total net revenues of $49,585,000 for the nine~~ ~~months ended September 30, 2024.~~ See below for a further discussion of our sources of revenues.

Casino Revenue:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2025

2024

2025

2024

2026

2025

Poker Games Collection

1,~~816~~860,000

1,~~902~~924,000

~~5,567,000~~

~~5,711,000~~

Other Poker Revenue

~~671~~957,000

~~600~~974,000

~~2,181,000~~

~~1,961,000~~

Total Poker Revenue

2,~~487~~817,000

2,~~502~~898,000

~~7,748,000~~

~~7,672,000~~

Table Games Collection

5,~~438~~753,000

65,~~343~~473,000

~~16,565,000~~

~~19,558,000~~

Other Table Games Revenue

1671,000~~,000~~

1821,~~034,~~000

~~3,293,000~~

~~2,550,000~~

Total Table Games Revenue

6,~~438~~424,000

76,~~377~~294,000

~~19,858,000~~

~~22,108,000~~

Total Casino Revenue

89,~~925~~241,000

9,~~879~~192,000

~~27,606,000~~

~~29,780,000~~

The primary source of Casino revenue is a percentage of the wagers received from players as compensation for providing the Casino facility and services, which is referred to as “collection revenue.” Other Poker Revenue and Other Table Games Revenue presented above includes fees collected for the administration of tournaments and the poker jackpot and amounts earned as reimbursement of the administrative costs of maintaining table games jackpot funds, respectively.

As indicated by the table above, total Casino revenue ~~decreased~~increased $~~954~~49,000, or 90.75%, ~~and decreased $2,174,000, or 7.3%,~~ for the three ~~and nine~~ months ended ~~September~~March ~~30,~~ 31 ~~2025~~, ~~respectively,~~ 2026, compared to the same ~~periods~~ period in ~~2024~~2025. The ~~decrease~~increase for the three ~~and nine~~ months ended ~~September~~March 3031 , ~~2025~~2026 can be primarily attributed to ~~both~~an aincrease ~~decrease~~ in drop, due to increased ~~competition,~~ visitation and spend per visit, which was somewhat offset by a lower average collection revenue rate in table games, ~~somewhat~~which ~~offset~~also byresulted anin ~~increase~~a decrease in our other table games revenue ~~due to increases related to our progressive jackpot revenue~~.

Pari-Mutuel Revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025		2024
	2026		2025
Simulcast	$	~~778~~719,000	$	~~809~~781,000	$	~~2,589,000~~	$	~~2,823,000~~
Live Racing		987,000		1,017,000		1,430,000		1,557,000
Other revenue		299,000		297,000
Guest Fees		1,045,000		1,131,000		1,443,000		1,669,000
Total Pari-Mutuel Revenue	$	1,018,000	$	1,078,000
Other revenue		426,000		370,000		1,116,000		1,051,000
Total Pari-Mutuel Revenue	$	3,236,000	$	3,327,000	$	6,578,000	$	7,100,000

Total pari-mutuel revenue decreased $9160,000, or 25.76%, ~~and decreased $522,000, or 7.4%,~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The decrease for three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 can be primarily attributed to ~~both decreased live race days year-over-year and~~ lower simulcast revenues which is related to less overall race days for other race tracks across the country compared to the same ~~periods~~ period in ~~2024~~2025.

1516

Food and Beverage Revenue:

Food and beverage revenue increased $~~405~~224,000, or 13.18%, ~~and increased $269,000, or 3.9%,~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The ~~increases~~increase ~~for~~can ~~both~~be ~~periods are~~ primarily ~~related~~attributed to increased ~~catering~~visitation ~~operations~~ related to hosting more large scale special events and the implementation of a new point-of-sale system that improved speed of service, resulting in increased overall transactions and average spend per customer.

Other Revenue:

Other revenues, consisting of admission revenues, corporate sponsorships, space rentals, and other miscellaneous activities, ~~decreased~~increased $~~330~~155,000, or 1112.15%, ~~and decreased $35,000, or 0.6%,~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The ~~decreases~~increase ~~are~~ is primarily due to increased admission revenue ~~decreases~~ related to ~~concert~~hosting more large scale special events.

Operating Expenses:

Total operating expenses decreased $~~106~~38,000, or 0.63%, ~~and increased $203,000, or 0.5%,~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The following paragraphs provide further detail regarding certain operating expenses.

~~Purse~~Salaries ~~expense decreased $444,000, or 15.9%,~~ and benefits decreased $~~916~~251,000, or 144.20%, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The ~~decreases~~decrease ~~are~~is primarily due to the ~~decreased~~continued ~~Casino~~focus ~~and~~on ~~pari-mutuel~~reducing ~~revenues~~labor ~~noted~~expense ~~above~~and driving operational efficiencies.

~~Salaries~~Depreciation and ~~benefits~~amortization ~~decreased $18,000, or 0.2%, and~~ increased $~~252~~117,000, or 112.26%, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The increase ~~for the nine months ended September 30, 2025~~ is primarily due to ~~annual~~placing ~~wage~~larger ~~increases~~fixed ~~along~~assets ~~with~~into service related to the ~~State~~completion of ~~Minnesota~~large ~~annual~~capital ~~mandated~~improvement ~~increase in the minimum wage~~projects.

~~Depreciation~~Other ~~and~~operating ~~amortization~~expenses increased $91113,000, or 98.79%, ~~and increased $269,000, or 10.0%,~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively,~~ compared to the same ~~periods~~ period in ~~2024~~2025. The ~~increases are~~increase is primarily due to ~~placing~~higher ~~larger~~real ~~fixed~~estate ~~assets~~taxes ~~into service related to our barn relocation~~ and ~~redevelopment~~special ~~plan~~event inpromoter ~~the second quarters of both 2024 and 2025~~fees.

Advertising and marketing costs increased $124,000, or 18.6%, and increased $324,000, or 26.7%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases are primarily due to implementing new Casino promotions to attract and retain new players.

Professional and contracted services increased $36,000, or 1.9%, and increased $146,000, or 3.2%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases are primarily due to increased live racing regulation costs from the Horseracing Integrity and Safety Authority.

Other Income (Loss), Net:

Other loss, net, for the three months ended ~~September~~March 3031, ~~2025~~2026 was $~~408~~705,000, ana ~~increase~~decrease of $~~445~~425,000, compared to other loss, net, of $~~853~~1,130,000 for the three months ended ~~September~~March 3031, ~~2024~~2025. ~~Other~~The decreased loss, is ~~net,~~primarily ~~for~~due ~~the~~to ~~nine months~~increased ~~ended September~~leasing ~~30,~~rates ~~2025 was $2,448,000,~~for aour ~~decrease~~Doran ofCanterbury ~~$639~~equity investments,~~000,~~ resulting ~~compared~~in todecreased overall ~~other~~losses recognized. The loss, ~~net,~~on ofequity ~~$1,808,000~~ investments for the ~~nine~~ three months ended ~~September 30,~~ ~~2024.~~March ~~The~~31, ~~fluctuations compared~~2026 toand ~~the comparable periods of 2024~~2025 ~~are~~is primarily due to ~~timing~~non-cash ofexpenses from depreciation ~~expense~~ and debt service costs from our Doran Canterbury II joint venture as it became fully operational during the second quarter of 2024, somewhat offset by increased lease rates from the Doran Canterbury I joint ventureamortization.

Income Taxes:

The Company recorded a provision for income taxes ~~of $156,000~~ ~~and $772,000 for the three months ended September 30, 2025 and 2024, respectively. The Company recorded a provision for income taxes~~ with aan ~~benefit~~expense of $~~176~~180,000 and ~~expense~~a benefit of $1181,~~364,~~000 for the ~~nine~~ three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively. We record our quarterly provision for income taxes based on our estimated annual effective tax rate for the year. The income tax ~~benefit~~expense for the three ~~nine~~ months ended ~~September 30~~March 31, ~~2025~~2026 compared to the income tax ~~expense~~benefit for the same period in ~~2024~~2025 is primarily due to aan ~~decrease~~increase in income before taxes from operations ~~and a federal interest income tax refund~~ in the first quarter of ~~2025~~2026. Our effective tax rate was 2451.35% and 5537.87% for three ~~and nine~~ months ended ~~September~~March 3031, 2026 and 2025, respectively~~. Our~~, ~~effective~~and ~~tax~~can ~~rate~~vary ~~was~~due ~~27.6%~~to ~~and~~changes ~~28.9% for~~in ~~three~~non-deductible ~~and~~expenses ~~nine months~~such ~~ended~~as ~~September 30,~~lobbying ~~2024, respectively~~fees.

Net Income (Loss):

The Company recorded net income of $~~487~~170,000, or $0.~~10 per basic and diluted share and a net loss of $139,000, or $0.~~03 per basic and diluted share, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025, respectively~~2026. The Company recorded a net ~~income~~ loss of $2299,~~022,~~000, or $0.4006 per basic and diluted share ~~and $3~~,~~358,000,~~ ~~or $0.67 per basic and diluted share,~~ for ~~the~~ three ~~and nine~~ months ended ~~September~~March 3031, ~~2024, respectively~~2025.

1617

EBITDA

To supplement our financial statements, we also provide investors with information about our EBITDA and Adjusted EBITDA, each of which is a non-GAAP measure, which excludes certain items from net income, a GAAP measure. See the table below, which presents reconciliations of these measures to the GAAP equivalent financial measures. We define EBITDA as earnings before interest, income tax expense, and depreciation and amortization. We also compute Adjusted EBITDA, which reflects additional adjustments to Net Income to eliminate unusual or non-recurring items, as well as items relating to our real estate development operations and we believe the exclusion of these items allows for better comparability of our performance between periods and is useful in allowing greater transparency related to a significant measure used by management in its financial and operational decision-making. Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, excluding the impact of our real estate segment, and provides a perspective on the current effects of operating decisions relating to our core, non-real estate business. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025 and 2024~~2026, Adjusted EBITDA excluded stock-based compensation, as(which ~~well~~includes asthe ~~depreciation~~Company's ~~and~~401(k) ~~amortization~~match ~~relating~~in toCompany ~~equity~~stock ~~investments~~contribution), gain on disposal of assets, and ~~interest~~ ~~expense~~depreciation and amortization and interest related to equity investments and their joint ventures. For the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2024~~2025, Adjusted EBITDA ~~also~~ excluded astock-based ~~gain~~compensation ~~transfer~~(which ofincludes ~~land~~the Company's 401(k) match in Company stock contribution), and depreciation and amortization and interest related to equity investments and their joint ventures. Neither EBITDA nor adjusted EBITDA is a measure of performance calculated in accordance with GAAP and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance. EBITDA is presented as a supplemental disclosure because we believe that, when considered with measures calculated in accordance with GAAP, EBITDA and Adjusted EBITDA provide a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes, and it is a widely used measure of performance and a basis for valuation of companies in our industry. Moreover, other companies that provide EBITDA or Adjusted EBITDA information may calculate EBITDA or Adjusted EBITDA differently than we do.

The following table sets forth a reconciliation of net income, a GAAP financial measure, to EBITDA and to adjusted EBITDA (defined above) which are non-GAAP financial measures, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025:

Summary of EBITDA Data

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2025

2024

2025

2024

2026

2025

NET INCOME (LOSS)

~~487~~169,~~283~~878

2(299,~~021,806~~210

)

~~(139,333~~

)

~~3,358,246~~

Interest income, net

(~~528~~511,~~501~~364

)

(~~521~~443,~~579~~281

)

~~(1,451,162~~

)

~~(1,592,676~~

)

Income tax expense (benefit)

~~156~~180,~~000~~391

~~772~~(181,000

)

~~(176,000~~

)

~~1,364,000~~

Depreciation and amortization

1,~~026~~048,~~994~~979

~~936~~931,~~033~~488

~~2,944,900~~

~~2,676,092~~

EBITDA

1887,~~141,776~~884

37,~~208,260~~997

~~1,178,405~~

~~5,805,662~~

Stock-based compensation

~~392~~401,~~994~~649

~~359~~382,~~039~~457

~~1,201,749~~

~~1,074,397~~

Gain on transfer of land

—

(1,732,353

)

—

(1,732,353

)

Gain on disposal of assets

(32,000

)

—

Depreciation and amortization related to equity investments

~~517~~739,~~893~~920

~~605~~871,~~138~~460

~~1,968,919~~

~~1,667,927~~

Interest expense related to equity investments

~~760~~851,~~956~~670

~~840~~838,~~504~~702

~~2,277,031~~

~~2,085,327~~

ADJUSTED EBITDA

2,~~813~~849,~~619~~123

32,~~280~~100,~~588~~616

~~6,626,104~~

~~8,900,960~~

Adjusted EBITDA ~~decreased~~increased $~~467~~749,000, or 1435.~~2%, and decreased $2,275,000, or 25.~~6%, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, compared to the same ~~periods~~ period in ~~2024~~2025. The ~~decrease~~increase in Adjusted EBITDA is primarily due to an overall ~~decrease~~increase in income from operations. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025,~~2026 ~~Adjusted EBITDA as a percentage of net revenue was 15.4%~~ and ~~14.1%~~2025, ~~respectively. For the three and nine months ended September 30, 2024,~~ Adjusted EBITDA as a percentage of net revenue was 1721.01% and 1816.0%, respectively.

Contingencies:

The Company continues to analyze the feasibility of various options related to the development of our underutilized land. The Company may incur substantial costs during the feasibility and predevelopment process, but the Company believes available funds are sufficient to cover the near-term costs. See Liquidity and Capital Resources for more information on liquidity and capital resource requirements.

1718

Liquidity and Capital Resources:

The Company's primary source of liquidity and capital resources have been and are expected to be cash flow from operations and cash available under our revolving line of credit. The Company has a line of credit and security agreement with a financial institution. The agreement was amended as of February 28, 2021 to extend the maturity date to January 31, 2024 and increase its revolving credit line up to $10,000,000. The line of credit was collateralized by all receivables, inventory, equipment, and general intangibles of the Company, as well as a mortgage on certain real property. The credit agreement contains covenants requiring the Company to maintain certain financial ratios. The general credit and security agreement was further amended as of January 31, 2024 to extend the maturity date to January 31, 2027 and reduce the maximum borrowing under the line of credit to $5,000,000. In connection with the amendment, the financial institution terminated a mortgage to release certain Company real property as collateral and the parties entered into a negative pledge agreement under which the Company agreed not to create any liens or encumbrances on certain Company real property. As of ~~September~~March 3031, ~~2025~~2026, the outstanding balance on the line of credit was $0. As of ~~September~~March 3031, ~~2025~~2026, the Company was in compliance with the financial covenants of the credit and security agreement.

The Company’s cash, cash equivalents, and restricted cash balance at ~~September~~March 3031, ~~2025~~2026 was $16,~~990~~357,000 compared to $1315,~~687~~824,000 as of December 31, ~~2024. In August 2023, the Company received approval for a three-phase barn relocation and redevelopment plan totaling approximately $15 million over the course of two years. As of September 30,~~ 2025~~, the Company has substantially completed the project, with minimal expenditures remaining~~. InThe ~~addition, the~~ Company expects to spend the remaining $1,~~452~~198,000 in tax increment financing over the next ~~six~~nine months for the completion of the private redevelopment plan. The Company believes that unrestricted funds available in its cash accounts, short-term investments, amounts available under its revolving line of credit, along with funds generated from operations and potential future land sales, will be sufficient to satisfy its ongoing liquidity and capital resource requirements for regular operations, as well as these planned development expenses for at least the next twelve months. Furthermore, if the Company engages in additional significant real estate development, significant improvements to its facilities, the Racetrack or surrounding grounds, or strategic growth or diversification transactions, additional financing would more than likely be required and the Company may seek this additional financing through joint venture arrangements, through incurring debt, or through an equity financing, or a combination of any of these.

Operating Activities

Trends in our operating cash flows tend to follow trends in operating income but can be affected by changes in working capital, the timing of significant interest payments, and tax payments or refunds. Net cash provided by operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 was $93,~~004~~241,000, primarily as a result of the following: the Company reported a net ~~loss~~income of $~~139~~170,000, depreciation and amortization of $21,~~945~~049,000, a loss from equity investment of $31,~~899~~217,000, and stock-based compensation and 401(k) match totaling $1402,~~202,~~000. The Company also experienced an increase in payable to horsepersons of $1310,~~158,~~000, primarily due to the timing of our live racing season, as well as aincreases ~~decrease~~ in ~~income~~accrued ~~taxes~~wages ~~receivable~~ and ~~prepaid~~payroll ~~income~~ taxes of $1277,~~313,~~000, ~~primarily~~which ~~due~~is totiming ~~the~~related, ~~receipt~~and ofan aincrease ~~federal~~in accrued ~~refund~~property ~~during~~taxes ~~that~~of ~~period~~$328,000. This was partially offset by an increase in accounts receivable of $~~922~~328,000, also due to the timing of our live racing season, a decrease in accounts payable, net of land, buildings, and equipment funded through accounts payable, of $1255,~~103,~~000, and an increase in TIF receivable of $~~673~~239,000, related to the interest accrued, for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026.

Net cash provided by operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~ 2025 was $93,~~281~~374,000, primarily as a result of the following: the Company reported a net ~~income~~loss of $3299,~~358,~~000, depreciation and amortization of $2931,~~676,~~000, a loss from equity investment of $31,~~401~~573,000, and stock-based compensation and 401(k) match totaling $1382,~~074,~~000. ~~This was partially offset by a gain recognized on a transfer of land of $1,732,000.~~ The Company also experienced an increase in payable to horsepersons of $21,~~143~~207,000, primarily due to the timing of our live racing season. This was offset by an increase in accounts receivable of $1486,~~974,~~000, ~~primarily~~an ~~due~~increase toin ~~purse~~TIF ~~payments~~receivable ~~made as part~~ of ~~the~~$206,000, ~~2024 live meet~~ and ~~purse~~a decrease ~~fund~~in ~~contribution~~accounts ~~agreement~~payable, ~~and~~net anof ~~increase~~land, inbuildings, ~~inventory~~ and ~~prepaid~~equipment ~~expenses~~funded through accounts payable, of $1,~~131~~234,000, primarily ~~due~~related to ~~the~~payments ~~prepayment~~for ofour ~~infrastructure~~redevelopment ~~development~~plan, for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025.

Investing Activities

Net cash used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 was $42,~~655~~256,000, primarily due to an equity investment contribution of $1,466,000 to our Doran II joint venture related to their refinancing, additions to land, buildings, and equipment of $3635,~~675,~~000, primarily related to information technology and casino equipment, an increase in TIF eligible improvements of $~~590~~89,000, ~~both of~~ which ~~are~~is associated with the redevelopment plan, an increase in related party receivable of $~~696~~131,000, primarily due to additional ~~member loans and~~ interest accrued related to ~~the~~our member loans, and purchases of short-term investments of $52,~~250~~750,000. This was partially offset by proceeds from the sale of short-term investments of $52,~~500~~750,000.

Net cash used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~ 2025 was $11891,~~637,~~000, primarily due to additions to land, buildings, and equipment of $8859,~~080,~~000, ~~and~~ an increase in TIF eligible improvements of $2135,~~486,~~000, which are associated with the redevelopment ~~barn~~plan, ~~relocation~~an increase in related party receivable of $166,000, primarily due to additional member loans and ~~redevelopment~~interest related to the member loans, and purchases of short-term investments of $2,000,000. The was partially offset by proceeds from the sale of short-term investments of $2,250,000.

Financing Activities

Net cash used in financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 was $1452,~~046,~~000, primarily due to cash dividends paid to shareholders and payments for taxes of equity awards. The Company declared a cash dividend of $0.07 per share payable during the three months ended ~~September 30~~March 31, ~~2025~~2026.

Net cash used in financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 was $1430,~~058,~~000, primarily due to cash dividends paid to shareholders and payments for taxes of equity awards. The Company declared a cash dividend of $0.07 per share payable during the three months ended ~~September~~March 3031, ~~2024~~2025.

Critical Accounting Estimates:

The preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires us to make estimates and judgments that are subject to an inherent degree of uncertainty. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain factors or the susceptibility of such factors to change.

These accounting estimates are described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. Management made no changes to the Company’s critical accounting estimates during the quarter ended ~~September 30~~three months ended March 31, ~~2025~~2026. In applying its critical accounting estimates, management reassesses its estimates each reporting period based on available information. Changes in these estimates did not have a significant impact on earnings for the quarter ended ~~September 30~~three months ended March 31, ~~2025~~2026.

The development and selection of critical accounting estimates, and the related disclosures, have been reviewed with the Audit Committee of our Board of Directors. We believe the current assumptions and other considerations used to estimate amounts reflected in our Condensed Consolidated Financial Statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our Condensed Consolidated Financial Statements, the resulting changes could have a material adverse effect on our financial condition, results of operations and cash flows.

1819

Estimate of the allowance for doubtful accounts - Property Tax Increment Financing "TIF" Receivable

As of ~~September~~March 3031, ~~2025~~2026, the Company recorded a TIF receivable on its Consolidated Balance Sheet of approximately $20,~~161~~315,000, which represents $16,~~141~~394,000 of principal and $43,~~020~~921,000 of interest. The TIF receivable requires significant management estimates and judgement pertaining to whether an allowance for doubtful accounts is necessary. The TIF receivable was generated in connection with the Contract for Private Redevelopment, in which the City of Shakopee has agreed that a portion of the future tax increment revenue generated from the developed property around the Racetrack will be paid to the Company to reimburse it for expenses in constructing public infrastructure improvements. As of December 31, 2025, the Company received its first payment from the City of Shakopee totaling $582,000 related to this receivable.

The Company typically performs an annual collectability analysis of the TIF receivable in the fourth quarter of each year, or more frequently if indicators of ~~potential uncollectability exist. The Company utilizes~~ the ~~assistance~~receivable ~~of a third party~~ to ~~assist~~be ~~with~~potentially ~~the~~uncollectable ~~projected tax increments~~exist. The quantitative analysis includes assumptions based on the market values of the completed development projects within Canterbury Commons, which derives the future projected tax increment revenue. The Company uses the analysis to determine if ~~the~~expected future tax increment revenue will exceed the Company's development costs on infrastructure improvements. As a result of our analysis as well as ~~for~~initial payments received in 2025 with additional payments expected to be received in 2026 from the ~~year~~City ~~ended~~of ~~December~~Shakopee, as of March 31, ~~2024~~2026, management believes the TIF receivable will be fully collectible and no allowance related to this receivable is necessary. ~~There were no indicators of potential uncollectability for the three months ended September 30, 2025.~~

Redevelopment Agreement:

As mentioned above in Note 7 of Notes to Financial Statements, on August 10, 2018, the City of Shakopee, the City of Shakopee Economic Development Authority, and the Company entered into a Redevelopment Agreement in connection with a Tax Increment Financing District (“TIF District”) that the City had approved in April 2018. Under the Redevelopment Agreement, the Company has agreed to undertake a number of specific infrastructure improvements within the TIF District, including the development of public streets, utilities, sidewalks, and other public infrastructure and the City of Shakopee agreed that a portion of the tax revenue generated from the developed property will be paid to the Company to reimburse it for its expense in constructing these improvements. The Company expects to finance its improvements under the Redevelopment Agreement with funds from its current operating resources and existing credit facility and, potentially, third-party financing sources.

On January 25, 2022, the Company received the fully executed First Amendment to the Contract for Private Redevelopment among the Company, the City of Shakopee, and the Shakopee EDA, which is effective as of September 7, 2021. Under the First Amendment and as part of the authorized changes regarding the responsibilities of the Company and the City, improvements on Unbridled Avenue will be primarily constructed by the City of Shakopee. As a result, the total estimated cost of TIF eligible improvements to be borne by the Company was reduced by $5,744,000 to an amount not to exceed $17,592,881.

Forward-Looking Statements:

From time-to-time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, we may make forward-looking statements concerning possible or anticipated future financial performance, prospective business activities or plans that are typically preceded by words such as “believes,” “expects,” “anticipates,” “intends” or similar expressions. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties that could affect our actual results and cause actual results to differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to:

●

We may not be successful at implementing our growth strategy.

●

Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside of our control.

●

We have experienced a decrease in revenue and profitability from live racing.

●

We may not be able to attract a sufficient number of horses and trainers to achieve above average field sizes.

●

We face significant competition, both directly from other racing and gaming operations and indirectly from other forms of entertainment and leisure time activities, which could have a material adverse effect on our operations.

●

Nationally, the popularity of horse racing has declined.

●

A lack of confidence in the integrity of our core businesses could affect our ability to retain our customers and engage with new customers.

●

Horse racing is an inherently dangerous sport and our racetrack is subject to personal injury litigation.

●

Our business depends on using totalizator services.

1920

●

Inclement weather and other conditions may affect our ability to conduct live racing.

●

We are subject to changes in the laws that govern our business, including the possibility of an increase in gaming taxes, which would increase our costs, and changes in other laws may adversely affect our ability to compete.

●

We are subject to extensive regulation from gaming authorities that could adversely affect us.

●

We rely on the efforts of our partner Doran for the development and profitable operation of our Triple Crown Residences at Canterbury Park joint venture.

●

We rely on the efforts of our partner Greystone Construction for a new development project.

●

We may not be successful in executing our real estate development strategy.

●

We are obligated to make improvements in the TIF district and will be reimbursed only to the extent of future tax revenue.

●

We face competition from other real estate developers.

●

We may be adversely affected by the effects of inflation

●

Our success may be affected if we are not able to attract, develop and retain qualified personnel.

●

The payment and amount of future dividends is subject to Board of Director discretion and to various risks and uncertainties.

●

Our information technology and other systems are subject to cyber security risk including misappropriation of customer information or other breaches of information security.

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We process, store, and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and our actual or perceived failure to comply with such obligations could harm our business.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4: CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures:

The Company’s President and Chief Executive Officer, Randall D. Sampson, and Chief Financial Officer, Randy J. Dehmer, have reviewed the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based upon this review, these officers have concluded that the Company’s disclosure controls and procedures are effective.

(b)

Changes in Internal Control over Financial Reporting:

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) that occurred during our fiscal quarter ended ~~September~~March 3031, ~~2025~~2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Not Applicable.

Item 1A. Risk Factors

The most significant risk factors applicable to the Company are described in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. There have been no material changes from the risk factors previously disclosed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Not~~In ~~Applicable.~~the three months ending March 31, 2026, the Company repurchased shares of stock in connection with payment of taxes upon issuance of deferred stock awards issued to employees as follows:

Period	Total Number of Shares Purchased		Average Price Paid Per Share
January 1-31, 2026	-	$	-
February 1-28, 2026	1,196	$	15.61
March 1-31, 2026	3,559	$	15.72
Total	4,755	$	15.69

Item 3. Defaults upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

During the three months ended ~~September 30~~March 31, ~~2025~~2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

~~The~~ 22 information set forth below is included herein for the purpose of providing the disclosure required under "Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers." of Form 8-K.

On November 4, 2025, the Compensation Committee accepted the voluntary proposal of Randall D. Sampson, Chief Executive Officer of Canterbury Park Holding Corporation, to reduce his annual base salary rate for the period of November 9, 2025 to March 28, 2026 by 20%. Payment of Mr. Sampson's base salary at the rate in effect prior to the reduction will resume on March 29, 2026.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).

32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

99.1	Press Release dated ~~November~~May 611, ~~2025~~2026 announcing ~~2025~~2026 ~~Third~~First Quarter Results.

101	The following financial information from Canterbury Park Holding Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended ~~September~~March 3031, ~~2025~~2026, formatted in Inline eXtensible Business Reporting Language XBRL: (i) Condensed Consolidated Balance Sheets as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, (ii) Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~September~~March 3031, ~~2024~~2025, (iii) Condensed Consolidated Statements of Stockholders’ Equity for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~September~~March 3031, ~~2024~~2025, (iv) Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~September~~March 3031, ~~2024~~2025, and (v) Notes to Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements 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.


	Canterbury Park Holding Corporation

Dated: November 7, 2025	/s/ Randall D. Sampson
Dated: May 12, 2026	/s/ Randall D. Sampson
	Randall D. Sampson
	President and Chief Executive Officer (principal executive officer)

Dated: November 7, 2025	/s/ Randy J. Dehmer
Dated: May 12, 2026	/s/ Randy J. Dehmer
	Randy J. Dehmer
	Chief Financial Officer (principal financial officer, principal accounting officer)

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