AMREP CORP.

Previous wording

Management’s discussion and analysis of financial condition and results of operations is based on the accounting policies used and disclosed in the 2025 condensed consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of the 2025 Form 10-K. The preparation of the unaudited condensed consolidated financial statements included in this report on Form 10-Q required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual amounts or results could differ from those estimates and assumptions.

Current wording

Management’s discussion and analysis of financial condition and results of operations is based on the accounting policies used and disclosed in the 2026 consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of the 2026 Form 10-K. The preparation of the unaudited condensed consolidated financial statements included in this report on Form 10-Q required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual amounts or results could differ from those estimates and assumptions.

Previous wording

Information concerning the Company’s implementation and the impact of recent accounting standards or updates issued by the Financial Accounting Standards Board is included in the notes to the consolidated financial statements contained in the 2025 Form 10-K and in the notes to the unaudited condensed consolidated financial statements included in this report on Form 10-Q. The Company did not adopt any accounting policies during the nine months ended January 31, 2026 that had a material effect on its unaudited condensed consolidated financial statements.

Current wording

Information concerning the Company’s implementation and the impact of recent accounting standards or updates issued by the Financial Accounting Standards Board is included in the notes to the consolidated financial statements contained in the 2026 Form 10-K and in the notes to the unaudited condensed consolidated financial statements included in this report on Form 10-Q. The Company did not adopt any accounting policies during the three months ended July 31, 2026 that had a material effect on its unaudited condensed consolidated financial statements.

Previous wording

For the three months ended January 31, 2026, the Company had net income of $3,147,000, or $0.58 per diluted share, compared to net income of $717,000, or $0.13 per diluted share, for the three months ended January 31, 2025. For the nine months ended January 31, 2026, the Company had net income of $9,039,000, or $1.68 per diluted share, compared to net income of $8,823,000, or $1.64 per diluted share, for the nine months ended January 31, 2025.

Current wording

For the three months ended July 31, 2026, the Company had net income of $276,000, or $0.05 per diluted share, compared to net income of $4,692,000, or $0.87 per diluted share, for the three months ended July 31, 2025.

Previous wording

During 2026 and 2025, the Company experienced material delays in municipal entitlements, infrastructure availability, approvals and inspections, contractor schedules and utility response times in both the land development business segment and homebuilding business segment, which caused delays in construction and the realization of revenues and increases in cost of revenues. While construction and land costs remain elevated, the Company has been able to partially offset these cost increases through land and home price increases in 2026 and 2025 due to a strong pricing environment, which may not continue. The rising cost of housing due to increases in average sales prices in recent years and the level of mortgage interest rates, coupled with general inflation in the U.S. economy and other macroeconomic factors, have placed pressure on overall housing affordability, negatively affecting demand and have caused many potential homebuyers to pause and reconsider their housing choices. In addition, any tariffs on goods used as inputs in the land development business segment or homebuilding business segment may result in further increases in the cost of housing and average sales prices. Given the affordability challenges and the resulting impact on demand, the Company has provided sales incentives on certain homes, reduced the sale prices of certain homes, reduced the size of lots and homes, opportunistically leased completed homes and slowed the pace of housing starts and land development projects. During 2026 and 2025, the Company reduced the number and scope of its active land development projects and delayed proceeding with certain new land development projects due to market headwinds and uncertainty, a more intentional focus on growing the homebuilding business segment and an increase in entitlement, contractor and infrastructure delays as compared to prior years. This is expected to result in a reduction of revenues from the sale of developed residential land during 2026 and fiscal year 2027 as compared to 2025. Future economic conditions and the demand for land and homes are subject to continued uncertainty due to many factors, including macroeconomic factors, changes in mortgage interest rates, inflation, tariffs, supplies of new and existing home inventory available for sale, labor shortages and other factors. The Company’s past performance may not be indicative of future results.

Current wording

The change in the revenue per acre of undeveloped land for the three months ended July 31, 2026 compared to the prior period was primarily due to the location and mix of land sold. As a result of the Company reducing the number and scope of its active land development projects and delaying certain new land development projects due to market headwinds and uncertainty, a more intentional focus on growing the homebuilding business segment and an increase in entitlement, contractor and infrastructure delays in 2026, the Company expects significantly reduced revenues from the sale of developed residential land during 2027.

Previous wording

As of January 31, 2026, the Company had 67 homes in production, including 15 homes under contract, which homes under contract represented $7,797,000 of expected home sale revenues (less any sales incentives associated with such contracts) when closed, subject to customer cancellations and change orders. As of January 31, 2025, the Company had 101 homes in production, including 16 homes under contract, which homes under contract represented $7,204,000 of expected home sale revenues (less any sales incentives associated with such contracts) when closed, subject to customer cancellations and change orders.

Current wording

As of July 31, 2026, the Company had 83 homes in production, including 23 homes under contract, which homes under contract represented $12,505,000 of expected home sale revenues (less any sales incentives associated with such contracts) when closed, subject to customer cancellations and change orders. As of July 31, 2025, the Company had 62 homes in production, including 24 homes under contract, which homes under contract represented $11,508,000 of expected home sale revenues (less any sales incentives associated with such contracts) when closed, subject to customer cancellations and change orders.

Previous wording

Miscellaneous other revenues for the three and nine months ended January 31, 2026 primarily consist of management fees for homeowners’ associations and residential rental revenues. Miscellaneous other revenues for the three and nine months ended January 31, 2025 primarily consist of extension fees for purchase contracts, management fees for homeowners’ associations and residential rental revenues.

Current wording

In August 2026, the Company ceased providing landscaping services. Miscellaneous other revenues for the three months ended July 31, 2026 primarily consist of management fees for homeowners’ associations, residential rental revenues and billboard advertising revenues. Miscellaneous other revenues for the three months ended July 31, 2025 primarily consist of management fees for homeowners’ associations and residential rental revenues.

Previous wording

Cost of Revenues. The following presents information on cost of revenues (in thousands):

Current wording

Cost of Revenues. The following presents information on cost of revenues (dollars in thousands):

Previous wording

The Company did not record any non-cash impairment charges on real estate inventory or investment assets in the three and nine months ended January 31, 2026 or January 31, 2025. Changes in economic and other market conditions may adversely impact the fair market value of the Company’s real estate inventory or investment assets, which could lead to impairment charges in future periods.

Current wording

The Company did not record any non-cash impairment charges on real estate inventory or investment assets in the three months ended July 31, 2026 or July 31, 2025. Changes in economic and other market conditions may adversely impact the fair market value of the Company’s real estate inventory or investment assets, which could lead to impairment charges in future periods.

Previous wording

Interest Income, net. Interest income, net was $393,000 and $1,308,000 for the three and nine months ended January 31, 2026 and$410,000 and $1,267,000 for the three and nine months ended January 31, 2025. There were no interest or loan costs capitalized in real estate inventory in the three and nine months ended January 31, 2026 or January 31, 2025.

Current wording

Interest Income, net. Interest income, net was $448,000 and $456,000 for the three months ended July 31, 2026 and July 31, 2025. There were no interest or loan costs capitalized in real estate inventory in the three months ended July 31, 2026 and July 31, 2025.

Previous wording

Income Taxes. The Company had a provision for income taxes of $253,000 and $2,541,000 for the three and nine months ended January 31, 2026 related to the amount of income before income taxes during each period. The Company had a provision for income taxes of $125,000 and $1,012,000 for the three and nine months ended January 31, 2025. The provision for income taxes for the three and nine months ended January 31, 2025 related to the amount of income before income taxes during each period and, for the nine months ended January 31, 2025, to the reclassification of the balance of accumulated other comprehensive income (loss) to a benefit for income taxes. In connection with the termination of the Company’s defined benefit pension plan, $1,230,000 of income tax effects that remained in accumulated other comprehensive income were reclassified to a benefit for income taxes during the three months ended January 31, 2025. Refer to Note 11 to the consolidated financial statements contained in the 2025 Form 10-K for detail regarding accumulated other comprehensive income.

Current wording

Income Taxes. The Company had a provision for income taxes of $9,000 and $1,910,000 for the three months ended July 31, 2026 and July 31, 2025 related to the amount of income before income taxes during each period.

Previous wording

Notes payable decreased from $26,000 as of April 30, 2025 to $21,000 as of January 31, 2026 due to principal debt repayments. Refer to Note 6 to the unaudited condensed consolidated financial statements included in this report on Form 10-Q and Note 6 to the consolidated financial statements contained in the 2025 Form 10-K for detail regarding the Company’s notes payable.

Current wording

Notes payable decreased from $18,000 as of April 30, 2026 to $17,000 as of July 31, 2026 due to principal debt repayments. Refer to Note 6 to the unaudited condensed consolidated financial statements included in this report on Form 10-Q and Note 6 to the consolidated financial statements contained in the 2026 Form 10-K for detail regarding the Company’s notes payable.

Previous wording

From April 30, 2025 to January 31, 2026, the change in land inventory was primarily due to land development activity and the acquisition of land offset in part by the sale of land, the change in homebuilding model and completed inventory was primarily due to the sale of homes offset in part by the completion of homes not yet sold and the change in homebuilding construction in process was primarily due to a decrease in the number of homes that started construction.

Current wording

From April 30, 2026 to July 31, 2026, the change in land inventory was primarily due to land development activity and the acquisition of land offset in part by the sale of land, the change in homebuilding model and completed inventory was primarily due to the sale of homes offset in part by the completion of homes not yet sold and the change in homebuilding construction in process was primarily due to an increase in the number of homes that started construction. Refer to Note 2 to the consolidated financial statements contained in the 2026 Form 10-K for detail regarding real estate inventory.

Previous wording

As of January 31, 2026, the Company leased 28 homes to residential tenants. As of April 30, 2025, the Company leased 21 homes to residential tenants. Given the impact on demand as a result of affordability challenges, the Company has opportunistically leased completed homes. Depreciation associated with owned real estate leased or intended to be leased was $54,000 and $142,000 for the three and nine months ended January 31, 2026 and $33,000 and $64,000 for the three and nine months ended January 31, 2025.

Current wording

As of July 31, 2026, the Company leased 30 homes to residential tenants. As of April 30, 2026, the Company leased 28 homes to residential tenants. Given the impact on demand as a result of affordability challenges, the Company has opportunistically leased completed homes. Depreciation associated with owned real estate leased or intended to be leased was $41,000 and $39,000 for the three months ended July 31, 2026 and July 31, 2025. Refer to Note 3 to the consolidated financial statements contained in the 2026 Form 10-K for detail regarding investment assets, net.

Previous wording

The forward-looking statements contained in this report include, but are not limited to, statements regarding (1) the Company’s ability to finance its future working capital, land development, acquisition of land, homebuilding, commercial projects, general and administrative expenses and capital expenditure needs, (2) the Company’s expected liquidity sources, including the availability of bank financing for projects and the utilization of existing bank financing, (3) estimates of the Company’s exposure to warranty claims and liabilities for litigation and legal claims, estimates of the cost to complete of common land development costs and the estimated relative sales values of individual parcels of land in connection with the allocation of common land development costs, (4) the adequacy of warranty reserves to cover the ultimate resolution of any potential liabilities associated with warranty claims, (5) the conditions resulting in homebuyer affordability challenges, (6) the amount of land sale revenues during 2025 and 2026, (7) the backlog of homes under contract and in production and the dollar amount of expected sale revenues when such homes are closed, (8) the categorization of owned real estate leased or intended to be leased, (9) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2016 Equity Compensation Plan, (10) the future issuance of deferred stock units to directors of the Company, (11) the dilution to earnings per share that unvested shares of restricted common stock or shares issuable upon the exercise of stock options may cause in the future and (12) the future business conditions that may be experienced by the Company. The Company undertakes no obligation to update or publicly release any revisions to any forward-looking statement to reflect events, circumstances or changes in expectations after the date of such forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Current wording

sales values of individual parcels of land in connection with the allocation of common land development costs, (4) the adequacy of warranty reserves to cover the ultimate resolution of any potential liabilities associated with warranty claims, (5) the conditions resulting in homebuyer affordability challenges, (6) the amount of land sale revenues during 2026 and 2027, (7) the backlog of homes under contract and in production and the dollar amount of expected sale revenues when such homes are closed, (8) the categorization of owned real estate leased or intended to be leased, (9) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2016 Equity Compensation Plan, (10) the future issuance of deferred stock units to directors of the Company, (11) the dilution to earnings per share that unvested shares of restricted common stock or shares issuable upon the exercise of stock options may cause in the future and (12) the future business conditions that may be experienced by the Company. The Company undertakes no obligation to update or publicly release any revisions to any forward-looking statement to reflect events, circumstances or changes in expectations after the date of such forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.