Canterbury Park Holding Corp

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, approximately20 miles southwest of downtown Minneapolis. In* May**1994,* the Company commenced year-round horse racing simulcast operations and hosted thefirst annual live race meet during the summer of1995. The Company’s live racing operations are a seasonal business, as it typically hosts live race meets each year from* Mayuntil 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 operates24* hours a day,seven days a week and is limited by Minnesota State law to conducting card play on a maximum of80 tables. The Casino currently offers a variety of poker and table games. The Company’sthree 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 approximately140 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, 2025,included in its Annual Report on Form10*-K (the “2025 Form10-K”).

The condensed consolidated balance sheets and the related condensed consolidated statements of operations, stockholders’ equity, and the cash flows for the periods ended* March 31, 2026and2025* 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* March 31, 2026and2025* 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 the2025* Form10-K. There wereno material changes in significant accounting policies during thethree months ended* March 31, 2026*.

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 doesnot have accounts receivable with original maturities greater thanone year. The allowance for credit losses and activity as ofthree months ended* March 31, 2026* and* December 31, 2025wasnot* 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,$829,000 and $0 for thethree months ended* March 31, 2026and2025*, respectively, related to thoroughbred races. Minnesota Statutes provide that amounts transferred into the trust account are the property of the trust andnot of the Company, and therefore these amounts arenot recorded on the Company’s Condensed Consolidated Balance Sheet.

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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:

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 involvetwo performance obligations for those customers earning points under the Company’s loyalty program and a single performance obligation for customers who donot 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 wouldnot 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 areno further performance obligations by the Company.

We havetwo 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 atno 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 thethird-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 thethird-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 thanone year (the “Performance Period”) as compared to Performance Goals established at the beginning of the Performance Period. Beginning in2020, 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 from2020 through2026. Accordingly, there wereno awards outstanding under the LTI Plan during thethree months ended* March 31, 2026and2025*.

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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* March 31, 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 thethree months ended* March 31, 2026* are summarized as follows:

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 overone tofour years. Deferred stock awards represent the right to receive shares of the Company's common stock upon vesting.

During thethree months ended* March 31, 2026*, the Company granted employees deferred stock awards totaling 36,200 shares of common stock, with a vesting term of approximately four years and a fair value of $15.50 per share. During thethree months ended* March**31*,2025, the Company granted employees deferred stock awards totaling 26,400 shares of common stock, with a vesting term of approximately four years and a fair value of $19.50 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 thethree months ended* March 31, 2026* are summarized as follows:

There wereno stock options outstanding to any employee or other person at* March31*,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 $162,000 and $141,000 for thethree months ended* March 31, 2026and2025*, respectively. At* March31*,2026, there was approximately $1,196,000 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 4.0 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 thethree months ended* March 31, 2026and2025*:

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For thethree months ended* March**31*,2025, 24,962 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.

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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, 2021to extend the maturity date to January 31, 2024and 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, 2024to extend the maturity date to January 31, 2027and 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 agreednot* to create any liens or encumbrances on certain Company real property. The Company hadno borrowings under the credit line during thethree months ended* March31*,2026. The outstanding balance on the line of credit was $0 at both* March31*,2026 and* December 31, 2025.*

5. OPERATING SEGMENTS

The Company's chief operating decision maker is its Chief Executive Officer and President, Randall D. Sampson. The Company hasfour 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 the processes to produce those products and services. The Minnesota Racing Commission regulates the horse racing and Casino segments.

Depreciation and amortization, interest, and income taxes are allocated to the segments, butno 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 (in000’s):

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The following are reconciliations of reportable segment revenues, income before income taxes, and assets, to the Company’s consolidated totals (in000’s):

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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 $7,750,000.

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 the2024* live race meet. In an effort to increase field size and improve the quality of racing for the2024 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 a2024 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* maybe 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 the2024* live race meet, the Company recorded a receivable related to the overpayment of2024 purses in the amount of $1,597,463, which was presented as Other long-term receivables on the Company's balance sheet as of* 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 the2025* live race meet. In an effort to maintain field size and improve the quality of racing for the2025 season, the Company guaranteed an additional $500,000 of purse monies to be distributed above the minimum amount defined in Minnesota Statute Chapter240. The parties recognized there was likely to be a significant financial cost to the Company in establishing this2025 thoroughbred purse structure and that to maintain that average purse structure, the Company made an overpayment that* maybe 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 the2025* live race meet, the Company recorded a receivable related to the overpayment of2025 purses in the amount of $500,000.

The combined amounts from the2024 and2025 live race meet agreements of $2,097,463 is 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 thefive* years following the2025 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 actual2025 overpayment amount from those purse supplements.

Asmentioned above, in the event that additional purse revenue is secured within thefive years following the2025 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 actual2024 and2025 overpayment amounts 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 believesno allowance related to this receivable is necessary at both* March 31, 2026and December 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 the2026* live race meet. This2026 live race agreement doesnot include any additional guarantees by the Company to fund or distribute purse monies above the minimum amount defined in statute.

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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, willnot 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 isnot* guaranteed and will depend on future tax revenues generated from the developed property.

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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 thetwo* 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 27, 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 includes321* units, a heated parking ramp, and a clubhouse. As the Company is able to assert significant influence, butnot control, over Doran Canterbury I’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. For thethree months ended* March31*,2026 and2025, 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* March31*,2026 and* December 31, 2025,respectively. See Note9* of Notes to Financial Statements for a summary of member loans to Doran Canterbury I.

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 $7,750,000 as of* March**31*,2026. See Note6. “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 thetwo* 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 additional300* 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, butnot* control, over Doran Canterbury II’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. For thethree months ended* March31*,2026 and2025, the Company recorded losses of$558,000 and$512,000, 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 II, which was $0 and $766,000 at* March31*,2026 and* December 31, 2025,respectively. See Note9* 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 $2,750,000 as of* March**31*,2026. See Note6. “Commitments and Contingencies.”

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Canterbury DBSV Development, LLC

On* June 16, 2020,Canterbury Development LLC, entered into an Operating Agreement with an affiliate of Greystone Construction, as thetwo* 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 approximately13 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, butnot* 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 the13-acre parcel mentioned before. All such investments are accounted for under the equity method by Canterbury DBSV. For thethree months ended* March31*,2026 and2025, the Company recorded losses of $35,000 and $65,000, respectively, on equity method investment related to this joint venture. For thethree months ended* March31*,2026 and2025, the Company also received dividend distributions of $38,000 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 thetwo* 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, butnot* control, over Trackside Investments' operational and financial policies, the Company accounts for the joint venture as an equity method investment. For thethreemonths ended* March**31*,2026, the Company recorded a loss of $22,000 on equity method investment related to this joint venture. As of* March 31, 2025,the proportionate share of Trackside Investments' earnings was immaterial as Trackside Investments wasnot* placed into service until* June 2025.*

Financial information from the financial statements of the Company's joint ventures, Doran Canterbury I, LLC (Doran I), Doran Canterbury II, LLC (Doran II), and all the Company's other joint ventures are summarized as follows:

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.

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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 amountnot* 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 Exhibit10.1 of the Form8-K filed on* January 31, 2022.The Company expects to substantially complete the remaining developer improvements by July 17, 2027and will be reimbursed for costs of the developer improvements incurred byno* 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 isnot* guaranteed, however, and will depend in part on future tax revenues generated from the developed property.

As of* March**31*,2026, the Company recorded a TIF receivable of approximately $20,315,000, which represents $16,394,000 of principal and $3,921,000 of interest. Management believes future tax revenues generated from current development activity will exceed the Company's development costs and thus, management believesno allowance related to this receivable is necessary. As of* December 31, 2025,*the Company recorded a TIF receivable of approximately $19,986,000, which represented $16,305,000 of principal and $3,681,000 of interest.

As of* December 31, 2025,the Company received itsfirst* 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 donot separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short term leases.

As our leases donot 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 donot contain any variable lease payments, material residual value guarantees or any restrictive covenants.

Lease costs related to operating leases were $0 for both thethree months ended* March 31, 2026and2025*. The total lease expenses for leases with a term oftwelve months or less for which the Company electednot to recognize a lease asset or liability was $92,643 and $112,489 for thethree months ended* March 31, 2026and2025*, respectively.

Lease costs included in depreciation and amortization related to our finance leases were $9,046 and $2,870 for thethree months ended* March 31, 2026and2025*, 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:

1 – Finance lease assets are net of accumulated amortization of $72,411 and $63,729 as of March31,2026 and* December 31, 2025,*respectively.

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

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

9. RELATED PARTY RECEIVABLES

Since2019, 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, 2026and December 31, 2025.These member loans bear interest at the rate equal to the Prime Rate plustwo percent per annum and totaled $1,385,000 and $1,284,000 as of March 31, 2026and 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, 2026and 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.