Annual Report for Fiscal Year Ending September 30, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following analysis discusses the Company's financial condition as of September 30, 2025, compared with September 30, 2024. The discussion should be read in conjunction with the audited financial statements and the related notes to the financial statements included elsewhere in this Form 10-K. This section is organized as follows:

• Overview: A discussion of the Company's business operations.

• Liquidity and Capital Resources: An analysis of changes in our balance sheets and cash flows, and a discussion of our financial condition and potential sources of liquidity.

• Results of Operations: An analysis and discussion of our financial results comparing our results of operations for the current fiscal year to the prior fiscal year, and of the prior fiscal year compared to the previous fiscal year.

• Critical Accounting Estimates: A discussion of the accounting estimates that we believe are most important to understand the assumptions and judgments incorporated in our reported financial results and forecasts, as well as recent accounting pronouncements that have had or are expected to have a material impact on our results of operations.

• Contractual Obligations: Disclosures related to our contractual obligations, contingent liabilities, commitments and off-balance sheet arrangements as of September 30, 2025.

OVERVIEW

Pismo Coast Village, Inc. operates as a 400-space recreational vehicle resort located along the coast of Central California. The resort offers a full range of services, such as a general store, video arcade, laundromat, and an RV storage operation.

The Company is authorized to issue 1,800 shares of one class, all with equal voting rights and all being without par value. Transfers of shares are restricted by Company bylaws. One such restriction is that transferees must acquire shares with intent to hold the same for the purpose of enjoying camping rights and other benefits to which a shareholder is entitled. Each share of stock is intended to provide the shareholder with the opportunity for 45 nights of free site use per year. However, if the Company is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.

Management is charged with the task of developing sufficient funds to operate the Resort through site sales to general public guests by allocating a minimum of 175 sites for general public use and allocating a maximum of 225 sites for shareholder free use. The other service centers are expected to generate sufficient revenue to support themselves and/or produce a profit.

The Company continues to promote and depend upon recreational vehicle camping as the primary source of revenue. The rental of campsites to the general public provides income to cover expenses, complete capital improvements, and allow shareholders up to 45 free nights camping annually. Additional revenues come from RV storage and spotting, an on-site convenience store, property leases and other ancillary activities such as a restaurant, laundromat, arcade, and recreational activities.

The Central Coast remains a highly sought-after destination for RV enthusiasts actively seeking quality accommodations. RVing continues to provide an affordable and immersive outdoor experience, and the Company is proud to deliver top-tier facilities and services in this popular location.

The 2025 KOA Marketing Hospitality Report reveals a strong growth in the camping industry, driven by younger generations and evolving traveler preferences. Key insights include generational Influence, rise in glamping experiences, economics of camping with modern amenities and a focus on wellness. Gen Z and millennials constitute 61% of new campers, with Gen Z spending the most per day ($266), surpassing baby boomers ($34). Glamping continues to gain popularity, attracting 34% of new campers. Campers spend approximately $49 billion in local communities, with an average daily spend of $156 per person. Wi-Fi is now considered the most important amenity by many campers, with 48% indicating its importance when choosing a campground. And a significant number of campers seek wellness experiences, with activities like forest bathing (83%) and water-based activities (70%) being popular.

These findings reflect a dynamic shift in camping and outdoor hospitality, emphasizing the importance of modern amenities, diverse experiences, and the growing economic impact of the industry. KOA's 2025 report provides essential insights into the outdoor and hospitality sectors, shaping the travel industry today and into the future.

RV storage remains in demand and a primary revenue source for the Company. As of November 2025, the waitlist for new storage clients exceeds 370. To meet this demand, the Company is progressing with plans to develop an estimated 150-unit storage facility on a new 4.42 acre property in Nipomo. RV storage offers customers several advantages, including eliminating the stress of towing, reducing the need to own a tow vehicle, enabling shared use among family members, and providing added convenience.

Continued investment in resort enhancements remains a top priority to ensure a premier experience for both guests and shareholders. The resort is recognized as a leader in the industry, with accolades from reputable organizations such as Good Sam for its exceptional facilities and high standards. The Company's dedication to quality, value, and customer satisfaction is reflected in its success, driven by repeat business, positive word of mouth, and guest referrals.

The Company's marketing strategy focuses on digital platforms, social media content, advertising in national directories, and placements in leading trade magazines. These initiatives are designed to strengthen the Company's visibility and ensure sustained growth in the highly competitive outdoor hospitality market.

LIQUIDITY AND CAPITAL RESOURCES

The Company's policy is to use its ability to generate operating cash flow to meet its expected future needs for internal growth. The Company has continued to maintain sufficient cash so as to not require the use of a short-term line of credit during the off-season period, and the Company expects to be able to do so (although no assurance of continued cash flow can be given).

Net cash provided by operating activities was approximately $2.1 million in the fiscal year ended September 30, 2025, compared to $2.2 million for the fiscal year ended September 30, 2024. The $0.1 million decrease in net cash provided by operating activities can largely be attributed to the timing of payments.

Working capital increased to $10.4 million at the end of fiscal year 2025, compared to $9.4 million at the end of fiscal year 2024. This increase is primarily a result of additional cash from ongoing operations that has been reserved for capital improvements and deferred maintenance.

The Company plans approximately $1.8 million of capital expenditures in fiscal year 2026 to further enhance the Resort facilities and services. The most significant capital project is continued development of the 4.42 acre property in Nipomo for RV Storage. In addition, the Company plans to re-gravel additional campsites and repair the asphalt on resort roads as part of its ongoing facility maintenance programs. Funding for these projects is expected to come from normal operating cash flows and cash reserves. These capital expenditures are expected to increase the Resort's value to its shareholders and the general public.

With the possibility of requiring additional funds for planned capital improvements and the winter season, the Company maintains a $500,000 Line of Credit to ensure funds will be available if required. In anticipation of future large projects, the Board of Directors has instructed management to build operational cash balances. The Company has no other liabilities to creditors other than current accounts payable arising from its normal day-to-day operations and advance Resort rental reservation deposits, none of which are in arrears.

The Board of Directors continues its previously established policy of adopting a stringent conservative budget for fiscal year 2026, which projects a positive cash flow of approximately $1.0 million from operations. This projection is based on paid site occupancy reflecting similar occupancy as experienced in fiscal year 2025. The 2025-26 budget plan includes a $20 per night increase for site rentals. While the Company projects a positive cash flow, this cannot be assured for fiscal year 2026.

RESULTS OF OPERATIONS

The Company's revenue streams originate primarily from three sources: (a) RV camping site rentals, (b) RV storage & towing fees, and (c) retail sales through a general store. In addition, the Company generates revenue from leases of real property, such as our RV retail storefront, RV repair facility and cell towers on our real property and from other ancillary services, such as our restaurant, arcade and laundromat.

The business of the Company is seasonal and is concentrated on prime days of the year which are defined as follows: President's Day weekend, Easter week, Memorial Day weekend, summer vacation months, Labor Day weekend, Thanksgiving week, and Christmas/New Year's week. Occupancy is impacted by weather patterns, as demand decreases during the rainy season and also in years with more rain.

2025 Compared to 2024

		Year ended September 30,
		2025						2024
RV camping site rentals	$	6,881,000			69%		$	6,671,000			69%
RV storage and towing fees		2,013,000			20%			1,896,000			19%
Retail store sales		735,000			7%			734,000			8%
Property lease income		230,000			2%			236,000			2%
Other ancillary services		223,000			2%			190,000			2%
	$	10,082,000			100%		$	9,727,000			100%

RV camping site rental revenues increased $210,000 during the year ended September 30, 2025 compared to 2024, a 3% increase, primarily due to a $5 per night rate increase that was effective October 1, 2024. This increase was partially offset by the impact of 3% lower occupancy during 2025 than 2024. Occupancy was lower in 2025 than 2024 due to weather and the timing of prime holidays. The mix of public guest versus shareholder occupancy was consistent each year.

		Year ended September 30,
		2025						2024
Paid RV camping site nights		72,420			69%			76,100			70%
Unpaid shareholder nights		32,893			31%			32,807			30%
Total Occupancy		105,313			100%			108,907			100%
Occupancy %		72%						75%
Sites Not Occupied		40,687			28%			37,093			25%
Total Capacity		146,000						146,000

RV storage & towing fees increased $117,000 or 6% during the year ended September 30, 2025 compared to 2024 due to a $5 per month rate increase for storage and $5 per one-way towing that was effective January 1, 2025.

Retail store revenue was relatively flat year over year. The company runs the store as a convenience to our guests and strives to maintain consistent pricing, which leads to stable revenue and moderate margins across staples such as groceries, ice, wood, and RV parts.

Property lease income, which is primarily associated with rental of the RV repair facilities, was relatively flat year over year since the facilities available for lease have not changed.

Operating expenses for year ended September 30, 2025 increased $673,000 compared to the prior year. The increase is primarily due to increased professional service fees associated with conducting our required PCAOB audit and legal matters, which increased $453,000 year over year, as well as utility costs, which increased $73,000 year over year and general insurance, which increased $62,000 year over year.

Cost of goods sold decreased $127,000 year over year primarily due to improved inventory control.

Depreciation and amortization expense increased $104,000 year over year as a result of new truck leases entered into during late 2024.

Other income and expense, net increased $24,000 year over year, primarily because of additional interest on increased cash reserves, as well as fluctuating interest rates in 2025 compared to 2024.

Although the supply-demand balance generally remains favorable, future-operating results could be impacted by changes in inflation and the economy that lead to increases or decreases in demand. Depending on the nature of business and economic cycles and trends, rates may be adjusted accordingly, if deemed necessary. Changes in demand could limit the Company's ability to pass through inflationary increases in operating costs as higher rates.

Additionally, increases in transportation and fuel costs or sustained recessionary periods could unfavorably impact future results. However, the Company believes that its financial strength and market presence will enable it to remain extremely competitive. The company intends to continue to market site usage at its highest value and believes that currently this will not negatively impact the Company's ability to capture an optimum market share.

SEASONALITY

The business of the Company is seasonal and is concentrated on prime days of the year which are defined as follows: President's Day weekend, Easter week, Memorial Day weekend, summer vacation months, Labor Day weekend, Thanksgiving week, and Christmas/New Year's week.

Occupancy is impacted by weather patterns, as demand decreases during the rainy season and also in years with more rain. Additionally, occupancy within any particular quarter is impacted by the timing of weekends and holidays within that calendar quarter.

Due the seasonal impact, fall and winter months have lower occupancy and derive less revenue and profit than the rest of the year, as illustrated by the following table which depicts quarterly revenue, occupancy and income (loss) from operations for the past eleven quarters:

Revenue for the three months ended
		2025			2024			2023
March 31	$	1,966,000		$	1,935,000		$	2,013,000
June 30	$	2,911,000		$	2,680,000		$	2,701,000
September 30	$	3,152,000		$	3,027,000		$	2,875,000
December 31				$	2,053,000		$	2,085,000
Paid Occupancy for the three months ended
		2025			2024			2023
March 31		14,571			14,958			15,833
June 30		19,800			20,339			22,665
September 30		22,128			22,914			22,961
December 31					15,921			17,889
Income (loss) from operations for the three months ended
		2025			2024			2023
March 31	$	(187,000	)	$	(13,000	)	$	(33,000	)
June 30	$	810,000		$	832,000		$	653,000
September 30	$	483,000		$	481,000		$	537,000
December 31				$	(161,000	)	$	(60,000	)

Occupancy during the three months ended September 30, 2025 was slightly less than the same period of 2024 due primarily to the timing of weekends, holidays and our prime time season. Revenue for the three months ended September 30, 2025 was slightly up from the same period of 2024, due primarily to the $5 per night rate increase established during 2024. Income from operations for the three months ended September 30, 2025 increased compared to the same period of 2024 due primarily to increased professional advisor fees in late 2024 associated with the change of our annual independent auditor.

Occupancy during the quarter ending December 31, 2025 is expected to be seasonally lower than the three months ended September 30, 2025, because the summer season traditionally ends as of the Labor Day weekend in early-September.

CRITICAL ACCOUNTING ESTIMATES

The Company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, management could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Management bases estimates upon past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting policies and estimates with the audit committee of our board of directors.

Please see Note 2 of Part II, Item 8 of this Annual Report on Form 10-K for the summary of significant accounting policies.

Inventory Allowance

We value our inventory based on our cost. We adjust the value of our inventory to the extent our management determines that our cost cannot be recovered due to obsolescence or other factors. Management considers estimates of future demand and sales prices for each product to determine appropriate inventory reserves and to make corresponding reductions in inventory values to reflect expected net realizable value. In the event of a sudden significant decrease in demand for our products, we could be required to increase our inventory reserve, which would increase our cost of product sales and decrease our gross profit.

Income Taxes

Judgment is required in addressing the future tax consequences of events that have been recognized in our financial statements or tax returns (e.g., realization of deferred tax assets, changes in tax laws, or interpretations thereof). In addition, we are subject to examination of our income tax returns by the IRS and other tax authorities. A change in the assessment of the outcomes of such matters could materially impact our financial statements. We evaluate tax positions taken or expected to be taken on a tax return to determine whether they are more likely than not of being sustained, assuming that the tax reporting positions will be examined by taxing authorities with full knowledge of all relevant information, prior to recording the related tax benefit in our financial statements. If a position does not meet the more likely than not standard, the benefit cannot be recognized. Assumptions, judgment, and the use of estimates are required in determining if the "more likely than not" standard has been met when developing the provision for income taxes. A change in the assessment of the "more likely than not" standard with respect to a position could materially impact our financial statements.

Property and equipment

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management uses judgment to determine whether indications of impairment exist and considers the fact that the company has a long history of profit from the resort operation, which comprises the majority of our land assets, as well as steady profit from our RV storage business and property leases, which use the remainder of our land and building assets. Management also considers factors such as the camping industry, location of the property, market conditions, and property-specific information available at the time of the assessment. The evaluation is performed at the lowest level of identifiable cash flows independent of other assets. An impairment loss would be recognized when the estimated undiscounted future cash flows generated from the assets are less than their carrying amount. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its estimated fair value. Changes in economic and operating conditions impacting the judgments used could result in impairments to our long-lived assets in future periods. Historically, changes in estimates used in the property and equipment and definite-lived intangible assets impairment assessment process have not resulted in impairment charges. There were no indicators of impairment on property and equipment, and accordingly no impairment losses recorded, for the years ended September 30, 2025 and 2024.

CONTRACTUAL OBLIGATIONS

The following table summarizes our contractual obligations as of September 30, 2025:

			Total			Less than 1 year			1 - 2 years			3 - 5 years			Over 5 years
Operating lease obligations 1		$	32,000		$	32,000		$	-		$	-		$	-
Finance lease obligations 1			859,000			181,000			354,000			305,000			19,000
	Total contractual obligations	$	891,000		$	213,000		$	354,000		$	305,000		$	19,000

¹ For further information refer to Note 5 in Part II of this Annual Report on Form 10-K.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no material off balance sheet arrangements.