Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

STATEMENT ON FORWARD-LOOKING INFORMATION

This Report contains certain statements that are, or may deemed to be, "forward-looking statements" regarding our plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future. All statements other than statements of historical fact are "forward-looking statements" for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs and risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our financial statements which have been prepared in conformity with accounting principles generally accepted in the United States of America. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

The following discussion and analysis provides information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read together with our financial statements and the notes to the financial statements, which are included in this Report.

Overview

We are an early-stage, internally managed company and to date our activities have involved the organization of our Company and conducting an offering under Regulation A. From March 9, 2022 to February 18, 2025, we conducted a "Tier 2 Offering" under Regulation A, pursuant to which we sold one 7% USA Real Estate Bond for $1,000 and sold four 12% USA Real Estate Bonds for $195,000. The Company used the proceeds received for general corporate purposes. On November 5, 2025, our Registration Statement on Form S-1, which was filed with the SEC on October 16, 2025 and which offered up to $200,000,000,of our "USA Real Estate Bonds" consisting of (i) "7% USA Real Estate Bonds," (ii) "8% USA Real Estate Bonds," (iii) "10% USA Real Estate Bonds," and (iv) "12% USA Real Estate Bonds" on a best efforts basis at a purchase price of $1,000 each and a minimum investment amount of $10,000 (the "Offering") became effective. On April 23, 2026, we filed Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 and ceased the offering on such date until the Post-Effective Amendment is declared effective by the SEC. As of April 23, 2026, we had sold two 12% USA Real Estate Bonds in the Offering for gross proceeds of $65,000.

On August 3, 2021, the Company was formed as a Puerto Rican corporation under the name USA Opportunity Income Fund, Inc., and issued 3,000 shares of its $0.01 per share par value common stock as founders' shares in exchange for incorporation services provided to Dania Echemendia (1,000 shares), Andrew Murray (1,000 shares), and Richard Meruelo (1,000 shares). On January 26, 2022 the Company changed its name to USA Opportunity Income One, Inc. On May 12, 2025, the Government of Puerto Rico granted to the Company a tax exemption pursuant to Act No. 60-2019, also known as the Puerto Rico Incentives Act or Act 60, ("Act 60").

We are an early-stage company which plans to implement our commercial real estate lending business model after we raise funds pursuant to the Offering. Our business model is centered primarily around originating mortgages and other liens on and interests in real estate. We anticipate that (i) at least 80% of our assets will consist of "mortgages and other liens on and interests in real estate" ("Qualifying Interests"), including, bridge senior secured money lending and mezzanine lending related to real estate and real estate development projects and (ii) not more than 20% of our total assets consist of assets that have no relationship to real estate, assets that have no relationship to real estate constituting no more than 20% of our assets, including, but not limited to, investing in preferred equity interests and up to 5% of the net proceeds for working capital and general corporate purposes, provided the amount and nature of such activities do not cause us to lose our exemption from regulations as an investment company pursuant to the Investment Company Act of 1940, or the "40 Act." Qualifying Interests are assets that represent an actual interest in real estate or are loans or liens "fully secured by real estate" but exclude securities in other issuers engaged in the real estate business. We have not sought or obtained any formal determination or no-action relief from the Securities and Exchange Commission regarding our status under the 40 Act.

Plan of Operations

We are an early-stage company and since inception have worked on organizational and development matters. We have generated limited revenues and we are dependent on funds raised in the Offering, cash on hand, funds raised from any other fundraising efforts, and advances from our shareholders and/or affiliates of our shareholders to provide funds to implement our business model.

General

For the 24 months following the commencement of the Offering, we will seek to sell our USA Real Estate Bonds in the Offering and invest the proceeds in (i) real estate loans to real estate borrowers and real estate development projects, (ii) preferred equity interests related to real estate, and (iii) other permissible activities in accordance with our business model.

In order to operate our Company for 12 months, we estimate that $750,000 in funds will be required. The source of such funds is anticipated to be up to 2% of the net proceeds from our sales of USA Real Estate Bonds in the Offering and the remaining amount is expected to come from income generated from our operations. If we fail to generate $35,000,000 from our sales of USA Real Estate Bonds in the Offering, we may not be able to fully carry out our plan of operations.

We plan to start originating mortgages from real estate borrowers and other liens on and interests in real estate (Qualified Interests), real estate-typed interests, and assets unrelated to real estate in accordance with our business model as we receive funds from selling the USA Real Estate Bonds in the Offering through the efforts of the principals of the Company. The Company currently does not have any contracts with third parties related to the services it intends to provide.

For the next 12 months, we plan to: (i) originate mortgages from real estate borrowers and real estate development projects and other liens on and interests in real estate (Qualified Interests); and (ii) acquire assets unrelated to real estate.

Milestones

Our anticipated timeline for reaching the significant milestones in our plan of operations and the costs associated with our plan are set forth below. These milestones are management estimates only and are subject to material uncertainty.

April 2026 to August 2026:

	●	We aim to raise $35,000,000 in funds from the sales of USA Real Estate Bonds in the Offering.
	●	We anticipate that as part of our fundraising efforts, we plan to meet with groups of potential investors and we estimate the costs of this to be $2,100,000 in commissions and marketing fees.
	●	We anticipate and intend to originate mortgages from real estate borrowers and other liens on and interests in real estate (Qualified Interests), and we estimate the costs of this to be $361,000.
	●	We anticipate and intend to originate assets unrelated to real estate and we estimate the costs of this to be $68,000.

September 2026 to November 2026:

	●	We aim to raise $45,000,000 in funds from the sales of USA Real Estate Bonds in the Offering.
	●	We anticipate that as part of fundraising efforts, we plan to meet with groups of potential investors and we estimate the costs of this to be 2,700,000 in commissions and marketing fees.
	●	We anticipate and intend to originate mortgages from real estate borrowers and other liens on and interests in real estate (Qualified Interests), and we estimate the costs of this to be $473,000.
	●	We anticipate and intend to originate assets unrelated to real estate and we estimate the costs of this to be $89,000.

December 2026 to February 2027:

	●	We aim to raise $120,000,000 in funds from the sales of USA Real Estate Bonds in the Offering.
	●	We anticipate that as part of our fundraising efforts, we plan to meet with groups of potential investors and we estimate the costs of this to be $7,200,000 in commissions and marketing fees.
	●	We anticipate and intend to originate mortgages from real estate borrowers and other liens on and interests in real estate (Qualified Interests), and we estimate the costs of this to be $1,285,000.
	●	We anticipate and intend to originate assets unrelated to real estate and we estimate the costs of this to be $241,000.

We will rely on proceeds from the Offering, cash on hand and advances from our shareholders and/or our shareholders affiliates (as to which we have no assurances) to achieve such milestones. There can also be no assurances that we will be able to receive our desired amount of proceeds or any proceeds from the Offering.

Results of Operations for the three months ended March 31, 2026 and 2025

As of March 31, 2026, the Company had not started making loans and investments. For the three months ended March 31, 2026 and 2025, our total revenues from operations were $0 and $0, respectively. Operating costs for the three months ended March 31, 2026 and 2025 were $66,823 and $45,657, respectively, including mostly organizational fees. The largest category of expenses is shown as "General and administrative expense" which were $60,031 and $39,790, respectively for three months ended March 31, 2026 and 2025. Net loss for the three months ended March 31, 2026 and 2025 was $66,823 and $45,592, respectively.

Liquidity and capital resources

At March 31, 2026 and December 31, 2025, we had cash on hand of $34,360 and $4,995, respectively. We do not have any external sources of capital and are dependent upon advances from our shareholders and/or affiliates of our shareholders to provide funds for our operations until we are able to raise funds from the sale of USA Real Estate Bonds in the Offering or other fundraising efforts. Our shareholders and/or affiliates of our shareholders, however, are under no obligation to advance us any funds. The Company has entered into an oral agreement with a lender (the "Lender"), an affiliate of Richard Meruelo who is currently a 33% shareholder of the Company, to reimburse the Lender for advances made to the Company by the Lender for initial organizational and offering expenses. Such reimbursement is to be made by the Company as cash becomes available to the Company and such reimbursement is planned to be made using a portion of the proceeds of any forthcoming Company offering or other fundraising efforts. The Company will reimburse the Lender a maximum amount of $1,125,000 from any funds that it is able to raise for these advances. As of March 31, 2026 and December 31, 2025, these advances totaled $629,999 and $619,999, respectively. These advances have no maturity date or interest rate. As of May 20, 2026, these advances totaled $639,999.

Potential future sources of capital include secured or unsecured financings from banks or other lenders and establishing additional lines of credit. Note that, currently, we have not identified any additional source of financing, and there is no assurance that such sources of financing will be available on favorable terms or at all.

On February 18, 2025, we terminated the Regulation A offering. In the Regulation A offering, the Company sold one 7% USA Real Estate Bond for $1,000 and sold four 12% USA Real Estate Bonds for $195,000. The Company used the proceeds received for general corporate purposes.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has not yet generated any significant revenue and is still an early-stage company with a limited operating history. The Company has issued $195,000 in USA Real Estate Bonds as of December 31, 2025 and has issued $260,000 in USA Real Estate bonds as of March 31, 2026, has not commenced its primary lending operations, and does not have sufficient cash or a source of revenue sufficient to cover future organizational, offering and operation costs. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

We are dependent on advances from our shareholders and/or affiliates of our shareholders and proceeds from the forthcoming Company Offering or other fundraising efforts to provide capital for our operations. Our shareholders and/or affiliates of our shareholders are not obligated to provide advances to us and there are no assurances that we will be successful in raising proceeds in the forthcoming Company Offering or other fundraising efforts by the Company. The financial statements do not include adjustments related to the recoverability and classifications of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Contingent Liabilities

We may be subject to lawsuits, investigations and claims (some of which may involve substantial dollar amounts) that can arise out of our normal business operations. We would continually assess the likelihood of any adverse judgments or outcomes to our contingencies, as well as potential amounts or ranges of probable losses, and recognize a liability, if any, for these contingencies based on a thorough analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. Because most contingencies are resolved over long periods of time, liabilities may change in the future due to new developments (including new discovery of facts, changes in legislation and outcomes of similar cases through the judicial system), changes in assumptions or changes in our settlement strategy. There were no contingent liabilities as of March 31, 2026.

Income Taxes

USA Real Estate will receive interest income. At the end of the calendar year, investors who are not residents of Puerto Rico, with over $10 of realized interest will receive a form 1099-INT. These will need to be filed in accordance with the United States Tax Code. Since the Company's application for Act 60 has been approved, it is possible that investors who are deemed to be residents of Puerto Rico would not be taxed in accordance with Act 60 for any interest received on the USA Real Estate Bonds. Investor's tax situations will likely vary greatly and all tax and accounting questions should be directed towards a certified public accountant.

As of March 31, 2026, we had no federal and state income tax expense.

Off-Balance Sheet and Other Arrangements

As of March 31, 2026, we did not have any material off-balance sheet arrangements.

Significant Accounting Policies

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or "GAAP." The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are fully described in Note 2 to our financial statements appearing in this Quarterly Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.