Real Estate Assets - As of September 30, 2025, the total book value of the company's real estate assets is approximately $113.3 million, down from $127.6 million as of December 31, 2024, reflecting a decrease of about 11.5%[12] - The commercial portfolio includes 10 properties with a book value of approximately $74.2 million, contributing to the overall real estate assets[11] - The model homes portfolio consists of 84 properties with a total square footage of 250,281 sqft, generating an annual rent of approximately $3.65 million[13] - The company recorded an impairment charge of approximately $3.3 million related to the Dakota Center property, which is expected to be sold for $5.125 million[12] - The company reported a gain on sales of real estate amounting to $5,078,302, contributing positively to overall financial results[26] - The company’s model home properties saw an increase in net assets from $37,416,000 in December 2024 to $39,040,072 by September 30, 2025[27] Financial Performance - Total revenue for the three months ended September 30, 2025, was $4,196,142, a decrease of 11.1% compared to $4,723,374 for the same period in 2024[17] - Net loss attributable to common stockholders for the nine months ended September 30, 2025, was $6,026,871, compared to a net loss of $24,800,532 for the same period in 2024[21] - EBITDAre for the three months ended September 30, 2025, was $638,723, an increase from $558,376 in the same period of 2024[20] - Total revenues for the nine months ended September 30, 2025, amounted to $12,700,066, with a breakdown of $450,426 from retail, $9,193,982 from office/industrial, and $2,976,521 from model homes[24] - Net Operating Income (NOI) reached $8,090,256, with adjusted NOI at $8,473,575, reflecting strong operational performance[24] - The company reported a net loss attributable to stockholders of $4,302,021 for the nine months ended September 30, 2025, primarily due to significant interest expenses and impairment charges[26] Debt and Equity - The company reported existing secured debt of $94.6 million, which represents approximately 83.5% of the total book value of real estate assets[9] - The mortgage notes payable total approximately $93.7 million, down from $102.1 million as of December 31, 2024, indicating a reduction of about 8.5%[15] - The total stockholders' equity as of September 30, 2025, is approximately $29.3 million, down from $34.9 million as of December 31, 2024, reflecting a decrease of about 16.1%[15] Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2025, was $380,224, compared to $658,434 for the same period in 2024[19] - Net cash provided by investing activities for the nine months ended September 30, 2025, was $11,433,947, compared to $10,664,729 in 2024[19] - Cash, cash equivalents, and restricted cash at the end of the period on September 30, 2025, was $8,002,915, compared to $7,199,448 at the end of the same period in 2024[19] - Cash and cash equivalents increased to $1,575,384 from $564,922, indicating improved liquidity[27] Operational Costs - Rental operating costs totaled $4,609,810, indicating a cost management strategy amidst rising operational expenses[26] - General and administrative expenses were reported at $4,335,697, reflecting ongoing operational costs[26] Leasing and Tenant Activity - The company has leased approximately 69% of the space previously occupied by Halliburton in the Shea Center II property, which represents about 31% of the total space[12] - The company is actively pursuing third-party tenants for the remaining space in the Shea Center II property, although there is no guarantee of success in signing new tenants[12] Funds from Operations (FFO) - The company emphasizes the importance of Funds from Operations (FFO) as a key performance metric, which excludes certain non-core items to provide a clearer view of operational performance[30] - FFO for the three months ended September 30, 2025, was $(839,846), compared to $(566,910) in the same period of 2024[21] - Core FFO for the nine months ended September 30, 2025, was $(1,627,404), compared to $(995,236) in 2024[21] Asset Management - Total assets decreased from $142,569,650 in December 2024 to $127,808,885 by September 30, 2025, highlighting a contraction in asset base[27] - The company has recorded an increase in the weighted average number of common shares outstanding for the three months ended September 30, 2025, was 1,215,943, compared to 1,247,657 in 2024[21]

SAN DIEGO, CA / ACCESS Newswire / November 12, 2025 / Presidio Property Trust, Inc. (Nasdaq:SQFT, SQFTP, SQFTW) (the "Company"), an internally managed, diversified real estate investment trust ("REIT"), today reported earnings for its three months ended September 30, 2025. "We fought through the worst office market in recent years to put Presidio in a position to capitalize when conditions normalized-and here we are, as industry headwinds are turning into tailwinds. ...

Financial Performance - Total revenue for Q3 2025 was $4,196,142, a decrease of 11.1% from $4,723,374 in Q3 2024[19] - Rental income for the nine months ended September 30, 2025, was $12,423,048, down 9.7% from $13,754,740 in the same period of 2024[19] - Net loss attributable to Presidio Property Trust, Inc. common stockholders for Q3 2025 was $1,862,027, compared to a net loss of $6,645,466 in Q3 2024[19] - The net loss for the nine months ended September 30, 2025, is $5,276,525, compared to a net income of $2,265,352 for the previous period[21] - Total revenues for the nine months ended September 30, 2025, were $12,700,066, with net operating income (NOI) of $8,090,256[125] - Adjusted NOI for the nine months ended September 30, 2025, was $8,473,575, compared to $12,398,589 for the same period in 2024[125] - The total costs and expenses for the same period were $17,064,187, leading to a net loss attributable to stockholders of $(4,302,021)[134] - The company reported a net income loss of $(1,290,848) for the three months ended September 30, 2025, highlighting challenges in profitability despite revenue generation[138] Assets and Liabilities - Total assets as of September 30, 2025, were $127,808,885, a decrease of 10.4% from $142,569,650 as of December 31, 2024[17] - Total liabilities decreased to $98,461,525 as of September 30, 2025, from $107,624,495 as of December 31, 2024, reflecting a reduction of 8.8%[17] - The company’s total stockholders' equity decreased to $29,347,360 as of September 30, 2025, from $34,945,155 as of December 31, 2024[17] - As of September 30, 2025, total equity stands at $29,347,360, with stockholders' equity of $21,098,683[21] - Cash and cash equivalents as of September 30, 2025, were $8,002,915, slightly down from $8,036,496 as of December 31, 2024[17] Real Estate Operations - The company reported a gain on sales of real estate of $300,975 for Q3 2025, compared to $361,151 in Q3 2024[19] - Impairment of goodwill and real estate assets for the nine months ended September 30, 2025, was $4,427,245, significantly higher than $893,939 in the same period of 2024[19] - The company sold two commercial properties, Union Town Center and Research Parkway, for approximately $15.9 million in February 2025, recognizing a net gain of approximately $4.5 million[77] - The company owns a diverse portfolio of real estate assets, including eight office buildings and one industrial property totaling approximately 758,175 rentable square feet[78] - The company recorded an impairment charge for model homes totaling $0.2 million for the nine months ended September 30, 2025, reflecting lower than expected sales prices[82] Cash Flow and Financing - Cash flows from operating activities showed a net cash used of $380,224 for the nine months ended September 30, 2025, compared to $658,434 in the prior year, reflecting better operational efficiency[25] - The company reported net cash provided by investing activities of $11,433,947 for the nine months ended September 30, 2025, up from $10,664,729 in 2024, driven by proceeds from sales of real estate[25] - Proceeds from mortgage notes payable, net of issuance costs, amounted to $18,942,396 in 2025, compared to $13,602,291 in 2024, indicating increased financing activity[25] - Future principal payments due on mortgage notes payable total approximately $10.4 million in the last two quarters of 2025 and $21.1 million in 2026[36] - The company has identified potential future sources of liquidity including existing cash, cash flows from operations, and refinancing of existing mortgages[35] Stockholder Information - Dividends paid to Series D preferred stockholders amount to $574,096 for the period ending March 31, 2025[21] - Total dividends paid to Series D Preferred stockholders during the three months ended September 30, 2025, were approximately $0.6 million, consistent with the same period in 2024[108] - The Company completed a secondary offering of 920,000 shares of Series D Preferred Stock, generating approximately $20.5 million in net proceeds[100] - Holders of Series D Preferred Stock are entitled to cumulative cash dividends at a rate of 9.375% per annum, equivalent to $2.34375 per share[102] - The Company executed a 1-for-10 reverse stock split effective May 19, 2025, adjusting all historical share amounts accordingly[110] Strategic Initiatives - The company has a strategy to maintain its REIT status by distributing at least 90% of its taxable income to stockholders[30] - The company expects to fund operations through at least the next twelve months with a combination of working capital and refinancing capabilities[37] - The Company is monitoring economic factors such as interest rate increases and geopolitical conflicts that could impact its commercial real estate portfolio[98] - The Company has entered into a cooperation agreement with an activist stockholder group, resulting in the appointment of a new director[95] Compliance and Governance - The company is in compliance with the Fixed Charge Coverage Ratio covenant of 1.10 to 1.00 as of September 30, 2025[88] - The Company has a charter restriction preventing any person from owning more than 9.8% of the outstanding shares of common stock, with exceptions granted to certain executives[109] - The company has not experienced any material litigation or environmental liabilities that would affect its financial condition[96][97]

Core Viewpoint - Presidio Property Trust, Inc. has declared a dividend on its 9.375% Series D Cumulative Redeemable Perpetual Preferred Stock for the last quarter of 2025 [1] Group 1: Dividend Announcement - The Board of Directors has authorized a dividend for the months of October, November, and December 2025 [1] - The October 2025 dividend will be $0.19531 per share, payable in cash on November 17, 2025 [1] - Shareholders of record for the Series D Preferred Stock must be on record by the dividend record date of October 31, 2025 [1]

Core Insights - Presidio Property Trust, Inc. reported the sale of three homes in Q3 2025 for approximately $1.6 million, indicating active asset management and liquidity generation [1] - The homes were acquired between 2022 and 2023 at a total cost of around $1.7 million, reflecting a slight loss on the sales [1] Financial Performance - Total sales from the three homes amounted to approximately $1.6 million [1] - The total acquisition price for these homes was approximately $1.7 million, resulting in a loss of about $100,000 on the sales [1]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - 89bio, Inc. (ETNB) increased by 83% to $14.84 [3] - Aptevo Therapeutics Inc. (APVO) rose by 75% to $2.47 [3] - Psyence Biomedical Ltd. (PBM) saw a 29% increase to $4.82 [3] - Beam Global (BEEM) gained 27% reaching $3.23 [3] - MicroAlgo Inc. (MLGO) was up 14% at $13.06 [3] - Akero Therapeutics, Inc. (AKRO) increased by 12% to $47.50 [3] - Hyperion DeFi, Inc. (HYPD) rose by 11% to $13.69 [3] - Sonnet BioTherapeutics Holdings, Inc. (SONN) increased by 11% to $7.85 [3] - FuelCell Energy, Inc. (FCEL) was up 9% at $8.34 [3] - Robo.ai Inc. (AIIO) gained 6% to $2.05 [3] Premarket Losers - Presidio Property Trust, Inc. (SQFT) decreased by 14% to $7.58 [4] - Aeluma, Inc. (ALMU) fell by 10% to $15.18 [4] - FGI Industries Ltd. (FGI) dropped 10% to $7.65 [4] - Lazydays Holdings, Inc. (GORV) was down 9% at $2.26 [4] - StableX Technologies, Inc. (SBLX) decreased by 8% to $5.40 [4] - Artelo Biosciences, Inc. (ARTL) fell by 8% to $4.48 [4] - SciSparc Ltd. (SPRC) decreased by 8% to $4.10 [4] - Cracker Barrel Old Country Store, Inc. (CBRL) was down 7% at $45.75 [4] - Columbus Circle Capital Corp I (BRR) fell by 7% to $9.42 [4] - Visionary Holdings Inc. (GV) decreased by 7% to $2.58 [4]

Core Insights - Presidio Property Trust has successfully refinanced the mortgage loan on its One Park Center property for $6.1 million at an interest rate of 6.83% with a five-year term [1][2] - The refinancing includes interest-only payments for the first six months and has no prepayment penalty [1] - This marks the second office property loan refinancing completed by the company within two months, following the Genesis Plaza property refinancing in August [2] Company Overview - Presidio Property Trust is an internally managed, diversified real estate investment trust (REIT) with holdings in model home properties leased to homebuilders, as well as office, industrial, and retail properties [3] - The company's model homes are primarily located in sun belt states, while its office, industrial, and retail properties are mainly situated in Colorado, with additional locations in Maryland, North Dakota, Texas, and Southern California [3]

[Supplemental Financial Information](index=1&type=section&id=Supplemental%20Financial%20Information) This section outlines forward-looking statements, emphasizing inherent risks and uncertainties that could cause actual results to differ [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section outlines the nature of forward-looking statements, emphasizing inherent risks and uncertainties that could cause actual results to differ materially from projections - Forward-looking statements involve risks and uncertainties, potentially causing actual results to differ materially from expectations[4](index=4&type=chunk)[5](index=5&type=chunk) - Key factors influencing actual results are detailed in the Annual Report on Form 10-K and Quarterly Report on Form 10-Q, including global, regional, or local political, economic, business, competitive, market, and regulatory factors[4](index=4&type=chunk)[5](index=5&type=chunk) [Company Overview](index=3&type=section&id=COMPANY%20OVERVIEW) Provides an overview of the company's corporate structure, real estate portfolio, asset value, and debt [Corporate Information](index=3&type=section&id=Corporate%20Information) Presidio Property Trust, Inc. is an internally managed real estate company focused on acquiring and managing office, industrial, and model home properties Corporate Profile | Headquarters | San Diego, CA | |---|---| | Founded | 1999 | | Key Geographies | CA, CO, MD, ND & TX | | Employees | 14 | - Presidio Property Trust, Inc. (formerly NetREIT) was founded in 1999 and is an internally managed real estate company[10](index=10&type=chunk) - The company focuses on commercial real estate (office and industrial) in overlooked, regionally dominant markets and generates fees/rental income from model homes[10](index=10&type=chunk) [Portfolio Summary](index=3&type=section&id=Portfolio%20Summary) The company's portfolio includes 8 office, 1 retail, 1 industrial property, and 87 model homes, totaling over 1 million square feet Portfolio Summary (Number / Square Footage) | Office | 8 properties / 608,076 sqft. | |---|---| | Retail | 1 properties / 10,500 sqft. | | Industrial | 1 property / 150,099 sqft. | | Model Homes | 87 homes / 260,227 sqft | [Portfolio Value & Debt](index=3&type=section&id=Portfolio%20Value%20%26%20Debt) As of June 30, 2025, the portfolio's book value was $114.6 million, with secured debt totaling $94.6 million Portfolio Value & Debt (June 30, 2025) | Book Value | $114.6 million | |---|---| | Existing Secured Debt | $94.6 million | - The commercial portfolio alone has a book value of approximately **$78.5 million**[10](index=10&type=chunk) [Real Estate Portfolio Details](index=4&type=section&id=Real%20Estate%20Portfolio%20Details) Details the commercial and model homes real estate portfolios, including asset values and impairment charges [Commercial Portfolio](index=4&type=section&id=Commercial%20Portfolio) The commercial portfolio's net assets decreased to $73.73 million by June 30, 2025, due to property sales and impairment charges Commercial Properties Real Estate Assets and Lease Intangibles, Net | Property Name | June 30, 2025 | December 31, 2024 | |---|---|---| | Genesis Plaza | $7,274,090 | $7,363,571 | | Dakota Center | $4,838,139 | $8,154,951 | | Grand Pacific Center | $8,332,564 | $8,413,926 | | Arapahoe Center | $9,058,658 | $9,298,534 | | Union Town Center | — | $8,922,943 | | West Fargo Industrial | $6,469,043 | $6,599,953 | | 300 N.P. | $1,990,914 | $1,963,000 | | Research Parkway | — | $2,220,284 | | One Park Center | $5,482,703 | $5,580,950 | | Shea Center II | $17,595,866 | $18,820,370 | | Mandolin | $4,554,707 | $4,600,562 | | Baltimore | $8,129,102 | $8,241,456 | | **Commercial properties total** | **$73,725,786** | **$90,180,500** | - Union Town Center and Research Parkway were sold in February 2025 for a combined **$16.95 million**, resulting in a net gain of approximately **$4.2 million**[12](index=12&type=chunk) - Dakota Center was impaired by **$3.3 million** as of June 30, 2025, due to uncertainties in the Fargo market and a pending sale to settle a non-recourse loan[12](index=12&type=chunk) - Shea Center II incurred an impairment charge of approximately **$0.9 million** during Q2 2025, following the non-renewal of a major tenant (Halliburton) in December 2022[12](index=12&type=chunk) [Model Homes Portfolio](index=6&type=section&id=Model%20Homes%20Portfolio) The model homes portfolio comprises 87 properties generating $3.79 million in annual rent, with Texas as the largest market, and incurred a $0.1 million impairment charge Model Homes Portfolio Summary (June 30, 2025) | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | % Annual Rent | |---|---|---|---|---|---| | Alabama | 10 | 23,835 | 9.2% | $347,064 | 9.2% | | Arizona | 2 | 6,822 | 2.6% | $149,196 | 3.9% | | Tennessee | 2 | 5,534 | 2.1% | $89,304 | 2.4% | | Texas | 73 | 224,036 | 86.1% | $3,207,360 | 84.5% | | **Total** | **87** | **260,227** | **100.0%** | **$3,792,924** | **100.0%** | - An impairment charge of **$0.1 million** was recorded for model homes during the three and six months ended June 30, 2025, attributed to short hold periods and builder style changes[13](index=13&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Presents consolidated balance sheets, statements of operations, and cash flows, highlighting key financial changes and performance [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $128.4 million by June 30, 2025, driven by reduced real estate assets, while liabilities and equity also declined Key Balance Sheet Data | Metric | June 30, 2025 | December 31, 2024 | |---|---|---| | Total Assets | $128,400,413 | $142,569,650 | | Real estate assets, net | $114,576,297 | $127,596,500 | | Real estate assets held for sale, net | $7,286,923 | $22,185,742 | | Total Liabilities | $99,023,400 | $107,624,495 | | Mortgage notes payable, total net | $94,603,804 | $102,094,094 | | Total Equity | $29,377,013 | $34,945,155 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenue decreased to $8.5 million, but net loss significantly improved to $(4.16) million for the six months ended June 30, 2025 Key Income Statement Data (Six Months Ended June 30) | Metric | 2025 | 2024 | |---|---|---| | Total revenue | $8,503,925 | $9,376,603 | | Total costs and expenses | $12,761,010 | $10,242,619 | | Impairment of goodwill and real estate assets | $4,344,332 | $196,793 | | Gain on sales of real estate, net | $4,777,327 | $2,829,998 | | Net loss in Conduit Pharmaceuticals marketable securities | $(184,459) | $(13,888,667) | | Net loss attributable to Presidio Property Trust, Inc. common stockholders | $(4,164,844) | $(18,155,066) | | Basic & Diluted EPS | $(3.42) | $(14.69) | - Net loss attributable to common stockholders improved significantly by **77.0% YoY** for the six months ended June 30, 2025, primarily driven by a substantial reduction in losses from marketable securities[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to $(1.01) million, while financing activities used more cash for the six months ended June 30, 2025 Key Cash Flow Data (Six Months Ended June 30) | Metric | 2025 | 2024 | |---|---|---| | Net cash used in operating activities | $(1,012,227) | $(1,301,028) | | Net cash provided by investing activities | $11,372,797 | $12,960,482 | | Net cash used in financing activities | $(11,111,977) | $(9,635,001) | | Real estate acquisitions | $(9,444,465) | $(5,740,918) | | Proceeds from sales of real estate, net | $21,544,343 | $20,058,923 | | Repayment of mortgage notes payable | $(14,014,678) | $(17,282,249) | | Repurchase of Series A Common Stock, at cost | $(1,526,551) | $(7,613) | | Cash, cash equivalents and restricted cash - end of period | $7,285,089 | $8,534,881 | - Cash and cash equivalents decreased by **$751,407** for the six months ended June 30, 2025, compared to an increase of **$2,024,453** in the prior year period[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) Reconciles and defines key non-GAAP financial measures: EBITDAre, FFO, and Core FFO, highlighting adjustments from GAAP net income [EBITDAre Reconciliation](index=10&type=section&id=EBITDAre%20Reconciliation) EBITDAre significantly improved to $1.06 million for the six months ended June 30, 2025, driven by reduced marketable securities losses and higher real estate gains EBITDAre Reconciliation (Six Months Ended June 30) | Metric | 2025 | 2024 | |---|---|---| | Net (loss) income attributable to common stockholders | $(4,164,844) | $(18,155,066) | | Interest Expense | $2,988,341 | $3,041,051 | | Depreciation and Amortization | $2,453,531 | $2,699,901 | | Asset Impairment | $4,344,332 | $196,793 | | Net loss (gain) on sale of real estate | $(4,777,327) | $(2,829,998) | | Net change in marketable securities | $184,459 | $13,889,227 | | Income Taxes | $28,501 | $160,586 | | **EBITDAre** | **$1,056,993** | **$(997,506)** | - EBITDAre showed a positive turnaround, increasing from a loss of **$(997,506)** in H1 2024 to a gain of **$1,056,993** in H1 2025[21](index=21&type=chunk) [FFO and Core FFO Reconciliation](index=11&type=section&id=FFO%20and%20Core%20FFO%20Reconciliation) FFO improved to $(1.62) million, while Core FFO declined to $(1.08) million for the six months ended June 30, 2025 FFO and Core FFO Reconciliation (Six Months Ended June 30) | Metric | 2025 | 2024 | |---|---|---| | Net (loss) income attributable to common stockholders | $(4,164,844) | $(18,155,066) | | Depreciation and amortization | $2,455,796 | $2,702,388 | | Impairment of real estate assets | $4,344,332 | $196,793 | | Net change in Conduit marketable securities | $184,459 | $13,889,227 | | Loss (gain) on sale of real estate assets, net | $(4,777,327) | $(2,829,998) | | **FFO** | **$(1,619,381)** | **$(2,225,910)** | | Restricted stock compensation | $544,376 | $885,029 | | Cost associated with Zuma Capital Management | - | $565,534 | | **Core FFO** | **$(1,075,005)** | **$(775,347)** | | Core FFO / Wgt Avg Share | $(0.88) | $(0.63) | - FFO improved by **27.2% YoY**, while Core FFO declined by **38.6% YoY** for the six months ended June 30, 2025[22](index=22&type=chunk) [Definitions of Non-GAAP Measures](index=14&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines key non-GAAP financial measures: EBITDAre, FFO, and Core FFO, noting their supplementary nature and calculation limitations - EBITDAre is defined as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs[28](index=28&type=chunk) - FFO (Funds From Operations) is a non-GAAP measure defined as net income or loss (GAAP), excluding gains/losses from property sales, hedge ineffectiveness, certain acquisition/lease costs, plus depreciation/amortization and impairment charges, with adjustments for non-consolidated REITs[29](index=29&type=chunk) - Core FFO adjusts NAREIT's FFO for non-core items like acquisition costs, loss on early debt extinguishment, changes in fair value of earn-outs/contingent consideration, non-cash warrant dividends, other non-recurring expenses, and stock-based compensation amortization[31](index=31&type=chunk) [Segment Data](index=12&type=section&id=SEGMENT%20DATA) Analyzes financial performance and asset allocation across Retail, Office/Industrial, and Model Homes segments [Segmented Operating Performance](index=12&type=section&id=Segmented%20Operating%20Performance) Office/Industrial generated the highest revenue but largest net loss, while Retail reported a significant net income from property sales for the six months ended June 30, 2025 Total Revenues by Segment (Six Months Ended June 30, 2025) | Segment | Total Revenues | |---|---| | Retail | $356,852 | | Office/Industrial | $6,150,163 | | Model Homes | $1,933,496 | | Corporate and Other | $63,414 | | **Total** | **$8,503,925** | Net Operating Income (NOI) and Adjusted NOI by Segment (Six Months Ended June 30, 2025) | Segment | NOI | Adjusted NOI | |---|---|---| | Retail | $251,460 | $251,460 | | Office/Industrial | $2,982,301 | $2,982,301 | | Model Homes | $1,835,399 | $2,281,945 | | Corporate and Other | $359,517 | $359,517 | | **Total** | **$5,428,677** | **$5,875,223** | Net Income (Loss) by Segment (Six Months Ended June 30, 2025) | Segment | Net Income (Loss) | |---|---| | Retail | $4,211,872 | | Office/Industrial | $(5,029,197) | | Model Homes | $393,272 | | Corporate and Other | $(2,246,652) | | **Total** | **$(2,670,705)** | [Segmented Assets](index=12&type=section&id=Segmented%20Assets) Office/Industrial properties remain the largest asset segment at $70.23 million, while Retail assets significantly decreased due to property sales Total Assets by Reportable Segment | Segment | June 30, 2025 | December 31, 2024 | |---|---|---| | Office/Industrial Properties | $70,228,381 | $76,292,662 | | Model Home Properties | $41,464,138 | $38,166,964 | | Retail Properties | $4,703,901 | $16,673,605 | | **Total assets for reportable segments** | **$116,396,420** | **$131,133,231** | - The significant decrease in Retail Properties assets is likely due to the sale of Union Town Center and Research Parkway, which were previously listed under the commercial portfolio and contributed to a gain on sales of real estate in the Retail segment's operating performance[12](index=12&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)

[Cautionary Language Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20LANGUAGE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements involve risks and uncertainties, including real estate investment, competition, and economic challenges - Forward-looking statements in this report involve risks and uncertainties that could cause actual results to differ materially and adversely from those anticipated[12](index=12&type=chunk) - Key risk factors include inherent risks of real estate investments, **significant competition**, decreased demand for commercial space, tenant payment failures, challenging economic conditions, inability to generate sufficient cash for dividends/debt, adverse changes in financing markets, potential uninsured losses, and failure to qualify as a REIT[12](index=12&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) [Part I. Financial Information](index=6&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's financial analysis [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements and related notes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's consolidated balance sheets, detailing assets, liabilities, and equity | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :-------------- | :---------------- | | Total Assets | $128,400,413 | $142,569,650 | | Real estate assets, net | $114,576,297 | $127,596,500 | | Real estate assets held for sale, net | $7,286,923 | $22,185,742 | | Cash, cash equivalents and restricted cash | $7,285,089 | $8,036,496 | | Total Liabilities | $99,023,400 | $107,624,495 | | Mortgage notes payable, total net | $94,603,804 | $102,094,094 | | Total Equity | $29,377,013 | $34,945,155 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the company's consolidated statements of operations, detailing revenues, expenses, and net loss | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenue | $4,378,740 | $4,586,541 | $8,503,925 | $9,376,603 | | Total costs and expenses | $8,215,343 | $5,148,026 | $12,761,010 | $10,242,619 | | Net loss | $(5,047,620) | $(11,378,675) | $(2,670,705) | $(15,116,470) | | Net loss attributable to common stockholders | $(5,850,621) | $(12,391,371) | $(4,164,844) | $(18,155,066) | | Basic & Diluted EPS | $(5.13) | $(9.97) | $(3.42) | $(14.69) | | Gain on sales of real estate, net (6 months) | N/A | N/A | $4,777,327 | $2,829,998 | | Net loss in Conduit Pharmaceuticals marketable securities (6 months) | N/A | N/A | $(184,459) | $(13,888,667) | [Consolidated Statements of Changes in Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) This section presents the company's consolidated statements of changes in equity, detailing movements in total equity, net loss, and dividends | Metric | December 31, 2024 | June 30, 2025 | Change | | :------------------------------------- | :---------------- | :-------------- | :----- | | Total Equity | $34,945,155 | $29,377,013 | -$5,568,142 | | Net (loss) income (6 months) | N/A | $(5,276,525) | N/A | | Dividends to Series D preferred stockholders (6 months) | N/A | $(1,153,671) | N/A | | Repurchase of Series A Common Stock, at cost (6 months) | N/A | $(1,507,999) | N/A | | Repurchase of Series D preferred stock, at cost (6 months) | N/A | $(327,787) | N/A | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's consolidated statements of cash flows, detailing operating, investing, and financing activities | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :------------------------------------- | :--------------------------- | :--------------------------- | :----- | | Net cash used in operating activities | $(1,012,227) | $(1,301,028) | $288,801 | | Net cash provided by investing activities | $11,372,797 | $12,960,482 | -$1,587,685 | | Net cash used in financing activities | $(11,111,977) | $(9,635,001) | -$1,476,976 | | Net (decrease) increase in cash equivalents and restricted cash | $(751,407) | $2,024,453 | -$2,775,860 | | Proceeds from sales of real estate, net | $21,544,343 | $20,058,923 | $1,485,420 | | Repayment of mortgage notes payable | $(14,014,678) | $(17,282,249) | $3,267,571 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the company's accounting policies, recent transactions, and financial position [Note 1. Organization and Basis of Presentation](index=10&type=section&id=Note%201.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's structure as an internally-managed REIT and key corporate events - Presidio Property Trust, Inc. is an internally-managed real estate investment trust (REIT) with holdings in office, industrial, retail, and model home properties[26](index=26&type=chunk) - The company owns **10 commercial properties** and operates through consolidated limited partnerships (NetREIT Partnerships and Model Home Partnerships)[26](index=26&type=chunk)[31](index=31&type=chunk) - The company has elected to be taxed as a REIT and utilizes Taxable REIT Subsidiaries (TRSs) for certain activities[29](index=29&type=chunk)[30](index=30&type=chunk) - A fixed-price self-tender offer for Series A common stock was completed on **May 5, 2025**, purchasing **214,412 shares** for approximately **$1.46 million**[32](index=32&type=chunk) - Effective **May 19, 2025**, the company executed a **1-for-10 reverse stock split** of its outstanding common stock[33](index=33&type=chunk) [Note 2. Significant Accounting Policies](index=12&type=section&id=Note%202.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the company's significant accounting policies, including basis of presentation, consolidation, and estimates [Basis of Presentation](index=12&type=section&id=Basis%20of%20Presentation) This section outlines the basis for preparing the consolidated financial statements in accordance with U.S. GAAP and SEC regulations - Consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial statements and SEC regulations (Form **10-Q**, Article **8** of Regulation S-X)[38](index=38&type=chunk) - The consolidated balance sheet as of **December 31, 2024**, is derived from the audited **2024 Annual Report**[38](index=38&type=chunk) [Principles of Consolidation](index=12&type=section&id=Principles%20of%20Consolidation) This section describes the entities included in the consolidated financial statements, including subsidiaries and partnerships - The consolidated financial statements include Presidio Property Trust, Inc., its subsidiaries (NetREIT Advisors, LLC and Dubose Advisors LLC, NetREIT Dubose Model Home REIT, Inc.), and the NetREIT Partnerships and Model Home Partnerships[39](index=39&type=chunk) - Noncontrolling interests in NetREIT Partnerships are classified as part of consolidated net (loss) income and equity[40](index=40&type=chunk) [Use of Estimates](index=12&type=section&id=Use%20of%20Estimates) This section highlights management's use of estimates and assumptions in preparing the financial statements - Financial statements require management to make estimates and assumptions affecting reported amounts of assets, liabilities, revenues, and expenses[41](index=41&type=chunk) - Significant estimates include private warrants, allocation of property acquisition purchase price, valuation of long-lived assets, and allowance for doubtful accounts[41](index=41&type=chunk) [Real Estate Assets and Lease Intangibles](index=12&type=section&id=Real%20Estate%20Assets%20and%20Lease%20Intangibles) This section details the accounting policies for real estate assets, including cost capitalization and purchase price allocation - Land, buildings, and improvements are recorded at cost, including tenant improvements and lease acquisition costs[42](index=42&type=chunk) - Purchase price of acquired properties is allocated to tangible assets and identified intangible assets/liabilities (e.g., above/below-market leases, in-place leases) based on fair values[42](index=42&type=chunk) - Amortization of above and below-market rents resulted in a net increase in rental income of approximately **$1,244** for the **three months** and **$2,265** for the **six months** ended **June 30, 2025**[45](index=45&type=chunk) [Deferred Leasing Costs](index=13&type=section&id=Deferred%20Leasing%20Costs) This section explains the capitalization and amortization policies for costs incurred for successful property leases - Costs incurred for successful property leases are capitalized as deferred leasing costs and amortized on a straight-line basis over the lease terms (generally **one to five years**)[48](index=48&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Net deferred leasing costs | $1.4 million | $1.7 million | | Amortization expense (3 months) | $82,657 | $119,278 | | Amortization expense (6 months) | $217,433 | $244,099 | [Cash, Cash Equivalents and Restricted Cash](index=13&type=section&id=Cash,%20Cash%20Equivalents%20and%20Restricted%20Cash) This section defines cash and cash equivalents and details the nature of restricted cash held by lenders | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :-------------- | :---------------- | | Cash, cash equivalents and restricted cash | $7.3 million | $8.0 million | | Restricted cash | $3.6 million | $5.0 million | - Restricted cash is held in escrow by lenders for property taxes, insurance, leasing costs, future debt payments, and capital expenditures[49](index=49&type=chunk) [Real Estate Held for Sale and Discontinued Operations](index=13&type=section&id=Real%20Estate%20Held%20for%20Sale%20and%20Discontinued%20Operations) This section outlines the criteria for reclassifying assets as 'held for sale' and identifies current properties in this category - Assets are reclassified as 'held for sale' when disposition is approved, available for immediate sale, actively seeking a buyer, and probable within **one year**[50](index=50&type=chunk) - As of **June 30, 2025**, **one commercial property** (Dakota Center) and **five model homes** were classified as 'held for sale'[50](index=50&type=chunk) [Impairments of Real Estate Assets](index=14&type=section&id=Impairments%20of%20Real%20Estate%20Assets) This section describes the company's policy for recognizing impairment charges on real estate assets - Impairment is recognized when expected undiscounted cash flows for a property held for use are less than its carrying amount, or when fair value less costs to sell is less than carrying amount for a property held for sale[52](index=52&type=chunk) | Impairment Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Model homes | ~$0.1 million | ~$0.2 million | | Commercial properties (Dakota Center & Shea Center II) | ~$4.2 million | $0 | - New impairment charges for model homes in **Q2 2025** reflect estimated sales prices due to an abnormally short hold period (less than **two years**)[54](index=54&type=chunk) [Fair Value Measurements](index=14&type=section&id=Fair%20Value%20Measurements) This section categorizes fair value measurements and details the company's investments in warrants - Fair value measurements are categorized into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than quoted prices), and **Level 3** (significant unobservable inputs)[55](index=55&type=chunk)[58](index=58&type=chunk) - As of **June 30, 2025**, the company held no marketable securities other than investments in Conduit Pharmaceuticals' common stock warrants[56](index=56&type=chunk) | Investment | June 30, 2025 | December 31, 2024 | Fair Value Level | | :------------------------------------------------- | :-------------- | :---------------- | :--------------- | | Private CDT Warrants | $0 | $0 | Level 3 | | Conduit's public common stock warrants (CDTTW) | ~$7,728 | ~$0.2 million | Level 1 | [Earnings per share ("EPS")](index=15&type=section&id=Earnings%20per%20share%20(%22EPS%22)) This section explains the computation of EPS using the two-class method and the treatment of dilutive shares - EPS is computed using the **two-class method** for participating securities (unvested restricted stock with non-forfeitable dividends)[60](index=60&type=chunk) - In periods of net loss, all potentially dilutive common stock shares are considered anti-dilutive and excluded from EPS calculation[61](index=61&type=chunk) | Potentially Dilutive Shares | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Common Stock Warrants | 200,000 | 200,000 | 200,000 | 200,000 | | Placement Agent Warrants | 8,000 | 8,000 | 8,000 | 8,000 | | Series A Warrants | 1,445,007 | 1,445,007 | 1,445,007 | 1,445,007 | | Unvested Common Stock Grants | 208,498 | 203,466 | 208,498 | 203,466 | | Total potentially dilutive shares | 1,861,505 | 1,856,473 | 1,861,505 | 1,856,473 | [Variable Interest Entity](index=15&type=section&id=Variable%20Interest%20Entity) This section describes the company's judgment and estimates in determining and consolidating Variable Interest Entities - The company uses judgment and estimates to determine if an entity is a Variable Interest Entity (VIE) and if it should be consolidated[62](index=62&type=chunk) - A reporting entity is the primary beneficiary if it has the power to direct activities significantly impacting the VIE's economic performance and the obligation to absorb losses or right to receive benefits[62](index=62&type=chunk) [Immaterial Error Corrections & Reclassifications](index=15&type=section&id=Immaterial%20Error%20Corrections%20%26%20Reclassifications) This section details immaterial error corrections and reclassifications made to prior period financial statements - In **Q4 2024**, amortization of model home transaction fees was reclassified from 'fees and other income' to 'rental income' on the consolidated statement of operations, with no change to total revenues[64](index=64&type=chunk) - Adjustments were made to the consolidated statement of cash flows for the **six months** ended **June 30, 2024**, to correct prior year building/tenant improvements and debt issuance cost presentations, impacting operating, investing, and financing cash flows[65](index=65&type=chunk)[66](index=66&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=16&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) This section discusses recently issued and adopted accounting pronouncements and their impact on the company - The company adopted **ASU 2023-09** (Income Taxes) and **ASU 2023-07** (Segment Reporting), updating financial statement disclosures accordingly[69](index=69&type=chunk)[70](index=70&type=chunk) - The SEC's climate-disclosure rules (**March 2024**) were voluntarily stayed and later had their defense ended by the SEC, with potential for judicial ruling[71](index=71&type=chunk) - The company is evaluating the impact of **ASU 2024-03** (Expense Disaggregation Disclosures), effective for annual periods beginning after **December 15, 2026**[72](index=72&type=chunk) [Note 3. Recent Real Estate Transactions](index=17&type=section&id=Note%203.%20RECENT%20REAL%20ESTATE%20TRANSACTIONS) This note summarizes the company's recent acquisitions and dispositions of model homes and commercial properties | Transaction Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Model Home Acquisitions (number) | 22 | 12 | | Model Home Acquisitions (value) | ~$9.4 million | ~$5.7 million | | Commercial Property Dispositions (value) | ~$17.0 million (net gain ~$4.2 million) | $0 | | Model Home Dispositions (number) | 13 | 42 | | Model Home Dispositions (value) | ~$5.9 million (net gain ~$0.6 million) | ~$20.1 million (net gain ~$2.8 million) | [Note 4. Real Estate Assets](index=17&type=section&id=Note%204.%20REAL%20ESTATE%20ASSETS) This note details the company's real estate portfolio, including commercial and model home properties, and changes in their net value - As of **June 30, 2025**, the company owned **8 office/industrial properties** (**758,175 sq ft**), **1 retail property** (**10,500 sq ft**), and **87 model home residential properties** (**260,227 sq ft**)[78](index=78&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :-------------- | :---------------- | | Total real estate assets and lease intangibles, net | $114,576,297 | $127,596,500 | | Commercial properties, net | $73,725,786 | $90,180,500 | | Model Home properties, net | $40,850,511 | $37,416,000 | - **Two commercial properties** (Union Town Center and Research Parkway) were sold in **February 2025** for **$17.0 million**, resulting in a **$4.2 million net gain**[77](index=77&type=chunk)[82](index=82&type=chunk) - Impairment charges of approximately **$3.3 million** for Dakota Center and **$0.9 million** for Shea Center II were recorded as of **June 30, 2025**[82](index=82&type=chunk) [Note 5. Lease Intangibles](index=20&type=section&id=Note%205.%20LEASE%20INTANGIBLES) This note presents the net value of lease intangible assets and expected future amortization expense | Lease Intangible | June 30, 2025 (net) | December 31, 2024 (net) | | :----------------- | :------------------ | :-------------------- | | In-place leases | $5,574 | $10,465 | | Leasing costs | $5,440 | $9,312 | | Above-market leases | $0 | $0 | | Total | $11,014 | $19,777 | | Year | Future Aggregate Amortization Expense | | :------------------------ | :-------------------------- | | 2025 | $6,910 | | 2026 | $4,104 | | Total | $11,014 | [Note 6. Other Assets](index=20&type=section&id=Note%206.%20OTHER%20ASSETS) This note details the components of other assets, including deferred rent, prepaid expenses, and accounts receivable | Other Asset | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Deferred rent receivable | $1,880,640 | $2,126,609 | | Prepaid expenses, deposits and other | $956,919 | $406,494 | | Notes receivable | $316,374 | $316,374 | | Accounts receivable, net | $211,921 | $463,194 | | Right-of-use assets, net | $51,913 | $64,026 | | Total other assets | $3,417,767 | $3,376,697 | [Note 7. Mortgage Notes Payable](index=21&type=section&id=Note%207.%20MORTGAGE%20NOTES%20PAYABLE) This note details the company's mortgage notes payable, including changes, interest rates, and future principal payments | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :-------------- | :---------------- | | Mortgage Notes Payable, net | $94,603,804 | $102,094,094 | | Commercial properties notes payable | $66,974,176 | $76,781,271 | | Model Home mortgage notes | $28,445,612 | $26,060,798 | | Weighted average interest rate | 5.90% (as of June 30, 2025) | 5.38% (as of June 30, 2024) | - The non-recourse loan on the Dakota Center property matured on **July 6, 2024**, and is now classified as 'mortgage notes payable related to properties held for sale, net'[87](index=87&type=chunk) - Union Town Center and Research Parkway loans were paid in full following their sale in **February 2025**[87](index=87&type=chunk) - **Three commercial property loans** (One Park Centre, Genesis Plaza, Shea Center II) totaling approximately **$28.1 million** mature within the next **12 months**, with refinancing or sale options under review[87](index=87&type=chunk)[207](index=207&type=chunk) | Years ending December 31 | Total Principal Payments | | :----------------------- | :----------------------- | | 2025 | $24,361,034 | | 2026 | $19,676,405 | | 2027 | $929,814 | | 2028 | $9,397,962 | | 2029 | $23,499,782 | | Thereafter | $17,554,791 | | Total | $95,419,788 | [Note 8. Notes Payable](index=22&type=section&id=Note%208.%20NOTES%20PAYABLE) This note describes the company's SBA Economic Injury Disaster Loan and other notes payable - The company has an SBA Economic Injury Disaster Loan (EIDL) of **$150,000**, with principal and interest deferred for **12 months** from issuance, accruing **3.75% interest**, and maturing **August 17, 2050**[90](index=90&type=chunk) | Loan | June 30, 2025 | December 31, 2024 | | :---------------- | :-------------- | :---------------- | | SBA EIDL | $142,375 | $144,089 | - A **$0.3 million** promissory note issued to a majority-owned subsidiary for model home refinancing was paid in full in **October 2024**[91](index=91&type=chunk) [Note 9. Investment in Conduit Pharmaceuticals](index=22&type=section&id=Note%209.%20INVESTMENT%20IN%20CONDUIT%20PHARMACEUTICALS) This note details the company's investment in Conduit Pharmaceuticals, including warrants and recent stock sales - Conduit Pharmaceuticals executed a **1-for-100 reverse stock split** on **January 24, 2025**[92](index=92&type=chunk) - The company sold all remaining **29,431 shares** of CDT common stock for **$13,990** in **May 2025**[92](index=92&type=chunk) | Investment | June 30, 2025 | | :------------------------------------- | :-------------- | | Public common stock warrants (CDTTW) | 709,000 | | Private common stock warrants | 540,000 | | Combined value | ~$7,728 | - A loss of **$184,459** on Conduit's marketable securities was recorded for the **six months** ended **June 30, 2025**, a significant reduction from the **$13.9 million loss** in the prior year[192](index=192&type=chunk) [Note 10. Commitments and Contingencies](index=23&type=section&id=Note%2010.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines estimated capital expenditures, potential impacts from activist stockholders, and other market risks - Approximately **$1.6 million** is estimated for capital expenditures on existing properties for the remainder of **2025**[94](index=94&type=chunk) - Activist stockholder activities could adversely affect the business by incurring costs, diverting management attention, and impacting business opportunities or stock price[95](index=95&type=chunk) - The company is not currently subject to any material litigation or threatened litigation, nor is it aware of any material environmental liabilities[96](index=96&type=chunk)[97](index=97&type=chunk) - The company monitors financial market concerns such as economic recession, interest rate increases, trade wars, labor shortages, and inflation, which could impact commercial real estate fundamentals[98](index=98&type=chunk) [Note 11. Stockholders' Equity](index=23&type=section&id=Note%2011.%20STOCKHOLDERS%27%20EQUITY) This note details the company's equity structure, including preferred and common stock, dividends, and repurchase programs - The company is authorized to issue up to **1,000,000 shares** of Preferred Stock and up to **100,000,000 shares** of Series A Common Stock[99](index=99&type=chunk)[109](index=109&type=chunk) - Series D Preferred Stock holders receive cumulative cash dividends at **9.375% per annum** (**$2.34375 per share**) on a **$25.00 liquidation preference**, payable monthly[102](index=102&type=chunk) - The company may redeem Series D Preferred Stock at **$25.00 per share** plus unpaid dividends, commencing **June 15, 2026**, or earlier upon a Change of Control[107](index=107&type=chunk) - A **1-for-10 reverse stock split** of Series A Common Stock was effected on **May 19, 2025**[113](index=113&type=chunk) - A stock repurchase program authorized in **December 2024** allows for repurchases of up to **$6.0 million** of Series A Common Stock and **$4.0 million** of Series D Preferred Stock, expiring **December 2025**[114](index=114&type=chunk) | Stock Repurchase (6 months ended June 30, 2025) | Shares Repurchased | Total Cost | | :---------------------------------------------- | :----------------- | :--------- | | Series A Common Stock | 4,091 | $18,552 | | Series D Preferred Stock | 22,259 | $327,787 | - A fixed-price self-tender offer for Series A Common Stock was completed on **May 5, 2025**, purchasing **214,412 shares** for approximately **$1.46 million**[115](index=115&type=chunk) | Dividends Paid to Series D Preferred Stockholders | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------- | :--------------------------- | :--------------------------- | | Total Cash Dividends | ~$1.2 million | ~$1.1 million | [Note 12. Share-Based Incentive Plan](index=27&type=section&id=Note%2012.%20SHARE-BASED%20INCENTIVE%20PLAN) This note describes the company's restricted stock incentive plan, including vesting periods and outstanding shares - The company's restricted stock incentive plan grants awards that generally vest over **three-to-ten-year periods**[118](index=118&type=chunk) - The **2017 Incentive Award Plan** was amended in **June 2025** to increase available shares to **450,000** and include an evergreen provision to maintain shares at **15%** of outstanding common stock[119](index=119&type=chunk) | Restricted Stock Activity | Shares | | :------------------------ | :----- | | Balance at December 31, 2024 | 117,081 | | Granted | 97,800 | | Vested | (6,326) | | Balance at June 30, 2025 | 208,555 | - As of **June 30, 2025**, future unrecognized stock compensation related to unvested shares totaled approximately **$1.4 million**[120](index=120&type=chunk) [Note 13. Segments](index=28&type=section&id=Note%2013.%20SEGMENTS) This note details the company's reportable segments and their performance based on Net Operating Income - The company's reportable segments are Office/Industrial Properties, Model Home Properties, and Retail Properties, with performance evaluated by the CEO based on Net Operating Income (NOI)[121](index=121&type=chunk)[122](index=122&type=chunk) - For Model Home performance, Adjusted NOI includes gain or loss on sale of real estate assets net of impairments[123](index=123&type=chunk) | Segment | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :---------------- | :--------------------------- | :--------------------------- | :----- | | Retail | $251,460 | $732,647 | -$481,187 | | Office/Industrial | $2,982,301 | $2,904,502 | $77,799 | | Model Homes | $2,281,945 | $4,974,636 | -$2,692,691 | | Corporate and Other | $359,517 | $341,951 | $17,566 | | Total Adjusted NOI | $5,875,223 | $8,953,736 | -$3,078,513 | | Investment Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Acquisition of operating properties, net | $9,444,465 | $5,740,918 | | Capital expenditures and tenant improvements | $709,531 | $1,213,936 | | Total real estate investments | $10,153,996 | $6,954,854 | [Note 14. Income Tax Provision](index=34&type=section&id=Note%2014.%20INCOME%20TAX%20PROVISION) This note explains the company's income tax treatment as a REIT and the provision for its Taxable REIT Subsidiaries - As a REIT, the company is generally exempt from federal income tax on distributed earnings but its TRSs are subject to federal, state, and local income taxes[142](index=142&type=chunk) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Current income tax provision (benefit) | $28,501 | $160,586 | - An income tax asset of **$298,644** related to TRS operating activities was reported as of **June 30, 2025**, and **December 31, 2024**[143](index=143&type=chunk) [Note 15. Related Party](index=34&type=section&id=Note%2015.%20RELATED%20PARTY) This note details transactions with related parties, including leasing arrangements and payroll reimbursements | Rent Billed to Related Parties | 2025 | 2024 | | :-------------------- | :----- | :----- | | 3 months ended June 30 | $3,378 | $2,688 | | 6 months ended June 30 | $6,755 | $5,376 | | Payroll Reimbursement from Related Parties | 2025 | 2024 | | :-------------------- | :--------- | :--------- | | 6 months ended June 30 | $65,212 | $75,715 | | Payments to Larry Dubose (6 months) | Consulting Fees | Distributions | | :---------------------------------- | :-------------- | :------------ | | 2025 | $25,000 | $7,599 | | 2024 | $153,750 | $86,520 | [Note 16. Subsequent Events](index=35&type=section&id=Note%2016.%20SUBSEQUENT%20EVENTS) This note describes significant events occurring after the reporting period, including dividends and a direct offering - Dividends of **$0.19531 per share** for Series D Preferred Stock were declared for **July, August, and September 2025**[151](index=151&type=chunk) - A registered direct offering on **July 15, 2025**, raised approximately **$2.05 million** in gross proceeds (**$1.7 million net**) from the sale of Series A Common Stock and pre-funded warrants, intended for working capital and property acquisitions[152](index=152&type=chunk)[153](index=153&type=chunk) - Series A Common Stock Purchase Warrants were amended to reduce the exercise price from **$55** to **$12 per share** and extend the termination date to **July 16, 2030**[154](index=154&type=chunk) - On **August 6, 2024**, the mortgage loan on Genesis Plaza property was refinanced for **$6.25 million**, with a **four-year term** and **7.07% interest rate**[156](index=156&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results [Overview](index=36&type=section&id=Overview) This section provides an overview of the company's business as an internally managed, diversified REIT - The company operates as an internally managed, diversified REIT, primarily holding office, industrial, retail, and triple-net leased model home properties[160](index=160&type=chunk) - As of **June 30, 2025**, the portfolio includes **8 office/industrial buildings** (**758,175 sq ft**), **1 retail building** (**10,500 sq ft**), and **87 model home residential properties** (**260,227 sq ft**)[160](index=160&type=chunk) - Model homes are typically leased back for **two to three years** to homebuilders on a triple-net basis, where tenants cover all operating, maintenance, insurance, and real estate taxes[162](index=162&type=chunk) - The Board of Directors established a Strategic Planning and Cyber Committee in **June 2024** to oversee business strategy and cybersecurity risks[164](index=164&type=chunk) [Significant Transactions](index=37&type=section&id=Significant%20Transactions) This section details the company's significant real estate acquisition and disposition activities | Transaction Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Model Home Acquisitions (number) | 22 | 12 | | Model Home Acquisitions (value) | ~$9.4 million | ~$5.7 million | | Commercial Property Dispositions (value) | ~$17.0 million (net gain ~$4.2 million) | $0 | | Model Home Dispositions (number) | 13 | 42 | | Model Home Dispositions (value) | ~$5.9 million (net gain ~$0.6 million) | ~$20.1 million (net gain ~$2.8 million) | [Critical Accounting Policies](index=38&type=section&id=Critical%20Accounting%20Policies) This section confirms no material changes to the company's critical accounting policies since the last annual report - There have been no material changes to the company's critical accounting policies since the **2024 year-end Annual Report**[170](index=170&type=chunk) [Management Evaluation of Results of Operations](index=38&type=section&id=Management%20Evaluation%20of%20Results%20of%20Operations) This section outlines management's approach to assessing operating results and strategic focus on asset performance - Management assesses operating results based on cash flow generation for expenses, debt service, and stockholder distributions, giving less emphasis to non-cash charges[171](index=171&type=chunk) - Efforts focus on improving underperforming assets through re-leasing and rental rate negotiations, with properties lacking value appreciation or cash flow potential being sold for reinvestment[172](index=172&type=chunk) [Results of Operations for the Three Months Ended June 30, 2025 and 2024](index=38&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section analyzes the company's financial performance for the three months ended June 30, 2025 and 2024 | Metric | 2025 | 2024 | Change | | :------------------------------------- | :----------- | :----------- | :------- | | Total revenues | ~$4.4 million | ~$4.6 million | -$0.2 million | | Rental operating costs | ~$1.5 million | ~$1.5 million | ~$0 | | G&A expenses | ~$1.2 million | ~$2.2 million | -$1.0 million | | Depreciation and amortization | ~$1.2 million | ~$1.4 million | -$0.2 million | | Asset impairment charges | ~$4.3 million | ~$0.1 million | +$4.2 million | | Interest expense - mortgage notes | ~$1.5 million | ~$1.5 million | ~$0 | | Income allocated to non-controlling interests | ~$0.2 million | ~$0.5 million | -$0.3 million | | Loss on Conduit remeasurement | $7,802 | ~$10.0 million | -$9.99 million | - The decrease in total revenue is primarily due to the sale of **two commercial properties** in **February 2025**[173](index=173&type=chunk) - G&A expenses decreased by **$1.0 million** due to reduced consulting and legal fees, lower board fees (replaced by stock compensation), and reduced income tax preparation fees[175](index=175&type=chunk) - Significant impairment charges of **$3.3 million** for Dakota Center and **$0.9 million** for Shea Center II were recorded in **Q2 2025**[178](index=178&type=chunk) [Results of Operations for the Six Months Ended June 30, 2025 and 2024](index=39&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section analyzes the company's financial performance for the six months ended June 30, 2025 and 2024 | Metric | 2025 | 2024 | Change | | :------------------------------------- | :----------- | :----------- | :------- | | Total revenues | ~$8.5 million | ~$9.4 million | -$0.9 million | | Rental operating costs | ~$3.1 million | ~$3.1 million | ~$0 | | G&A expenses | ~$2.9 million | ~$4.3 million | -$1.4 million | | Depreciation and amortization | ~$2.5 million | ~$2.7 million | -$0.2 million | | Asset impairment charges | ~$4.3 million | ~$0.2 million | +$4.1 million | | Interest expense - mortgage notes | ~$3.0 million | ~$3.0 million | ~$0 | | Income allocated to non-controlling interests | ~$0.3 million | ~$2.0 million | -$1.7 million | | Loss on Conduit remeasurement | $184,459 | ~$13.9 million | -$13.7 million | - The decrease in total revenue is attributed to lower model home rental income and transaction fees, and the sale of **two commercial properties**[183](index=183&type=chunk) - G&A expenses decreased by **$1.4 million** due to reduced consulting fees (including a one-time payment in **2024**), lower legal fees, reduced board fees, and decreased company-wide bonus accruals[185](index=185&type=chunk) - Asset impairment charges increased significantly to **$4.3 million**, primarily due to Dakota Center (**$3.3 million**) and Shea Center II (**$0.9 million**)[187](index=187&type=chunk) [Geographic Diversification](index=41&type=section&id=Geographic%20Diversification) This section details the geographic distribution of the company's commercial and model home properties | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | % of Aggregate Annual Rent | | :------------ | :---------------- | :-------------------- | :--------------- | :----------------------- | :------------------------- | | California | 1 | 57,807 | 7.5% | $1,548,723 | 14.8% | | Colorado | 3 | 269,503 | 35.1% | $4,238,114 | 40.4% | | Maryland | 1 | 31,752 | 4.1% | $739,050 | 7.1% | | North Dakota | 4 | 399,113 | 51.9% | $3,605,054 | 34.4% | | Texas | 1 | 10,500 | 1.4% | $349,546 | 3.3% | | Total | 10 | 768,675 | 100.0% | $10,480,487 | 100.0% | | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | % of Aggregate Annual Rent | | :-------- | :---------------- | :-------------------- | :--------------- | :----------------------- | :------------------------- | | Alabama | 10 | 23,835 | 9.2% | $347,064 | 9.2% | | Arizona | 2 | 6,822 | 2.6% | $149,196 | 3.9% | | Tennessee | 2 | 5,534 | 2.1% | $89,304 | 2.4% | | Texas | 73 | 224,036 | 86.1% | $3,207,360 | 84.5% | | Total | 87 | 260,227 | 100.0% | $3,792,924 | 100.0% | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, capital resources, and cash flow activities - Future liquidity sources include existing cash, cash flows from operations, mortgage refinancing, real estate sales, new borrowings, and equity/debt security sales[194](index=194&type=chunk) - Cash and restricted cash totaled approximately **$7.3 million** at **June 30, 2025**[194](index=194&type=chunk) | Period | Total Principal Payments on Mortgage Notes Payable | | :------------------------------------- | :----------------------------------------------- | | Last three quarters of 2025 | ~$24.4 million | | Year ending December 31, 2026 | ~$19.7 million | - Management believes current working capital and ability to refinance mortgages will fund operations for at least the next **twelve months**[196](index=196&type=chunk) - A stock repurchase program for up to **$6.0 million** of Series A Common Stock and **$4.0 million** of Series D Preferred Stock was authorized in **December 2024**, expiring **December 2025**[198](index=198&type=chunk) | Cash Dividends on Series D Preferred Stock | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Total Cash Dividends | ~$1.2 million | ~$1.1 million | - Net cash used in operating activities decreased to **$1.0 million** for the **six months** ended **June 30, 2025**, from **$1.3 million** in the prior year[209](index=209&type=chunk) - Net cash provided by investing activities was **$11.4 million** for the **six months** ended **June 30, 2025**, compared to **$13.0 million** used in the prior year, primarily due to commercial property sales[210](index=210&type=chunk) - Net cash used in financing activities increased to **$11.1 million** for the **six months** ended **June 30, 2025**, from **$9.6 million** in the prior year, driven by higher mortgage repayments and stock repurchases[212](index=212&type=chunk) [Off-Balance Sheet Arrangements](index=45&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes the company's outstanding common stock warrants and other off-balance sheet commitments - The company has outstanding Common Stock Warrants (**200,000 shares**) with an exercise price adjusted to **$12.00 per share** and an extended term to **July 16, 2030**[212](index=212&type=chunk)[214](index=214&type=chunk) - Placement Agent Warrants (**8,000 shares**) are outstanding with an exercise price of **$62.50 per share**[213](index=213&type=chunk)[215](index=215&type=chunk) - Series A Warrants (**1,445,007 shares**) are outstanding with a right to purchase common stock at **$70.00 per share**[217](index=217&type=chunk)[218](index=218&type=chunk) [Inflation](index=46&type=section&id=Inflation) This section addresses the impact of inflation on the company's lease provisions and property expenses - Lease provisions generally include limited rent increases based on fixed amounts, CPI (with ceilings), or client sales volumes, which are expected to result in rent increases over time due to inflation[219](index=219&type=chunk) - Net lease agreements help mitigate exposure to rising property expenses from inflation, as tenants are responsible for these costs[220](index=220&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risk as it is a smaller reporting company[221](index=221&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting [Disclosure Controls and Procedures](index=46&type=section&id=Disclosure%20Controls%20and%20Procedures) This section describes the company's disclosure controls and procedures and their effectiveness - The company maintains disclosure controls and procedures to ensure timely and accurate reporting of information required by Exchange Act reports[222](index=222&type=chunk) - The CEO and CFO concluded that the disclosure controls and procedures were effective as of **June 30, 2025**[223](index=223&type=chunk) [Changes in Internal Control over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during the quarter - No changes in internal control over financial reporting occurred during the fiscal quarter ended **June 30, 2025**, that materially affected or are reasonably likely to materially affect internal control over financial reporting[224](index=224&type=chunk) [Part II. Other Information](index=46&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, and other miscellaneous information [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings or threatened litigation - The company is not presently subject to any material litigation nor is there any material threatened litigation[225](index=225&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No new material risk factors were reported in this quarterly filing - No new material risk factors are disclosed in this report[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase program and a fixed-price self-tender offer for Series A Common Stock - A stock repurchase program, authorized in **December 2024**, allows for repurchases of up to **$6.0 million** of Series A Common Stock and **$4.0 million** of Series D Preferred Stock, expiring in **December 2025**[227](index=227&type=chunk) | Stock Type | Shares Repurchased (6 months ended June 30, 2025) | Total Cost | | :----------------------- | :---------------------------------------------- | :--------- | | Series A Common Stock | 4,091 | $18,552 | | Series D Preferred Stock | 22,259 | $327,787 | - A fixed-price self-tender offer for Series A Common Stock was completed on **May 5, 2025**, purchasing **214,412 shares** for approximately **$1.46 million**[230](index=230&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports a maturity date default on a loan secured by the Dakota Center property - On **March 13, 2025**, the company received a maturity date default notice for an **$11.1 million loan** secured by the Dakota Center property[232](index=232&type=chunk) - The default requires payment of a default interest rate (**5% above original**) and lender expenses[233](index=233&type=chunk) - As of the report date, the default amount is approximately **$9.1 million**, with a total arrearage of approximately **$0.4 million**[233](index=233&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable to the company - No mine safety disclosures are applicable[234](index=234&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section confirms no director or officer adopted or terminated trading arrangements during the quarter - No director or officer adopted or terminated a Rule **10b5-1** or non-Rule **10b5-1** trading arrangement during the **three months** ended **March 31, 2025**[235](index=235&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - Exhibits include Articles of Amendment (**3.1**), CEO and CFO certifications under Sarbanes-Oxley Act (**31.1, 31.2, 32.1**), and Inline XBRL documents (**101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104**)[236](index=236&type=chunk) [Signatures](index=51&type=section&id=Signatures) This section contains the official signatures of the Chief Executive Officer and Chief Financial Officer - The report was signed on **August 14, 2025**, by Jack K Heilbron, Chief Executive Officer, and Ed Bentzen, Chief Financial Officer[238](index=238&type=chunk)

Group 1 - Presidio Property Trust, Inc. has entered into a securities purchase agreement for the sale of 170,830 shares of common stock at a price of $12.00 per share, resulting in gross proceeds of approximately $2.05 million [1] - The closing of the offering is expected to occur on or about July 15, 2025, subject to customary closing conditions [1] - The net proceeds from the offering will be used for working capital and general corporate purposes [1] Group 2 - The existing July 2021 warrants to purchase up to 200,000 shares of common stock will be amended to have a reduced exercise price of $12.00 per share, expiring five years from the amendment date [2] - The Warrant Amendment will become effective following the resale registration to be filed within 30 days [2] Group 3 - A.G.P./Alliance Global Partners is acting as the sole placement agent for the offering [3] - The offering is made pursuant to an effective shelf registration statement on Form S-3, declared effective by the SEC on May 17, 2024 [4] Group 4 - Presidio is an internally managed real estate investment trust with holdings in model home properties leased to homebuilders, as well as office, industrial, and retail properties [6] - The model homes are located in Arizona, Texas, and Florida, while the other properties are primarily in Colorado, with additional locations in Maryland, North Dakota, Texas, and Southern California [6]