[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]

Core Insights - Presidio Property Trust, Inc. reported the sale of seven homes for approximately $3.5 million in Q2 2025, with total acquisition costs of about $3.2 million for these homes [1] - The company acquired 10 homes for around $5.2 million, located in Texas, Alabama, and Tennessee, expanding its portfolio [1] - Model homes constitute approximately 34% of Presidio's net real estate assets and 24% of its rental revenue, with 68 out of 87 model homes wholly owned as of June 30, 2025 [1] Acquisition Strategy - The company has successfully identified and executed acquisition opportunities in Sun Belt states, enhancing geographical diversification [2] - This strategic move is part of Presidio's managed growth plan in collaboration with a nationally recognized builder [2] Company Overview - Presidio is an internally managed, diversified REIT with holdings primarily in model home properties leased to homebuilders, as well as office, industrial, and retail properties [3] - The model homes are mainly located in Sun Belt states, while office and retail properties are concentrated in Colorado, with additional locations in Maryland, North Dakota, Texas, and Southern California [3]

Core Points - Presidio Property Trust has regained compliance with Nasdaq's minimum bid price requirement, allowing its common stock to continue being listed and traded on Nasdaq [1][2] - The company achieved the required minimum closing bid price of $1.00 for at least 10 consecutive business days, with the compliance date noted as June 2, 2025 [2] Company Overview - Presidio Property Trust is an internally managed, diversified real estate investment trust (REIT) with holdings primarily in model home properties leased to homebuilders, as well as office, industrial, and retail properties [3] - The model homes are mainly located in sun belt states, while the office, industrial, and retail properties are primarily situated in Colorado, with additional locations in Maryland, North Dakota, Texas, and Southern California [3]

[Company Overview](index=3&type=section&id=Company%20Overview) Presidio Property Trust is an internally managed real estate company focused on commercial and model home properties with a total book value of $117.4 million [Corporate Information and Portfolio Summary](index=3&type=section&id=Corporate%20Information%20and%20Portfolio%20Summary) Presidio Property Trust is an internally managed real estate company with a portfolio of commercial and model home properties valued at $117.4 million - Presidio is an internally managed real estate company specializing in commercial real estate in regionally dominant markets, acquiring office and industrial assets[8](index=8&type=chunk) Portfolio Summary (as of March 31, 2025) | Property Type | Count / Square Footage | | :--- | :--- | | Office | 8 properties / 608,076 sqft. | | Retail | 1 property / 10,500 sqft. | | Industrial | 1 property / 150,099 sqft. | | Model Homes | 84 homes / 248,412 sqft | Portfolio Value & Debt | Metric | Value | | :--- | :--- | | Book Value | $117.4 million | | Existing Secured Debt | $93.7 million | [Portfolio Details](index=4&type=section&id=Portfolio%20Details) The company's commercial and model home portfolios are detailed, covering recent asset sales, value changes, and leasing activities [Commercial Portfolio](index=4&type=section&id=Commercial%20Portfolio) The commercial portfolio's net book value decreased to $78.5 million due to property sales that generated a $4.2 million net gain Commercial Portfolio Value Change | Date | Net Real Estate Assets Value | | :--- | :--- | | March 31, 2025 | $78,500,665 | | December 31, 2024 | $90,180,500 | - In February 2025, the company sold Union Town Center and Research Parkway for a combined **$16.95 million**, realizing a net gain of approximately **$4.2 million**[9](index=9&type=chunk) - The Dakota Center property is classified as held for sale to settle its non-recourse loan that matured in July 2024; an impairment charge of **$0.7 million** was recorded in Q3 2024[9](index=9&type=chunk) - The company is actively working to lease the remaining **46%** of space at Shea Center II, and approximately **54%** of the space has since been leased to other tenants[9](index=9&type=chunk) [Model Homes Portfolio](index=6&type=section&id=Model%20Homes%20Portfolio) The model homes portfolio comprises 84 properties generating $3.56 million in annual rent, with a heavy concentration in Texas Model Homes Portfolio Summary | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | % of Aggregate Annual Rent | | :--- | :--- | :--- | :--- | :--- | :--- | | Alabama | 9 | 20,804 | 8.4% | $309,456 | 8.7% | | Arizona | 2 | 6,822 | 2.7% | $149,196 | 4.2% | | Florida | 2 | 5,337 | 2.2% | $89,844 | 2.5% | | Texas | 71 | 215,449 | 86.7% | $3,007,512 | 84.6% | | **Total** | **84** | **248,412** | **100.0%** | **$3,556,008** | **100.0%** | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheet, income statement, and cash flow statement for the first quarter of 2025 [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities decreased to $135.4 million and $98.9 million respectively, while total equity increased to $36.6 million Balance Sheet Summary (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Real estate assets, net | $117.4 | $127.6 | | **Total Assets** | **$135.4** | **$142.6** | | Mortgage notes payable, total net | $93.7 | $102.1 | | **Total Liabilities** | **$98.9** | **$107.6** | | **Total Equity** | **$36.6** | **$34.9** | - Real estate assets held for sale, net, decreased significantly from **$22.2 million** on December 31, 2024, to **$12.5 million** on March 31, 2025, reflecting property sales during the quarter[12](index=12&type=chunk) - Cash, cash equivalents and restricted cash increased from **$8.0 million** to **$12.0 million** during the first quarter of 2025[12](index=12&type=chunk) [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a Q1 2025 net income of $2.38 million, a significant turnaround from a loss in Q1 2024, driven by gains on real estate sales Q1 Performance Comparison (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $4,125,184 | $4,790,061 | | Gain on sales of real estate, net | $4,453,968 | $2,018,095 | | Net (Loss) Income | $2,376,915 | ($3,737,795) | | Net Income (Loss) to Common Stockholders | $1,685,777 | ($5,763,695) | | Basic & Diluted EPS | $0.13 | ($0.47) | - The shift to profitability in Q1 2025 was primarily due to a **$4.45 million gain on real estate sales**, which more than compensated for lower rental income and a **$0.18 million net loss** on marketable securities[14](index=14&type=chunk) - General and administrative expenses decreased to **$1.66 million** in Q1 2025 from **$2.08 million** in Q1 2024[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash increased by $3.92 million in Q1 2025, driven by a $13.55 million inflow from investing activities, primarily real estate sales Q1 Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($118,905) | ($866,768) | | Net cash provided by investing activities | $13,553,064 | $9,168,562 | | Net cash used in financing activities | ($9,513,802) | ($7,652,790) | | **Net increase in cash** | **$3,920,357** | **$649,004** | - Net cash from investing activities was primarily driven by **$18.4 million** in proceeds from real estate sales, partially offset by **$4.3 million** in real estate acquisitions[16](index=16&type=chunk) - Financing activities included **$11.4 million** in mortgage repayments and **$0.58 million** in dividends paid to Series D Preferred Stockholders[16](index=16&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section reconciles non-GAAP metrics like EBITDAre and FFO and provides financial data by operating segment [EBITDAre Reconciliation](index=11&type=section&id=EBITDAre%20Reconciliation) EBITDAre improved significantly to $163,553 in Q1 2025 from a loss of ($879,905) in Q1 2024, indicating stronger operational performance EBITDAre Comparison (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net (loss) income to common stockholders | $1,685,777 | ($5,763,695) | | Net gain on sale of real estate | ($4,453,968) | ($2,018,095) | | **EBITDAre** | **$163,553** | **($879,905)** | [FFO and Core FFO Reconciliation](index=12&type=section&id=FFO%20and%20Core%20FFO%20Reconciliation) In Q1 2025, FFO declined to ($1.21 million) and Core FFO worsened to ($0.98 million) compared to the prior year FFO and Core FFO Comparison (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | FFO | ($1,209,945) | ($971,367) | | Core FFO | ($980,442) | ($429,445) | | Core FFO / Wgt Avg Share | ($0.076) | ($0.035) | [Segment Data](index=13&type=section&id=Segment%20Data) Q1 2025 Net Operating Income (NOI) was led by the Office/Industrial segment, though total NOI and segment assets declined year-over-year Net Operating Income (NOI) by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 NOI | Q1 2024 NOI | | :--- | :--- | :--- | | Retail | $162,710 | $413,435 | | Office/Industrial | $1,298,027 | $1,415,957 | | Model Homes | $865,610 | $1,227,721 | | **Total NOI** | **$2,512,542** | **$3,226,484** | Assets by Reportable Segment | Segment | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Office/Industrial Properties | $74,742,379 | $76,292,662 | | Model Home Properties | $39,778,198 | $38,166,964 | | Retail Properties | $4,772,995 | $16,673,605 | | **Total Segment Assets** | **$119,293,572** | **$131,133,231** | [Definitions – Non-GAAP Measurements](index=15&type=section&id=Definitions%20%E2%80%93NON-GAAP%20MEASUREMENTS) This section defines key non-GAAP financial measures used in the report, such as EBITDAre, FFO, and Core FFO [Definitions](index=15&type=section&id=Definitions) This section defines the non-GAAP measures EBITDAre, Funds from Operations (FFO), and Core Funds from Operations (Core FFO) - **EBITDAre:** Defined by NAREIT as earnings before interest, taxes, depreciation, amortization, gain/loss on asset disposal, and impairment write-offs[23](index=23&type=chunk) - **Funds from Operations (FFO):** Defined as net income excluding property sales gains/losses, plus depreciation and amortization, and impairment charges[24](index=24&type=chunk) - **Core Funds from Operations (Core FFO):** Calculated by adjusting FFO for non-core items such as acquisition costs, loss on debt extinguishment, and stock-based compensation amortization[26](index=26&type=chunk)

Core Viewpoint - Presidio Property Trust, Inc. will implement a 1-for-10 reverse stock split of its Series A Common Stock to comply with Nasdaq listing requirements [1][2][3] Group 1: Reverse Stock Split Details - The reverse stock split will take effect on May 19, 2025, with shares trading under the symbol "SQFT" and a new CUSIP number 74102L501 [2] - Every 10 shares of Series A Common Stock will be combined into 1 share, maintaining the same percentage ownership for stockholders, with adjustments for fractional shares [3] - Fractional shares will not be issued; instead, stockholders will receive an additional fraction of a share to round up to the nearest whole share [3] Group 2: Company Overview - Presidio is an internally managed real estate investment trust with a diversified portfolio including model home properties leased to homebuilders, as well as office, industrial, and retail properties [5] - The company's model homes are primarily located in the sunbelt region, while its other properties are mainly situated in Colorado, with additional locations in Maryland, North Dakota, Texas, and Southern California [5]

Part I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended March 31, 2025, including balance sheets, statements of operations, changes in equity, cash flows, and notes [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) As of March 31, 2025, total assets were **$135.4 million** and total equity **$36.6 million**, with Q1 2025 net income of **$2.38 million** ($0.13 per share) driven by real estate sales Consolidated Balance Sheet Highlights (Unaudited) | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total real estate assets, net | 117.4 million | 127.6 million | | Cash, cash equivalents and restricted cash | 12.0 million | 8.0 million | | **Total Assets** | **135.4 million** | **142.6 million** | | Total mortgage notes payable, net | 93.7 million | 102.1 million | | **Total Liabilities** | **98.9 million** | **107.6 million** | | **Total Equity** | **36.6 million** | **34.9 million** | Consolidated Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Total Revenue | 4.1 million | 4.8 million | | Gain on sales of real estate, net | 4.45 million | 2.02 million | | Net (loss) in Conduit Pharmaceuticals | (0.18 million) | (3.86 million) | | **Net (Loss) Income** | **2.38 million** | **(3.74 million)** | | **Net Income (Loss) Attributable to Common Stockholders** | **1.69 million** | **(5.76 million)** | | **Basic & Diluted EPS** | **0.13** | **(0.47)** | Consolidated Statement of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (0.12 million) | (0.87 million) | | Net Cash Provided by Investing Activities | 13.55 million | 9.17 million | | Net Cash Used in Financing Activities | (9.51 million) | (7.65 million) | | **Net Increase in Cash** | **3.92 million** | **0.65 million** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, real estate transactions, debt, equity, and segment performance, including Q1 2025 acquisitions, dispositions, and a stock repurchase program - In Q1 2025, the company acquired **12 model homes** for approximately **$4.3 million**[72](index=72&type=chunk) - In Q1 2025, the company sold two commercial properties (Union Town Center and Research Parkway) for **$17.0 million**, recognizing a net gain of **$4.2 million**, and also sold **6 model homes** for **$2.8 million**, with a gain of **$0.2 million**[75](index=75&type=chunk) - As of March 31, 2025, total mortgage notes payable amounted to **$94.4 million**, with the loan on the Dakota Center property in default and being marketed for sale to settle the non-recourse debt[86](index=86&type=chunk)[87](index=87&type=chunk) - The company repurchased **12,844 shares** of Series D Preferred Stock for approximately **$195,000** in Q1 2025, with no Series A Common Stock repurchased during the quarter[113](index=113&type=chunk)[202](index=202&type=chunk) - Subsequent to the quarter end, on April 8, 2025, the company commenced a self-tender offer to purchase up to **2,000,000 shares** of its Series A common stock at **$0.68 per share**, with **2,144,116 shares** accepted for purchase by May 5, 2025[114](index=114&type=chunk)[144](index=144&type=chunk) Segment Net Operating Income (NOI) (Unaudited) | Segment | Q1 2025 NOI ($) | Q1 2024 NOI ($) | | :--- | :--- | :--- | | Retail | 0.16 million | 0.41 million | | Office/Industrial | 1.30 million | 1.42 million | | Model Homes | 0.87 million | 1.23 million | | **Total NOI** | **2.33 million** | **3.06 million** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses operational results, liquidity, and capital resources, noting decreased revenues to **$4.1 million** in Q1 2025 and sufficient liquidity despite significant upcoming debt maturities Key Operational Results Comparison (Unaudited) | Metric | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Total Revenues | 4.1 million | 4.8 million | | Rental Operating Costs | 1.6 million | 1.6 million | | General & Administrative Expenses | 1.7 million | 2.1 million | | Interest Expense | 1.5 million | 1.5 million | - The decrease in revenue is primarily attributed to lower model home rental income and transaction fees, along with the sale of two commercial properties in February 2025[160](index=160&type=chunk) - General & Administrative expenses decreased by **$0.4 million**, partly due to lower consulting and legal fees compared to the prior year[163](index=163&type=chunk) - The company's liquidity position includes **$12.0 million** in cash and restricted cash as of March 31, 2025, which management believes will fund operations for at least the next 12 months, along with operating cash flow and refinancing ability[172](index=172&type=chunk)[174](index=174&type=chunk) - Significant near-term debt maturities include approximately **$27.8 million** due in the remainder of 2025 and **$18.4 million** in 2026, which management plans to address through sales, refinancing, or extensions[173](index=173&type=chunk) - No dividends were declared for Series A Common Stock in Q1 2025 or Q1 2024, while dividends of approximately **$0.6 million** were paid to Series D Preferred Stockholders in Q1 2025[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Presidio Property Trust, Inc. is not required to provide the disclosures typically found under this item - The company is not required to provide this disclosure as it qualifies as a smaller reporting company[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[198](index=198&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[199](index=199&type=chunk) Part II. OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that there are no material legal proceedings - None[200](index=200&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company did not report any new or materially changed risk factors from those previously disclosed in its Annual Report on Form 10-K - None[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity, including the repurchase of **12,844** Series D Preferred Stock shares for approximately **$195,000** in Q1 2025 - In December 2024, the Board authorized a stock repurchase program for up to **$6.0 million** of Series A Common Stock and **$4.0 million** of Series D Preferred Stock, expiring in December 2025[202](index=202&type=chunk) Stock Repurchases for Q1 2025 | Security | Shares Purchased | Average Price Paid ($) | Total Cost ($) | | :--- | :--- | :--- | :--- | | Series A Common Stock | 0 | - | - | | Series D Preferred Stock | 12,844 | 15.18 | 194,971 | [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports a maturity date default on a loan secured by the Dakota Center property, with a current default amount of approximately **$9.1 million** - The company received a notice of maturity date default on March 13, 2025, for a loan secured by the Dakota Center in Fargo, North Dakota[206](index=206&type=chunk) - The default amount is approximately **$9.1 million**, with a total arrearage of about **$0.4 million**, and the lender is also holding approximately **$1.6 million** in restricted cash sweep accounts[207](index=207&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[208](index=208&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended March 31, 2025[209](index=209&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications by the CEO and CFO as required by the Sarbanes-Oxley Act of 2002, and the Inline XBRL financial data files - The report includes required exhibits such as CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and Inline XBRL data files (Exhibits 101 and 104)[210](index=210&type=chunk)

Core Viewpoint - Presidio Property Trust, Inc. has initiated a tender offer to purchase odd lots and up to 2,000,000 shares of its Series A Common Stock at a price of $0.68 per share, set to expire on May 5, 2025 [1][3]. Group 1: Tender Offer Details - The tender offer is for all odd lots plus up to 2,000,000 shares of Series A Common Stock at a price of $0.68 per share [1]. - The offer will not be contingent upon a minimum number of shares being tendered or any financing conditions, but will be subject to other conditions [3]. - The Board has authorized the offer, but no recommendations are made to security holders regarding whether to tender their shares [4]. Group 2: Offer Process and Instructions - Stockholders must follow specific instructions outlined in the "Offer to Purchase" and related documents filed with the SEC to tender their shares [2]. - The depositary and paying agent for the offer is Broadridge Corporate Issuer Solutions, LLC, which will also serve as the information agent [5]. - Offer documents will be mailed to registered holders around April 10, 2025, and beneficial holders will receive communications from their banks or brokers [5]. Group 3: Company Overview - 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 [7]. - 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 [7].

Core Insights - Presidio Property Trust, Inc. reported a net loss of approximately $27.9 million for the year ended December 31, 2024, compared to a net gain of approximately $8.0 million for the previous year, reflecting a significant decline in profitability [5][30] - Total revenue increased by approximately $1.3 million or 7.3%, reaching approximately $18.9 million for the year ended December 31, 2024, driven by strong rent collections and new commercial leases [5][30] - The company successfully renewed 83% of expiring square footage during the fourth quarter of 2024, indicating a positive leasing outlook for 2025 [3] Financial Performance - The net loss attributable to common stockholders was approximately $2.25 per share for 2024, compared to a gain of $0.68 per share in 2023 [5][30] - General and administrative expenses rose to approximately $7.5 million in 2024, an increase of 10.8% from approximately $6.8 million in 2023, primarily due to costs associated with the annual meeting and legal fees [5][30] - Funds from Operations (FFO) improved by approximately $2.8 million, moving from $(6.2 million) in 2023 to $(3.4 million) in 2024 [7] Asset Management - As of December 31, 2024, the company had approximately $127.6 million in net real estate assets, a decrease from approximately $144.2 million in 2023, attributed to the sale of model homes and impairments [5][27] - The company acquired 19 model home properties for $9.7 million during 2024, which were leased back to homebuilders under triple net leases [9] - The company recognized a non-cash impairment charge of approximately $2.0 million on goodwill and real estate assets during 2024, with significant impairments related to commercial properties [6][30] Leasing and Sales Activity - In 2024, the company sold 51 model homes for approximately $24.8 million, realizing a gain of approximately $3.4 million [4][11] - The company entered into three leases with new tenants totaling nearly 23,000 square feet in the fourth quarter of 2024, contributing to a positive leasing outlook [3] Dividends - No distributions were declared for Series A Common Stock in 2024, while Series D Preferred Stock maintained a consistent distribution of $0.19531 per month [17][18]

[Company Overview](index=3&type=section&id=COMPANY%20OVERVIEW) Presidio Property Trust, Inc., founded in 1999, is an internally managed real estate company focused on acquiring, owning, and managing office and industrial assets, alongside a portfolio of model homes - Presidio Property Trust, Inc. operates as an internally managed real estate company, specializing in office and industrial assets and model homes since its founding in 1999[10](index=10&type=chunk) Corporate Information & Portfolio Value | Metric | Value | | :--- | :--- | | Headquarters | San Diego, CA | | Key Geographies | CA, CO, MD, ND & TX | | Employees | 15 | | Portfolio Book Value | $127.6 million | | Existing Secured Debt | $102.8 million | Portfolio Summary | Property Type | Count | Square Footage | | :--- | :--- | :--- | | Office | 8 properties | 608,076 sqft | | Retail | 3 properties | 65,242 sqft | | Industrial | 1 property | 150,099 sqft | | Model Homes | 78 homes | 236,955 sqft | [Portfolio Details](index=4&type=section&id=Portfolio%20Details) This section details the company's commercial and model homes portfolios, including property types, square footage, occupancy, and key transactional updates [Commercial Portfolio](index=4&type=section&id=COMMERCIAL%20PORTFOLIO) The commercial portfolio comprises 12 office, industrial, and retail properties totaling 823,417 sq. ft. with 81.8% occupancy, marked by recent impairments, sales, and ongoing leasing efforts Commercial Portfolio Overview (Office/Industrial & Retail) | Metric | Office/Industrial | Retail | | :--- | :--- | :--- | | Total Square Feet | 758,175 | 65,242 | | Occupancy | 81.0% | 86.2% | | Purchase Price | $91.9M | $19.0M | | Mortgage on Property | $60.6M | $13.0M | - The Dakota Center property was impaired by approximately **$0.7 million** and is being sold to settle its non-recourse loan balance[12](index=12&type=chunk) - In February 2025, the Union Town Center and Research Parkway properties were sold for a combined **$16.95 million**, resulting in an approximate gain of **$4.3 million**[12](index=12&type=chunk) - Following the expiration of the Halliburton lease at Shea Center II at the end of 2022, management is working to fill the vacant space, with approximately **54%** of the space leased as of February 2025[12](index=12&type=chunk) [Model Homes Portfolio](index=5&type=section&id=MODEL%20HOMES%20PORTFOLIO) The model homes portfolio consists of 78 properties totaling 236,955 square feet, with a significant concentration in Texas, accounting for 91.5% of the total annual rent Model Homes Portfolio by State | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | % of Aggregate Annual Rent | | :--- | :--- | :--- | :--- | :--- | :--- | | Arizona | 2 | 6,822 | 2.9% | $149,196 | 4.4% | | Florida | 3 | 8,199 | 3.4% | $136,812 | 4.1% | | Texas | 73 | 221,934 | 93.7% | $3,086,580 | 91.5% | | **Total** | **78** | **236,955** | **100.0%** | **$3,372,588** | **100.0%** | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheets, statements of operations, and cash flows, highlighting key financial performance and position changes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets decreased to **$142.6 million** from **$176.0 million** in 2023, primarily due to reduced real estate assets and a significant write-down of Conduit Pharmaceuticals securities, leading to a decline in total equity Consolidated Balance Sheet Summary (in millions) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Real estate assets, net | $127.6 | $144.2 | | Investment in Conduit Pharma securities | $0.2 | $18.3 | | **Total Assets** | **$142.6** | **$176.0** | | Mortgage notes payable, total net | $102.1 | $107.7 | | **Total Liabilities** | **$107.6** | **$114.6** | | **Total Equity** | **$34.9** | **$61.3** | - The value of the investment in Conduit Pharmaceuticals marketable securities plummeted from **$18.3 million** at year-end 2023 to **$206,177** at year-end 2024[15](index=15&type=chunk) - Real estate assets held for sale increased significantly from **$5.5 million** in 2023 to **$22.2 million** in 2024, reflecting management's strategy to sell certain properties[15](index=15&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For the year ended December 31, 2024, the company reported a net loss of **$27.9 million**, or **$(2.25)** per share, a significant decline from 2023's net income, primarily due to a **$17.9 million** loss on Conduit Pharmaceuticals securities and the absence of a prior-year **$40.3 million** SPAC deconsolidation gain Consolidated Statement of Operations Summary | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $18,925,275 | $17,635,614 | | Net loss in Conduit Pharma securities | $(17,925,723) | $(23,359,774) | | Gain on deconsolidation of SPAC | — | $40,321,483 | | Net (loss) income attributable to common stockholders | $(27,865,225) | $8,027,600 | | Basic & Diluted (loss) income per share | $(2.25) | $0.68 | - Total revenue increased by **7.3%** year-over-year, from **$17.6 million** in 2023 to **$18.9 million** in 2024[17](index=17&type=chunk) - A significant factor in the 2024 net loss was the **$17.9 million** loss on Conduit Pharmaceuticals marketable securities, while the 2023 net income was heavily influenced by a one-time **$40.3 million** gain on the deconsolidation of a SPAC[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2024, the company reported a net cash outflow from operating activities of **$0.7 million**, a reversal from 2023, while investing activities provided **$12.9 million** primarily from real estate sales, leading to a **$1.5 million** increase in cash to **$8.0 million** by year-end Consolidated Cash Flow Summary | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(728,060) | $1,448,573 | | Net cash provided by investing activities | $12,866,819 | $120,598,553 | | Net cash (used in) financing activities | $(10,612,691) | $(132,053,423) | | **Net increase (decrease) in cash** | **$1,526,068** | **$(10,006,297)** | | **Cash at end of period** | **$8,036,496** | **$6,510,428** | - The shift to negative operating cash flow was primarily due to the large net loss, despite non-cash adjustments like the loss on marketable securities[19](index=19&type=chunk) - Investing activities were a significant source of cash in 2024, driven by **$24.8 million** in proceeds from real estate sales, which offset **$9.7 million** in real estate acquisitions[19](index=19&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides reconciliations for key non-GAAP financial measures, including EBITDAre, FFO, and Core FFO, detailing their calculation and performance [EBITDAre Reconciliation](index=10&type=section&id=EBITDAre%20RECONCILIATION) The company's EBITDAre improved to **$225,724** in 2024 from a negative **$(251,757)** in 2023, despite a significant net loss, primarily due to substantial add-backs for non-cash expenses and a smaller securities loss adjustment EBITDAre Reconciliation Summary | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net (loss) income attributable to common stockholders | $(27,865,225) | $8,027,600 | | Adjustments (Interest, D&A, Impairment, etc.) | $28,090,949 | $(8,279,357) | | **EBITDAre** | **$225,724** | **$(251,757)** | [FFO and Core FFO Reconciliation](index=11&type=section&id=FFO%20AND%20CORE%20FFO%20RECONCILIATION) Both FFO and Core FFO declined in 2024, with FFO worsening to **$(3.4) million** and Core FFO decreasing to **$(2.0) million**, resulting in a Core FFO per share of **$(0.160)**, and no common stock dividends were paid FFO and Core FFO Summary | Metric | 2024 | 2023 | | :--- | :--- | :--- | | FFO | $(3,360,660) | $(1,889,786) | | Core FFO | $(1,981,580) | $(900,271) | | Core FFO / Share | $(0.160) | $(0.076) | | Quarterly Dividends / Share | $— | $0.091 | [Segment Data](index=12&type=section&id=SEGMENT%20DATA) This section provides a breakdown of financial performance and assets by the company's reportable segments: Retail, Office/Industrial, and Model Homes - All three reportable segments—Retail, Office/Industrial, and Model Homes—demonstrated year-over-year growth in Net Operating Income (NOI) for 2024[26](index=26&type=chunk) Net Operating Income (NOI) by Segment | Segment | 2024 NOI | 2023 NOI | | :--- | :--- | :--- | | Retail | $1,511,996 | $1,346,941 | | Office/Industrial | $6,201,988 | $5,673,913 | | Model Homes | $4,264,632 | $3,975,636 | Assets by Reportable Segment | Segment | 2024 Total Assets | 2023 Total Assets | | :--- | :--- | :--- | | Office/Industrial | $76,292,662 | $78,140,372 | | Model Home Properties | $38,166,964 | $51,456,292 | | Retail Properties | $16,673,605 | $16,539,399 | | **Total Segment Assets** | **$131,133,231** | **$146,136,063** | - Total assets for reportable segments decreased from **$146.1 million** in 2023 to **$131.1 million** in 2024, with the most significant reduction occurring in the Model Home Properties segment[27](index=27&type=chunk) [Definitions – Non-GAAP Measurements](index=14&type=section&id=DEFINITIONS%20%E2%80%93%20NON-GAAP%20MEASUREMENTS) This section provides the formal definitions for key non-GAAP financial measures used by the company, including EBITDAre, FFO, and Core FFO - EBITDAre is defined as earnings before interest, taxes, depreciation, amortization, gain/loss on disposal of depreciated assets, and impairment write-offs[29](index=29&type=chunk) - Funds from Operations (FFO) is a non-GAAP measure defined as net income or loss, excluding gains or losses from property sales and impairment charges, and adding back depreciation and amortization[30](index=30&type=chunk) - Core Funds from Operations (Core FFO) is calculated by adjusting FFO for non-core items such as acquisition costs, loss on early extinguishment of debt, and the amortization of stock-based compensation[32](index=32&type=chunk)