Core Insights - Presidio Property Trust, Inc. has engaged Acorn Management Partners LLC to enhance its visibility and strengthen market perception [1] - The partnership aims to expand access to high-quality investors [1] Company Engagement - The engagement with Acorn is expected to improve the company's market presence [1] - The collaboration is part of a strategic initiative to attract more investors [1]

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 impairment of model homes was reported at $(200,625), reflecting challenges in the model home segment[24] 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] - 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] - 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] Assets and Liabilities - As of September 30, 2025, the total assets of the company amount to $127.8 million, a decrease from $142.6 million as of December 31, 2024[15] - 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] - Total stockholders' equity decreased to approximately $29.3 million as of September 30, 2025, from $34.9 million as of December 31, 2024[15] - Total assets decreased from $142,569,650 as of December 31, 2024, to $127,808,885 as of September 30, 2025, indicating a reduction in asset base[27] 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] Revenue Breakdown - 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] Operational Activities - 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[12] - Rental operating costs totaled $4,609,810, with general and administrative expenses at $4,335,697, highlighting the cost structure of the business[26] Other Income and Expenses - The company recorded a gain on sales of real estate amounting to $5,078,302, contributing positively to the overall financial results[26] - The company’s total other income (expense), net, was $408,203, influenced by various factors including interest expenses and gains on real estate sales[26] Shareholder Information - Weighted average number of common shares outstanding for the three months ended September 30, 2025, was 1,215,943[21] Performance Metrics - The company defines Funds from Operations (FFO) as a key performance metric, which excludes gains from property sales and includes depreciation and amortization adjustments[30]

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] - The company reported a net loss of $3,955,918 for the nine months ended September 30, 2025, compared to a net loss of $20,820,853 for the same period in 2024[19] - The company recorded a net loss attributable to stockholders of $4,302,021, primarily driven by significant impairments and interest expenses[134] - 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] 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[17] - Mortgage notes payable, total net, decreased to $93,719,413 as of September 30, 2025, from $102,094,094 as of December 31, 2024[17] - The company has accumulated losses of $165,400,881 as of September 30, 2025[21] Cash Flow and Financing - Cash flows from operating activities resulted in a net cash used of $380,224 for the nine months ended September 30, 2025, compared to $658,434 in the prior year, reflecting a reduction in cash outflow[25] - The company reported net cash provided by investing activities of $11,433,947 for the nine months ended September 30, 2025, compared to $10,664,729 in 2024, showing an increase in cash inflow from investments[25] - The company raised $18,942,396 from mortgage notes payable, net of issuance costs, for the nine months ended September 30, 2025, compared to $13,602,291 in 2024, reflecting increased financing activity[25] - Total cash, cash equivalents, and restricted cash at the end of the period was $8,002,915, a decrease from $8,036,496 at the beginning of the period[25] Impairments and Expenses - The company incurred impairment of goodwill and real estate assets amounting to $4,427,245 for the nine months ended September 30, 2025[19] - General and administrative expenses were significant at $4,335,697, indicating a focus on operational overhead[134] - The company recognized non-cash impairment charges of approximately $4.4 million and $0.9 million for the nine months ended September 30, 2025 and 2024, respectively, related to commercial properties and model homes[54] Stock and Dividends - Dividends paid to Series D preferred stockholders amount to $574,096 for the current period[21] - The company declared and paid approximately $1.7 million in cash dividends on Series D Preferred Stock for both the nine months ended September 30, 2025, and 2024[116] - 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] Real Estate Operations - The company reported a gain on sales of real estate of $5,078,302 for the nine months ended September 30, 2025, compared to $3,191,149 for the same period in 2024[19] - The company recognized a net gain of approximately $4.5 million from the sale of Union Town Center and Research Parkway for approximately $15.9 million, net of selling costs[77] - The company sold all remaining shares of Conduit Pharmaceuticals for a total of $13,990 during the nine months ended September 30, 2025[57] Future Outlook - The company anticipates future liquidity sources to include cash flows from operations, refinancing existing mortgages, and potential real estate sales[35] - 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 is monitoring economic factors such as interest rate increases and geopolitical conflicts that could impact its commercial real estate portfolio[98] 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 entered into a cooperation agreement with an activist stockholder group, resulting in the appointment of a new director[95] - The Board of Directors authorized a stock repurchase program of up to $6.0 million for Series A Common Stock and $4.0 million for Series D Preferred Stock, expiring in December 2025[114]

SUPPLEMENTAL FINANCIAL INFORMATION As of June 30, 2025 FORWARD-LOOKING STATEMENTS Exhibit 99.2 This presentation contains "forward-looking statements" within the meaning of the federal securities laws that involve risks and uncertainties, many of which are beyond our control. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Quarterly Report on Form 10-Q. Forward-looking statemen ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________ FORM 10-Q ___________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period from _____ to _____ 001-34049 (Commission File N ...

[Forward-Looking Statements](index=2&type=section&id=FORWARD-LOOKING%20STATEMENTS) The company issues standard forward-looking statements, cautioning that actual results may differ due to risks detailed in its SEC filings [Forward-Looking Statements Overview](index=2&type=section&id=Forward-Looking%20Statements%20Overview) The company issues standard forward-looking statements, cautioning that actual results may differ due to risks detailed in its SEC filings - The presentation contains forward-looking statements subject to risks and uncertainties, with actual results potentially differing materially from anticipations[3](index=3&type=chunk) - Forward-looking statements are based on historical performance and management's current plans, estimates, and expectations, and are subject to changes in circumstances and various factors described in the 'Risk Factors' section of the Annual and Quarterly Reports[4](index=4&type=chunk) [Company Overview](index=3&type=section&id=COMPANY%20OVERVIEW) Presidio Property Trust, Inc. is an internally managed real estate company focused on commercial properties and model homes [Corporate Information](index=3&type=section&id=Corporate%20Information) Presidio Property Trust, Inc., founded in 1999, is an internally managed real estate company focused on commercial properties and model homes Corporate Information | Metric | Detail | | :--- | :--- | | Headquarters | San Diego, CA | | Founded | 1999 | | Key Geographies | CA, CO, MD, ND & TX | | Employees | 14 | [Portfolio Summary & Strategy](index=3&type=section&id=Portfolio%20Summary%20%26%20Strategy) The company's portfolio, valued at **$117.4 million** with **$93.7 million** in debt, focuses on commercial real estate and model homes Property Portfolio Breakdown | Property Type | Number of Properties | Square Footage | | :--- | :--- | :--- | | Office | 8 | 608,076 sqft. | | Retail | 1 | 10,500 sqft. | | Industrial | 1 | 150,099 sqft. | | Model Homes | 84 | 248,412 sqft | Portfolio Financial Metrics | Metric | Value | | :--- | :--- | | Book Value | $117.4 million | | Existing Secured Debt | $93.7 million | - Presidio is an internally managed real estate company focused on commercial real estate opportunities in often overlooked and regionally dominant markets, acquiring, owning, and managing office and industrial assets with attractive going-in cap rates[8](index=8&type=chunk) [Portfolio Details](index=4&type=section&id=PORTFOLIO%20DETAILS) The company's portfolio details include commercial properties and model homes, with recent sales and impairment charges impacting valuations [Commercial Portfolio](index=4&type=section&id=COMMERCIAL%20PORTFOLIO) The commercial portfolio's book value decreased to **$78.5 million** due to property sales and impairment charges, with ongoing leasing efforts Commercial Property Values | Property Name | Location | March 31, 2025 Value (USD) | December 31, 2024 Value (USD) | | :--- | :--- | :--- | :--- | | Genesis Plaza | San Diego, CA | $7,273,346 | $7,363,571 | | Dakota Center | Fargo, ND | $8,154,951 | $8,154,951 | | Grand Pacific Center | Bismarck, ND | $8,380,905 | $8,413,926 | | Arapahoe Center | Centennial, CO | $9,173,855 | $9,298,534 | | Union Town Center | Colorado Springs, CO | — | $8,922,943 | | West Fargo Industrial | Fargo, ND | $6,531,693 | $6,599,953 | | 300 N.P. | Fargo, ND | $2,026,816 | $1,963,000 | | Research Parkway | Colorado Springs, CO | — | $2,220,284 | | One Park Center | Westminster, CO | $5,587,080 | $5,580,950 | | Shea Center II | Highlands Ranch, CO | $18,609,105 | $18,820,370 | | Mandolin | Houston, TX | $4,577,635 | $4,600,562 | | Baltimore | Baltimore, MD | $8,185,279 | $8,241,456 | | **Commercial properties total** | | **$78,500,665** | **$90,180,500** | - During February 2025, Union Town Center and Research Parkway were sold for a combined **$16.95 million**, resulting in a net gain of approximately **$4.2 million**[9](index=9&type=chunk) - The Dakota Center property was impaired by approximately **$0.7 million** as of September 30, 2024, and is now held for sale to settle its non-recourse loan[9](index=9&type=chunk) [Model Homes Portfolio](index=6&type=section&id=MODEL%20HOMES%20PORTFOLIO) The model homes portfolio, comprising **84 homes** and generating **$3.56 million** in annual rent, recorded a **$26,943** impairment charge in Q1 2025 Model Homes Portfolio by State | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent (USD) | % 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%** | - An impairment charge of **$26,943** was recorded for model homes during the three months ended March 31, 2025, reflecting estimated sales prices[9](index=9&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) The consolidated financial statements provide an overview of the company's balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$135.4 million** as of March 31, 2025, while total liabilities decreased to **$98.9 million**, and total equity increased to **$36.6 million** Consolidated Balance Sheet Summary | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Real estate assets, net | $117,366,015 | $127,596,500 | -$10,230,485 | | Real estate assets held for sale, net | $12,515,912 | $22,185,742 | -$9,669,830 | | Total Assets | $135,424,916 | $142,569,650 | -$7,144,734 | | **Liabilities** | | | | | Mortgage notes payable, total net | $93,742,547 | $102,094,094 | -$8,351,547 | | Total Liabilities | $98,864,550 | $107,624,495 | -$8,759,945 | | **Equity** | | | | | Total equity | $36,560,366 | $34,945,155 | +$1,615,211 | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) The company achieved a net income of **$1.69 million** in Q1 2025, a significant improvement from a **$5.76 million** net loss year-over-year, despite a **13.9%** revenue decrease Consolidated Statements of Operations Summary | Metric | Q1 2025 (USD) | Q1 2024 (USD) | YoY Change | | :--- | :--- | :--- | :--- | | Total revenue | $4,125,184 | $4,790,061 | -13.9% | | Total costs and expenses | $4,545,667 | $5,094,593 | -10.8% | | Gain on sales of real estate, net | $4,453,968 | $2,018,095 | +120.7% | | Net loss in Conduit Pharmaceuticals marketable securities | ($176,658) | ($3,861,233) | +95.4% (reduction in loss) | | Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders | $1,685,777 | ($5,763,695) | N/A (swing to profit) | | Basic & Diluted EPS | $0.13 | ($0.47) | N/A (swing to profit) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to **$0.12 million** in Q1 2025, while investing activities provided **$13.55 million**, leading to a **$3.92 million** increase in cash and equivalents Consolidated Statements of Cash Flows Summary | Cash Flow Activity | Q1 2025 (USD) | Q1 2024 (USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ($118,905) | ($866,768) | +86.3% (reduction in use) | | Net cash provided by investing activities | $13,553,064 | $9,168,562 | +47.8% | | Net cash used in financing activities | ($9,513,802) | ($7,652,790) | -24.3% (increase in use) | | Net (decrease) increase in cash equivalents and restricted cash | $3,920,357 | $649,004 | +504.1% | | Cash, cash equivalents and restricted cash - end of period | $11,956,853 | $7,159,432 | +67.0% | - Proceeds from sales of real estate, net, significantly increased to **$18.39 million** in Q1 2025 from **$12.64 million** in Q1 2024, contributing to the rise in investing cash flows[16](index=16&type=chunk) - Repayment of mortgage notes payable increased to **$11.38 million** in Q1 2025 from **$7.86 million** in Q1 2024[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=11&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section provides reconciliations for non-GAAP financial measures, including EBITDAre, FFO, and Core FFO [EBITDAre Reconciliation](index=11&type=section&id=EBITDAre%20RECONCILIATION) EBITDAre for Q1 2025 was **$0.16 million**, a significant improvement from a negative **$0.88 million** year-over-year, driven by real estate sales and reduced marketable securities losses EBITDAre Reconciliation Summary | Metric | Q1 2025 (USD) | Q1 2024 (USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders | $1,685,777 | ($5,763,695) | N/A (swing to profit) | | Net gain on sale of real estate | ($4,453,968) | ($2,018,095) | -120.7% (larger gain) | | Net loss on marketable securities | $176,658 | $3,861,793 | -95.4% (smaller loss) | | **EBITDAre** | **$163,553** | **($879,905)** | N/A (swing to positive) | [FFO and Core FFO Reconciliation](index=12&type=section&id=FFO%20AND%20CORE%20FFO%20RECONCILIATION) FFO for Q1 2025 was a negative **$1.21 million**, and Core FFO was a negative **$0.98 million**, both worsening year-over-year, with Core FFO per share at **($0.076)** FFO and Core FFO Reconciliation Summary | Metric | Q1 2025 (USD) | Q1 2024 (USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders | $1,685,777 | ($5,763,695) | N/A (swing to profit) | | Net gain on sale of real estate assets | ($4,453,968) | ($2,018,095) | -120.7% (larger gain) | | **FFO** | **($1,209,945)** | **($971,367)** | -24.6% (larger loss) | | **Core FFO** | **($980,442)** | **($429,445)** | -128.3% (larger loss) | | Core FFO / Wgt Avg Share | ($0.076) | ($0.035) | -117.1% (larger loss per share) | [Segment Data](index=13&type=section&id=SEGMENT%20DATA) Segment data provides a breakdown of operating performance (NOI) and assets across different property types [Segment Operating Performance (NOI)](index=13&type=section&id=Segment%20Operating%20Performance%20(NOI)) Total revenues decreased to **$4.13 million** in Q1 2025, with Net Operating Income (NOI) declining across all segments, notably **Retail NOI by 60.6%** Segment Operating Performance (NOI) Summary | Metric | Q1 2025 (USD) | Q1 2024 (USD) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | | | | | Retail | $263,278 | $553,389 | -52.4% | | Office/Industrial | $2,916,392 | $2,961,520 | -1.5% | | Model Homes | $913,767 | $1,268,951 | -28.0% | | **Net Operating Income (NOI)** | | | | | Retail | $162,710 | $413,435 | -60.6% | | Office/Industrial | $1,298,027 | $1,415,957 | -8.3% | | Model Homes | $865,610 | $1,227,721 | -29.5% | | **Adjusted NOI** | | | | | Retail | $162,710 | $413,435 | -60.6% | | Office/Industrial | $1,298,027 | $1,415,957 | -8.3% | | Model Homes | $1,079,566 | $3,150,268 | -65.8% | | **Total Adjusted NOI** | **$2,726,498** | **$5,149,031** | **-47.0%** | - Gain on Sale - Model Homes decreased significantly from **$2,018,095** in Q1 2024 to **$240,899** in Q1 2025, impacting Adjusted NOI[20](index=20&type=chunk) [Segment Assets](index=14&type=section&id=Segment%20Assets) Total assets for reportable segments decreased to **$119.29 million** as of March 31, 2025, with Retail Properties experiencing the most significant decline Segment Assets Summary | Segment | March 31, 2025 Total Assets (USD) | December 31, 2024 Total Assets (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Office/Industrial Properties | $74,742,379 | $76,292,662 | -$1,550,283 | | Model Home Properties | $39,778,198 | $38,166,964 | +$1,611,234 | | Retail Properties | $4,772,995 | $16,673,605 | -$11,900,610 | | **Total assets for reportable segments** | **$119,293,572** | **$131,133,231** | **-$11,839,659** | [Non-GAAP Measurements Definitions](index=15&type=section&id=NON-GAAP%20MEASUREMENTS%20DEFINITIONS) This section provides definitions for non-GAAP financial measures used by the company [Non-GAAP Measurements Definitions Overview](index=15&type=section&id=Non-GAAP%20Measurements%20Definitions%20Overview) This section defines non-GAAP financial measures, including EBITDAre, FFO, and Core FFO, along with caveats regarding their utility and comparability - EBITDAre is defined by NAREIT as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs[23](index=23&type=chunk) - FFO is defined as net income or loss (GAAP), excluding gains/losses from property sales, plus depreciation and amortization, and impairment charges, with adjustments for non-consolidated REITs[24](index=24&type=chunk) - Core FFO is calculated by adjusting FFO for certain non-core items such as acquisition costs, loss on early extinguishment of debt, changes in fair value, non-cash warrant dividends, other non-recurring expenses, and amortization of stock-based compensation[26](index=26&type=chunk) - The utility of FFO as a measure of performance is limited because it excludes depreciation, amortization, and changes in property value, which have real economic effects. FFO and Core FFO may not be comparable to those of other REITs[25](index=25&type=chunk)[27](index=27&type=chunk)

[PART I — FINANCIAL INFORMATION](index=6&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2025 and 2024 [ITEM 1. FINANCIAL STATEMENTS](index=6&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for Presidio Property Trust, Inc. and its subsidiaries for the three months ended March 31, 2025 and 2024, including balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes explaining the company's organization, accounting policies, recent real estate transactions, and other financial disclosures [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of March 31, 2025, and December 31, 2024 Consolidated Balance Sheets (in USD) | Metric | March 31, 2025 (unaudited) | December 31, 2024 | | :--------------------------------------- | :------------------------- | :------------------ | | **Assets** | | | | Real estate assets, net | $117,366,015 | $127,596,500 | | Cash, cash equivalents and restricted cash | $11,956,853 | $8,036,496 | | Total Assets | $135,424,916 | $142,569,650 | | **Liabilities** | | | | Mortgage notes payable, total net | $93,742,547 | $102,094,094 | | Total Liabilities | $98,864,550 | $107,624,495 | | **Equity** | | | | Total equity | $36,560,366 | $34,945,155 | - Total assets decreased by approximately **$7.1 million** from December 31, 2024, to March 31, 2025, primarily due to a reduction in real estate assets, net, and mortgage notes payable[17](index=17&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This statement outlines the company's revenues, expenses, and net income or loss for the three months ended March 31, 2025, and 2024 Consolidated Statements of Operations (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Total revenue | $4,125,184 | $4,790,061 | | Total costs and expenses | $4,545,667 | $5,094,593 | | Net (loss) income | $2,376,915 | $(3,737,795) | | Net income (loss) attributable to Presidio Property Trust, Inc. stockholders | $2,265,352 | $(5,241,663) | | Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders | $1,685,777 | $(5,763,695) | | Basic & Diluted EPS | $0.13 | $(0.47) | - The company reported a net income of **$2.38 million** for the three months ended March 31, 2025, a significant improvement from a net loss of **$3.74 million** in the prior-year period, primarily driven by a substantial gain on sales of real estate[19](index=19&type=chunk) - Total revenue decreased by approximately **13.9%** year-over-year, from **$4.79 million** in Q1 2024 to **$4.13 million** in Q1 2025[19](index=19&type=chunk) [Consolidated Statements of Changes in Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement details the changes in the company's total equity, including stockholders' equity and noncontrolling interests, over the three months ended March 31, 2025 Consolidated Statements of Changes in Equity (in USD) | Metric | Balance, December 31, 2024 | Balance, March 31, 2025 | | :------------------------------------ | :------------------------- | :---------------------- | | Total Stockholders' Equity | $26,535,146 | $28,255,453 | | Noncontrolling Interests | $8,410,009 | $8,304,913 | | Total Equity | $34,945,155 | $36,560,366 | - Total equity increased by **$1.62 million** from December 31, 2024, to March 31, 2025, primarily due to net income of **$2.27 million** attributable to Presidio Property Trust, Inc. stockholders, partially offset by preferred stock dividends and repurchase[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 Consolidated Statements of Cash Flows (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 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 (decrease) increase in cash equivalents and restricted cash | $3,920,357 | $649,004 | | Cash, cash equivalents and restricted cash - end of period | $11,956,853 | $7,159,432 | - Net cash provided by investing activities significantly increased to **$13.55 million** in Q1 2025 from **$9.17 million** in Q1 2024, primarily due to higher proceeds from real estate sales[23](index=23&type=chunk) - Net cash used in operating activities improved from **$(866,768)** in Q1 2024 to **$(118,905)** in Q1 2025[23](index=23&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the consolidated financial statements, covering accounting policies, transactions, and other disclosures [1. ORGANIZATION AND BASIS OF PRESENTATION](index=10&type=section&id=1.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's structure as an internally-managed REIT, its property holdings, and the basis for financial statement preparation - Presidio Property Trust, Inc. is an internally-managed REIT with holdings in office, industrial, retail, and model home properties, operating through various subsidiaries and partnerships[25](index=25&type=chunk) - The company has elected to be taxed as a REIT and is generally not subject to corporate-level income tax on distributed earnings from REIT qualifying activities[28](index=28&type=chunk) - Short-term liquidity needs include operating costs, debt service, tenant improvements, leasing commissions, and dividends; management believes existing working capital and refinancing capabilities will fund operations for at least the next twelve months[32](index=32&type=chunk)[33](index=33&type=chunk) [2. SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the financial statements, including consolidation and impairment policies - No significant changes to accounting policies since the 2024 Annual Report; financial statements are prepared in accordance with GAAP for interim reporting[34](index=34&type=chunk)[35](index=35&type=chunk) - The company consolidates its subsidiaries and partnerships, including NetREIT Partnerships and Model Home Partnerships, where it directs activities and has control[37](index=37&type=chunk) - Impairment charges of approximately **$26,943** and **$0.1 million** were recognized for model homes during the three months ended March 31, 2025 and 2024, respectively, reflecting estimated sales prices due to short hold periods and builder model changes[51](index=51&type=chunk)[52](index=52&type=chunk) [3. RECENT REAL ESTATE TRANSACTIONS](index=17&type=section&id=3.%20RECENT%20REAL%20ESTATE%20TRANSACTIONS) This note details the company's property acquisitions and dispositions during the three months ended March 31, 2025, and 2024 - Acquisitions (Q1 2025): **12 model homes** for approximately **$4.3 million** (cash: **$3.0 million**, mortgage notes: **$1.3 million**)[72](index=72&type=chunk) - Acquisitions (Q1 2024): **5 model homes** for approximately **$2.2 million** (cash: **$0.6 million**, mortgage notes: **$1.6 million**)[73](index=73&type=chunk) - Dispositions (Q1 2025): Sold two commercial properties (Union Town Center and Research Parkway) for **$17.0 million**, recognizing a net gain of **$4.2 million**; also sold **6 model homes** for **$2.8 million**, recognizing a gain of **$0.2 million**[75](index=75&type=chunk) - Dispositions (Q1 2024): Sold **27 model homes** for **$12.6 million**, recognizing a gain of **$2.0 million**[74](index=74&type=chunk) [4. REAL ESTATE ASSETS](index=18&type=section&id=4.%20REAL%20ESTATE%20ASSETS) This note provides a breakdown of the company's real estate portfolio, including commercial and model home properties, and their net carrying values - As of March 31, 2025, the company owned **8 office buildings**, **1 industrial property**, **1 retail building**, and **84 model home residential properties**[78](index=78&type=chunk) Real Estate Assets (in USD) | Property Type | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :--------------- | :---------------- | | Commercial properties, net | $78,500,665 | $90,180,500 | | Model Home properties, net | $38,865,350 | $37,416,000 | | Total real estate assets and lease intangibles, net | $117,366,015 | $127,596,500 | - Two commercial properties (Union Town Center and Research Parkway) were sold in February 2025, and Dakota Center was classified as held for sale due to loan maturity and market uncertainties[82](index=82&type=chunk) [5. LEASE INTANGIBLES](index=19&type=section&id=5.%20LEASE%20INTANGIBLES) This note details the net value of acquired intangible assets and liabilities related to in-place, above-market, and below-market leases Lease Intangibles (net, in USD) | Lease Intangible | March 31, 2025 (net) | December 31, 2024 (net) | | :----------------- | :------------------- | :---------------------- | | In-place leases | $8,020 | $10,465 | | Leasing costs | $7,375 | $9,312 | | Above-market leases | $0 | $0 | | Total | $15,395 | $19,777 | - The net value of acquired intangible liabilities related to below-market leases was approximately **$7,047** at March 31, 2025, down from **$8,625** at December 31, 2024[83](index=83&type=chunk) [6. OTHER ASSETS](index=20&type=section&id=6.%20OTHER%20ASSETS) This note presents a breakdown of other assets, including deferred rent receivable, prepaid expenses, notes receivable, and right-of-use assets Other Assets (in USD) | Other Asset | March 31, 2025 | December 31, 2024 | | :-------------------------- | :--------------- | :---------------- | | Deferred rent receivable | $1,937,513 | $2,126,609 | | Prepaid expenses, deposits and other | $484,752 | $406,494 | | Notes receivable | $316,374 | $316,374 | | Accounts receivable, net | $96,628 | $463,194 | | Deferred offering costs | $60,000 | $0 | | Right-of-use assets, net | $58,010 | $64,026 | | Total other assets | $2,953,277 | $3,376,697 | - Total other assets decreased from **$3.38 million** at December 31, 2024, to **$2.95 million** at March 31, 2025, primarily due to a reduction in deferred rent receivable and accounts receivable[85](index=85&type=chunk) [7. MORTGAGE NOTES PAYABLE](index=21&type=section&id=7.%20MORTGAGE%20NOTES%20PAYABLE) This note details the company's mortgage debt, including principal balances, unamortized loan costs, and scheduled principal payments Mortgage Notes Payable (Principal, in USD) | Mortgage Note Type | March 31, 2025 (Principal) | December 31, 2024 (Principal) | | :------------------------- | :------------------------- | :-------------------------- | | Presidio Property Trust, Inc. Properties | $67,364,842 | $76,781,271 | | Model Home mortgage notes | $27,076,548 | $26,060,798 | | Total Mortgage Notes Payable | $94,441,390 | $102,842,069 | | Unamortized loan costs | $(698,843) | $(747,975) | | Mortgage Notes Payable, net | $93,742,547 | $102,094,094 | - Total net mortgage notes payable decreased by approximately **$8.35 million** from December 31, 2024, to March 31, 2025, mainly due to the sale of two commercial properties and repayment of associated loans[86](index=86&type=chunk) - Scheduled principal payments for mortgage notes payable total approximately **$27.8 million** for the remainder of 2025 and **$18.4 million** for 2026[88](index=88&type=chunk) - The Dakota Center loan matured on July 6, 2024, and management has agreed with the lender to sell the property to settle the loan balance, with the property classified as held for sale[86](index=86&type=chunk) [8. NOTES PAYABLE](index=22&type=section&id=8.%20NOTES%20PAYABLE) This note outlines the company's other notes payable, including the SBA EIDL loan and a promissory note to Dubose Model Home Investors - The principal balance on the SBA Economic Injury Disaster Loan (EIDL) was approximately **$143,229** as of March 31, 2025, down from **$144,089** at December 31, 2024[89](index=89&type=chunk) - A promissory note issued to Dubose Model Home Investors 202 LP for **$0.3 million** was paid in full in October 2024 after the related property was sold[90](index=90&type=chunk) [9. INVESTMENT IN CONDUIT PHARMACEUTICALS](index=22&type=section&id=9.%20INVESTMENT%20IN%20CONDUIT%20PHARMACEUTICALS) This note describes the company's equity investment in Conduit Pharmaceuticals Inc., including shareholdings, warrants, and fair value adjustments - As of March 31, 2025, the company held **29,431 shares** of Conduit Pharmaceuticals Inc. (CDT) and various warrants, with a combined fair value of approximately **$29,519**[92](index=92&type=chunk) - Conduit Pharmaceuticals Inc. executed a **1-for-100 reverse stock split** in January 2025, reducing the company's CDT shares from **2,944,514** to **29,431**[91](index=91&type=chunk) - A net loss of approximately **$0.2 million** was recorded in Q1 2025 due to fair value adjustments of Conduit Pharmaceuticals marketable securities, a significant improvement from a **$3.9 million** loss in Q1 2024[170](index=170&type=chunk) [10. COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's estimated capital expenditures, resolution of a proxy contest, and absence of material litigation or environmental liabilities - Approximately **$1.8 million** is estimated for capital expenditures on existing properties for the remainder of 2025[93](index=93&type=chunk) - The company resolved a proxy contest with an activist stockholder group by appointing Elena Piliptchak to its board of directors in May 2024[94](index=94&type=chunk) - The company is not currently subject to any material litigation or environmental liabilities that would materially affect its financial condition[95](index=95&type=chunk)[96](index=96&type=chunk) [11. STOCKHOLDERS' EQUITY](index=23&type=section&id=11.%20STOCKHOLDERS%27%20EQUITY) This note details the company's authorized and outstanding shares of common and preferred stock, dividend policies, and stock repurchase programs - The company is authorized to issue up to **1,000,000 shares** of Preferred Stock and **100,000,000 shares** of Series A Common Stock[98](index=98&type=chunk)[108](index=108&type=chunk) - Holders of Series D Preferred Stock are entitled to cumulative cash dividends at **9.375% per annum** (**$2.34375 per share annually**), payable monthly[101](index=101&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 in December 2025[112](index=112&type=chunk) - During Q1 2025, the company repurchased **12,844 shares** of Series D Preferred Stock for approximately **$194,971**[113](index=113&type=chunk) - A fixed-price self-tender offer for Series A common stock at **$0.68 per share** expired on May 5, 2025, resulting in the purchase of **2,144,116 shares** for approximately **$1.46 million**[114](index=114&type=chunk) [12. SHARE-BASED INCENTIVE PLAN](index=27&type=section&id=12.%20SHARE-BASED%20INCENTIVE%20PLAN) This note describes the company's incentive award plan, including available shares for issuance, outstanding restricted shares, and compensation expense - The 2017 Incentive Award Plan was amended to increase available shares for issuance to **3.5 million** and includes an evergreen provision to automatically increase shares to **15%** of outstanding common stock semi-annually[118](index=118&type=chunk) - As of March 31, 2025, **1,319,715 non-vested restricted shares** were outstanding, with approximately **63,797 shares** available for grant[119](index=119&type=chunk) - Share-based compensation expense decreased from **$0.5 million** in Q1 2024 to **$0.2 million** in Q1 2025[119](index=119&type=chunk) [13. SEGMENTS](index=27&type=section&id=13.%20SEGMENTS) This note presents financial information for the company's reportable segments: Office/Industrial, Model Home, and Retail Properties, evaluated by Net Operating Income - The company operates in three reportable segments: Office/Industrial Properties, Model Home Properties, and Retail Properties, with performance evaluated based on Net Operating Income (NOI)[120](index=120&type=chunk)[121](index=121&type=chunk) Segment Performance (Q1 2025, in USD) | Segment (Q1 2025) | Total Revenues | Rental Operating Costs | Net Operating Income (NOI) | | :------------------ | :------------- | :--------------------- | :------------------------- | | Retail | $263,278 | $100,568 | $162,710 | | Office/Industrial | $2,916,392 | $1,618,365 | $1,298,027 | | Model Homes | $913,767 | $48,157 | $865,610 | | Corporate and Other | $31,747 | $(154,448) | $186,195 | | **Total** | **$4,125,184** | **$1,612,642** | **$2,512,542** | Segment Performance (Q1 2024, in USD) | Segment (Q1 2024) | Total Revenues | Rental Operating Costs | Net Operating Income (NOI) | | :------------------ | :------------- | :--------------------- | :------------------------- | | Retail | $553,389 | $139,954 | $413,435 | | Office/Industrial | $2,961,520 | $1,545,563 | $1,415,957 | | Model Homes | $1,268,951 | $41,230 | $1,227,721 | | Corporate and Other | $6,201 | $(163,170) | $169,371 | | **Total** | **$4,790,061** | **$1,563,577** | **$3,226,484** | - Model Home segment's Adjusted NOI includes gain/loss on sale of real estate and impairments, reflecting its business model[122](index=122&type=chunk) [14. INCOME TAX PROVISION](index=31&type=section&id=14.%20INCOME%20TAX%20PROVISION) This note explains the company's income tax provision, primarily related to its taxable REIT subsidiaries, and its REIT tax status - The company recorded a current income tax provision of **$25,409** in Q1 2025, compared to **$79,565** in Q1 2024, related to its taxable REIT subsidiaries (TRS)[133](index=133&type=chunk) - As a REIT, the company is generally required to distribute at least **90%** of its REIT taxable income and is not subject to corporate-level income tax on distributed earnings[132](index=132&type=chunk) [15. RELATED PARTY](index=31&type=section&id=15.%20RELATED%20PARTY) This note discloses transactions with related parties, including rent billed to entities owned by the CEO and consulting payments to a former officer - Rent billed to related parties (Puppy Toes, Inc. and Centurion Counsel, Inc., owned by the CEO and his wife) totaled **$3,378** in Q1 2025, up from **$2,688** in Q1 2024[136](index=136&type=chunk) - Consulting payments to former officer and director Larry Dubose (father-in-law of the President of Model Home Division) decreased significantly from **$131,250** in Q1 2024 to **$12,500** in Q1 2025[139](index=139&type=chunk) [16. SUBSEQUENT EVENTS](index=32&type=section&id=16.%20SUBSEQUENT%20EVENTS) This note reports significant events occurring after the balance sheet date, including dividend declarations, property transactions, and a common stock tender offer - Dividends for Series D Preferred Stock were declared for April, May, and June 2025 at **$0.19531 per share per month**[142](index=142&type=chunk) - In April 2025, the company acquired **five Model Home Properties** for **$3.3 million** and sold **three model homes** for approximately **$1.5 million**[143](index=143&type=chunk) - A fixed-price self-tender offer for Series A common stock, which expired on May 5, 2025, resulted in the purchase of **2,144,116 shares** for approximately **$1.46 million**[144](index=144&type=chunk) [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) This section provides management's perspective on the company's financial performance, liquidity, and capital resources for the three months ended March 31, 2025, compared to the same period in 2024. It highlights key revenue and expense drivers, real estate transactions, and future financial outlook, emphasizing the company's strategy as a diversified REIT [Forward-Looking Statements](index=33&type=section&id=Forward-Looking%20Statements) This section cautions readers about inherent risks and uncertainties associated with forward-looking statements within the report - The report contains forward-looking statements subject to risks and uncertainties, including those related to real estate investments, competition, economic conditions, financing, and REIT qualification[146](index=146&type=chunk) [OVERVIEW](index=33&type=section&id=OVERVIEW) This section provides a general description of Presidio Property Trust, Inc. as a diversified REIT, its investment strategy, and recent corporate governance initiatives - Presidio Property Trust, Inc. is an internally managed, diversified REIT with holdings in office, industrial, retail, and triple-net leased model home properties across multiple states[147](index=147&type=chunk)[148](index=148&type=chunk) - The company acquires stabilized properties or those expected to stabilize within two to three years, with a focus on diversifying its portfolio to mitigate risks[148](index=148&type=chunk)[150](index=150&type=chunk) - A Strategic Planning and Cyber Committee was established in June 2024 to oversee business strategy and cybersecurity risks[151](index=151&type=chunk) [SIGNIFICANT TRANSACTIONS IN 2025 AND 2024](index=34&type=section&id=SIGNIFICANT%20TRANSACTIONS%20IN%202025%20AND%202024) This section summarizes the company's key real estate acquisitions and dispositions during the first quarters of 2025 and 2024 - Q1 2025 Acquisitions: **12 model homes** for approximately **$4.3 million**[154](index=154&type=chunk) - Q1 2024 Acquisitions: **5 model homes** for approximately **$2.2 million**[155](index=155&type=chunk) - Q1 2025 Dispositions: Sold two commercial properties for **$17.0 million** (net gain **$4.2 million**) and **6 model homes** for **$2.8 million** (net gain **$0.2 million**)[161](index=161&type=chunk) - Q1 2024 Dispositions: Sold **27 model homes** for **$12.6 million** (gain **$2.0 million**)[156](index=156&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=35&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section confirms that no material changes have occurred in the company's critical accounting policies since its last annual report - No material changes to critical accounting policies were reported since the 2024 Annual Report[157](index=157&type=chunk) [MANAGEMENT EVALUATION OF RESULTS OF OPERATIONS](index=35&type=section&id=MANAGEMENT%20EVALUATION%20OF%20RESULTS%20OF%20OPERATIONS) This section outlines management's approach to assessing operational performance, focusing on cash flow generation and property value enhancement - Management assesses operating results based on cash flow generation, giving less emphasis to non-cash charges like depreciation and impairment[158](index=158&type=chunk) - Focus is on increasing and enhancing property value, improving underperforming assets through re-leasing, and reinvesting proceeds from property sales into new acquisitions[159](index=159&type=chunk) [RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024](index=35&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20THREE%20MONTHS%20ENDED%20MARCH%2031%2C%202025%20AND%202024) This section provides a comparative analysis of the company's financial results for the first quarters of 2025 and 2024 [Revenues](index=35&type=section&id=Revenues) This section analyzes the changes in total revenues for the three months ended March 31, 2025, compared to the prior-year period Total Revenues (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------- | :-------------------------------- | :-------------------------------- | | Total revenues | $4.1 million | $4.8 million | - Total revenues decreased by approximately **$0.7 million** (**14.6%**) year-over-year, primarily due to decreased model home rental income and transaction fees, and the sale of two commercial properties[160](index=160&type=chunk) [Rental Operating Costs](index=36&type=section&id=Rental%20Operating%20Costs) This section examines the company's rental operating costs and their proportion to total revenue for the periods presented Rental Operating Costs (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Rental operating costs | $1.6 million | $1.6 million | | % of total revenue | 39.1% | 32.6% | - Rental operating costs remained stable year-over-year, but increased as a percentage of total revenue from **32.6%** to **39.1%** due to lower overall revenue[162](index=162&type=chunk) [General and Administrative Expenses](index=36&type=section&id=General%20and%20Administrative%20Expenses) This section discusses the year-over-year changes in general and administrative expenses and their impact on overall financial performance General and Administrative Expenses (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | G&A expenses | $1.7 million | $2.1 million | | % of total revenue | 40.3% | 43.5% | - G&A expenses decreased by approximately **$0.4 million** (**19%**) year-over-year, primarily due to reduced consulting fees and lower stock compensation, leading to a decrease in G&A as a percentage of total revenue[163](index=163&type=chunk) [Depreciation and Amortization](index=36&type=section&id=Depreciation%20and%20Amortization) This section details the depreciation and amortization expenses recognized for the three months ended March 31, 2025, and 2024 Depreciation and Amortization (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Depreciation and amortization | $1.2 million | $1.4 million | - Depreciation and amortization expense decreased by approximately **$0.2 million** (**14.3%**) year-over-year[164](index=164&type=chunk) [Asset Impairments](index=36&type=section&id=Asset%20Impairments) This section reports the non-cash impairment charges recognized on model homes during the first quarters of 2025 and 2024 Asset Impairments (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------- | :-------------------------------- | :-------------------------------- | | Impairment charges | $26,943 | $0.1 million | - Non-cash impairment charges on model homes decreased from **$0.1 million** in Q1 2024 to **$26,943** in Q1 2025[165](index=165&type=chunk) [Interest Expense - mortgage notes](index=36&type=section&id=Interest%20Expense%20-%20mortgage%20notes) This section analyzes the interest expense on mortgage notes, considering changes in principal balances and weighted average interest rates Interest Expense - Mortgage Notes (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Interest expense - mortgage notes | $1.5 million | $1.5 million | | Weighted average interest rate | 5.83% | 5.23% | | Mortgage notes payable (period end) | $94.4 million | $102.3 million | - Interest expense remained stable despite a decrease in mortgage notes payable, as the weighted average interest rate increased from **5.23%** to **5.83%** year-over-year[166](index=166&type=chunk) [Gain on Sale of Real Estate Assets, net](index=37&type=section&id=Gain%20on%20Sale%20of%20Real%20Estate%20Assets%2C%20net) This section discusses the factors influencing the net gain or loss from the sale of real estate assets - The gain on sale of real estate assets is dependent on the mix of properties sold and market conditions[168](index=168&type=chunk) [Income allocated to non-controlling interests](index=37&type=section&id=Income%20allocated%20to%20non-controlling%20interests) This section explains the allocation of income or loss to non-controlling interests, particularly related to model home sales Income Allocated to Non-Controlling Interests (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Income allocated to non-controlling interests | $0.1 million | $1.5 million | - Income allocated to non-controlling interests significantly decreased from **$1.5 million** in Q1 2024 to **$0.1 million** in Q1 2025, directly related to the gain on sales of model homes held by affiliated limited partnerships[169](index=169&type=chunk) [Loss on Conduit remeasurement](index=37&type=section&id=Loss%20on%20Conduit%20remeasurement) This section details the net loss recognized from fair value adjustments of marketable securities in Conduit Pharmaceuticals Loss on Conduit Remeasurement (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net loss in Conduit Pharmaceuticals marketable securities | $0.2 million | $3.9 million | - The loss from Conduit Pharmaceuticals marketable securities remeasurement decreased substantially from **$3.9 million** in Q1 2024 to **$0.2 million** in Q1 2025[170](index=170&type=chunk) [Geographic Diversification Tables](index=37&type=section&id=Geographic%20Diversification%20Tables) This section presents tables illustrating the geographic distribution of the company's commercial and model home properties by state Commercial Properties by State (March 31, 2025) | State | No. of Properties | Approximate Aggregate Square Feet | % of Square Feet | Current Base Annual Rent (USD) | % of Aggregate Annual Rent | | :---------- | :---------------- | :-------------------------------- | :--------------- | :----------------------- | :------------------------- | | California | 1 | 57,807 | 7.5% | $1,546,117 | 14.6% | | Colorado | 3 | 269,503 | 35.1% | $4,347,958 | 41.1% | | Maryland | 1 | 31,752 | 4.1% | $739,050 | 7.0% | | North Dakota | 4 | 399,113 | 51.8% | $3,585,035 | 34.0% | | Texas | 1 | 10,500 | 1.4% | $349,546 | 3.3% | | **Total** | **10** | **768,675** | **99.9%** | **$10,567,706** | **100.0%** | Model Home Properties by State (March 31, 2025) | State | No. of Properties | Approximate Aggregate Square Feet | % of Square Feet | Current Base Annual Rent (USD) | % 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%** | [LIQUIDITY AND CAPITAL RESOURCES](index=38&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's ability to meet its short-term and long-term financial obligations and fund its operations [Overview (Liquidity)](index=38&type=section&id=Overview%20%28Liquidity%29) This section outlines the company's anticipated sources of liquidity and its assessment of funding operational needs for the next twelve months - Anticipated liquidity sources include existing cash, cash flows from operations, refinancing, real estate sales, new borrowings, and equity/debt securities sales[172](index=172&type=chunk) - Management believes current working capital and refinancing capabilities will fund operations for at least the next twelve months[174](index=174&type=chunk) - 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[176](index=176&type=chunk) [Cash Equivalents and Restricted Cash](index=40&type=section&id=Cash%20Equivalents%20and%20Restricted%20Cash) This section provides details on the company's cash and restricted cash balances and their intended uses Cash Equivalents and Restricted Cash (in USD) | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :--------------- | :---------------- | | Cash equivalents and restricted cash | $12.0 million | $8.0 million | | Restricted cash | $4.0 million | $5.0 million | - Approximately **$1.5 million** of cash was used in the Tender Offer that closed on May 5, 2025, and **$1.5 million** to **$2.0 million** is intended for capital expenditures[181](index=181&type=chunk) [Secured Debt](index=40&type=section&id=Secured%20Debt) This section describes the company's secured debt, including mortgage notes on commercial and model home properties, and upcoming loan maturities - As of March 31, 2025, commercial properties had **$67.4 million** in fixed-rate mortgage notes (weighted-average interest rate **5.38%**), and model homes had **$27.1 million** (weighted-average interest rate **6.97%**)[182](index=182&type=chunk)[183](index=183&type=chunk) - Three commercial property loans totaling approximately **$28.2 million** will mature within the next 12 months[182](index=182&type=chunk) - The Dakota Center loan, which matured on July 6, 2024, is non-recourse, and the property is held for sale to settle the loan balance[182](index=182&type=chunk) [Cash Flow for the three months ended March 31, 2025, and March 31, 2024](index=40&type=section&id=Cash%20Flow%20for%20the%20three%20months%20ended%20March%2031%2C%202025%2C%20and%20March%2031%2C%202024) This section provides a comparative analysis of cash flows from operating, investing, and financing activities [Operating Activities](index=40&type=section&id=Operating%20Activities) This section details the net cash used in operating activities, highlighting the impact of net income and non-cash adjustments Net Cash Used in Operating Activities (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(0.1) million | $(0.9) million | - Net cash used in operating activities significantly improved from **$(0.9) million** in Q1 2024 to **$(0.1) million** in Q1 2025, driven by changes in net income and non-cash adjustments[184](index=184&type=chunk) [Investing Activities](index=40&type=section&id=Investing%20Activities) This section explains the net cash provided by investing activities, primarily driven by real estate sales and acquisitions Net Cash Provided by Investing Activities (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by investing activities | $13.6 million | $9.2 million | - Net cash provided by investing activities increased to **$13.6 million** in Q1 2025, up from **$9.2 million** in Q1 2024, primarily due to proceeds from commercial property sales[185](index=185&type=chunk) - The company projects up to **$1.8 million** in capital improvements, tenant improvements, and leasing costs for the next 12 months[186](index=186&type=chunk) [Financing Activities](index=41&type=section&id=Financing%20Activities) This section outlines the net cash used in financing activities, including mortgage repayments and stock repurchases Net Cash Used in Financing Activities (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in financing activities | $(9.5) million | $(7.7) million | - Net cash used in financing activities increased to **$9.5 million** in Q1 2025, from **$7.7 million** in Q1 2024, driven by mortgage note repayments and Series D Preferred Stock repurchases[187](index=187&type=chunk)[191](index=191&type=chunk) [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses the company's outstanding common stock warrants and their potential gross proceeds upon exercise - The company has outstanding Common Stock Warrants (**2,000,000 shares** at **$5.50 exercise price**), Placement Agent Warrants (**80,000 shares** at **$6.25 exercise price**), and Series A Warrants (**14,450,069 shares** at **$7.00 exercise price**)[189](index=189&type=chunk)[190](index=190&type=chunk)[193](index=193&type=chunk) - Potential gross proceeds from the exercise of all outstanding warrants could be approximately **$10.0 million** for Common Stock Warrants, **$0.5 million** for Placement Agent Warrants, and **$101.2 million** for Series A Warrants[189](index=189&type=chunk)[190](index=190&type=chunk)[193](index=193&type=chunk) [Inflation](index=42&type=section&id=Inflation) This section discusses the potential impact of inflation on the company's rental income and property expenses - Leases generally provide for limited rent increases, which may not keep pace with inflation, but net lease agreements reduce exposure to rising property expenses as tenants are responsible for these costs[194](index=194&type=chunk)[195](index=195&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 specific quantitative and qualitative disclosures about market risk in this report - The company is exempt from providing detailed market risk disclosures 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, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of March 31, 2025. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2025[198](index=198&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025[199](index=199&type=chunk) [PART II — OTHER INFORMATION](index=43&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, and other general information [ITEM 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, nor is it aware of any threatened material litigation - No material legal proceedings are currently active or threatened against the company or its properties[200](index=200&type=chunk) [ITEM 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company has not identified any new material risk factors that would require disclosure in this quarterly report - No new material risk factors were identified for this reporting period[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 programs for both Series A Common Stock and Series D Preferred Stock, including the amounts authorized and shares repurchased during the quarter [Stock Repurchase Program](index=43&type=section&id=Stock%20Repurchase%20Program) This section details the Board-authorized stock repurchase program for Series A Common Stock and Series D Preferred Stock - The Board of Directors authorized a stock repurchase program in December 2024 for up to **$6.0 million** of Series A Common Stock and up to **$4.0 million** of Series D Preferred Stock, expiring in December 2025[202](index=202&type=chunk) - During the three months ended March 31, 2025, no shares of Series A Common Stock were repurchased[202](index=202&type=chunk) - During the three months ended March 31, 2025, **12,844 shares** of Series D Preferred Stock were repurchased at an average price of approximately **$15.18 per share**, totaling **$194,971**[202](index=202&type=chunk) [Stock repurchases for Series A Common Stock](index=44&type=section&id=Stock%20repurchases%20for%20Series%20A%20Common%20Stock) This section provides a table summarizing repurchases of Series A Common Stock during Q1 2025 and remaining authorization Stock Repurchases for Series A Common Stock (in USD) | Month | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :------------ | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :--------------------------------------------------------------------------------- | | January 2025 | — | $— | — | $5,956,977 | | February 2025 | — | $— | — | $5,956,977 | | March 2025 | — | $— | — | $5,956,977 | | **Total** | **—** | **$—** | **—** | **$5,956,977** | - No Series A Common Stock shares were repurchased during Q1 2025, leaving approximately **$5.96 million** available under the repurchase program[204](index=204&type=chunk) [Stock repurchases for Series D Preferred Stock](index=44&type=section&id=Stock%20repurchases%20for%20Series%20D%20Preferred%20Stock) This section provides a table summarizing repurchases of Series D Preferred Stock during Q1 2025 and remaining authorization Stock Repurchases for Series D Preferred Stock (in USD) | Month | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :------------ | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :--------------------------------------------------------------------------------- | | January 2025 | 2,854 | $14.36 | 2,854 | $3,918,112 | | February 2025 | 5,233 | $15.52 | 5,233 | $3,836,896 | | March 2025 | 4,757 | $15.30 | 4,757 | $3,764,119 | | **Total** | **12,844** | **$15.18** | **12,844** | **$3,764,119** | - A total of **12,844 Series D Preferred Stock shares** were repurchased in Q1 2025 at an average price of **$15.18 per share**, with approximately **$3.76 million** remaining under the program[205](index=205&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company received a notice of maturity date default on March 13, 2025, for a $11.1 million loan secured by the Dakota Center property, resulting in a default interest rate and additional expenses - A maturity date default notice was received on March 13, 2025, for an **$11.1 million loan** secured by the Dakota Center, with an outstanding default amount of approximately **$9.1 million** and **$0.4 million** in arrearage[206](index=206&type=chunk)[207](index=207&type=chunk) - The default triggers a **5% increase** above the original interest rate and requires payment of lender's expenses[207](index=207&type=chunk) [ITEM 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety - No mine safety disclosures are applicable to the company[208](index=208&type=chunk) [ITEM 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) 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 - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during Q1 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, including certifications from the CEO and CFO, XBRL instance documents, and taxonomy extensions - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1) and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[210](index=210&type=chunk)[211](index=211&type=chunk) [SIGNATURES](index=46&type=section&id=SIGNATURES) This section includes the official signatures of the company's Chief Executive Officer and Chief Financial Officer, certifying the report's accuracy - The report is signed by Jack K. Heilbron, Chief Executive Officer, and Ed Bentzen, Chief Financial Officer, on May 14, 2025[213](index=213&type=chunk)

[Supplemental Financial Information](index=1&type=section&id=1.%20Supplemental%20Financial%20Information) This section provides context on forward-looking statements, emphasizing that actual results may differ due to various risks and uncertainties detailed in SEC filings [Forward-Looking Statements](index=2&type=section&id=1.1%20Forward-Looking%20Statements) This section outlines the nature of forward-looking statements, cautioning that actual results may materially differ due to risks and uncertainties detailed in SEC filings - The presentation contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially[3](index=3&type=chunk)[4](index=4&type=chunk) - Factors influencing actual results include those in the Quarterly Report on Form 10-Q and Annual Report on Form 10-K, as well as global, regional, or local political, economic, business, competitive, market, and regulatory factors[3](index=3&type=chunk)[4](index=4&type=chunk) - The company cautions against undue reliance on forward-looking statements and undertakes no obligation to publicly update them, except as required by applicable securities laws[4](index=4&type=chunk) [Company Overview](index=3&type=section&id=2.%20Company%20Overview) Presidio Property Trust, Inc. is an internally managed real estate company with a diverse portfolio of commercial properties and model homes, holding a book value of $127.6 million [Corporate Information](index=3&type=section&id=2.1%20Corporate%20Information) Presidio Property Trust, Inc., founded in 1999 and headquartered in San Diego, CA, is an internally managed real estate company focusing on commercial properties in key US geographies Corporate Details | Category | Detail | | :--------- | :------- | | Headquarters | San Diego, CA | | Founded | 1999 | | Key Geographies | CA, CO, MD, ND & TX | | Employees | 15 | - Presidio Property Trust, Inc. was founded in **1999** as NetREIT and is an internally managed real estate company[10](index=10&type=chunk) [Portfolio Summary](index=3&type=section&id=2.2%20Portfolio%20Summary) The company's real estate portfolio comprises 12 commercial properties and 78 model homes, totaling over 1 million square feet across various property types Portfolio Composition | Property Type | Number of Properties | Square Footage | | :-------------- | :------------------- | :------------- | | Office | 8 | 608,076 sqft. | | Retail | 3 | 65,242 sqft. | | Industrial | 1 | 150,099 sqft. | | Model Homes | 78 | 236,955 sqft | - The commercial portfolio consists of **12** properties with a **book value** of approximately **$90.2 million**[10](index=10&type=chunk) - The company also generates fees and rental income from affiliated entities managing/owning a portfolio of model homes[10](index=10&type=chunk) [Portfolio Value & Debt](index=3&type=section&id=2.3%20Portfolio%20Value%20%26%20Debt) As of December 31, 2024, the company's portfolio had a book value of $127.6 million with existing secured debt of $102.8 million Portfolio Valuation and Debt Structure | Metric | Value | | :------------------ | :------------ | | Book Value | $127.6 million | | Existing Secured Debt | $102.8 million | [Commercial Portfolio Details](index=4&type=section&id=3.%20Commercial%20Portfolio%20Details) This section details the company's commercial real estate holdings, including office, industrial, and retail properties, along with specific notes on recent property-level events and transactions [Office/Industrial Properties](index=4&type=section&id=3.1%20Office%2FIndustrial%20Properties) The office/industrial portfolio consists of 9 properties totaling 758,175 sqft with 81.0% average occupancy and $60.619 million in total mortgages Office/Industrial Property Overview | Property Location | Sq. Ft. | Occupancy | Ownership | Mortgage On Property ($000's) | | :-------------------------- | :-------- | :-------- | :-------- | :---------------------------- | | Genesis Plaza, San Diego, CA | 57,807 | 95.6% | 92.0% | 5,937 | | Dakota Center, Fargo, ND | 119,554 | 46.1% | 100.0% | 9,197 | | Grand Pacific Center, Bismarck, ND | 94,943 | 88.6% | 100.0% | 5,471 | | Arapahoe Center, Colorado Springs, CO | 79,023 | 100.0% | 100.0% | 7,426 | | West Fargo Industrial, West Fargo, ND | 150,099 | 97.2% | 100.0% | 3,923 | | 300 N.P., West Fargo, ND | 34,517 | 66.4% | 100.0% | - | | One Park Centre, Westminster CO | 69,174 | 85.7% | 100.0% | 6,044 | | Shea Center II, Highlands Ranch, CO | 121,306 | 64.4% | 100.0% | 16,951 | | Baltimore, Baltimore, MD | 31,752 | 100.0% | 100.0% | 5,670 | | **Total Office/Industrial** | **758,175** | **81.0%** | | **60,619** | [Retail Properties](index=4&type=section&id=3.2%20Retail%20Properties) The retail portfolio comprises 3 properties totaling 65,242 sqft with 86.2% average occupancy and $13.032 million in total mortgages Retail Property Overview | Property Location | Sq. Ft. | Occupancy | Ownership | Mortgage On Property ($000's) | | :-------------------------- | :-------- | :-------- | :-------- | :---------------------------- | | Union Town Center, Colorado Springs, CO | 44,042 | 100.0% | 100.0% | 7,870 | | Research Parkway, Colorado Springs, CO | 10,700 | 88.8% | 100.0% | 1,589 | | Mandolin, Houston, TX | 10,500 | 100.0% | 61.3% | 3,573 | | **Total Retail** | **65,242** | **86.2%** | | **13,032** | [Property Specific Notes](index=4&type=section&id=3.3%20Property%20Specific%20Notes) Key commercial properties experienced significant events in 2023-2024, including ownership changes, sales agreements, major lease signings, and active re-leasing efforts - Genesis Plaza: Completed a minority ownership conversion option in July **2024**, issuing **78,215** shares of SQFT Series A Common Stock for a **36.4%** ownership in NetREIT Genesis II[12](index=12&type=chunk) - Dakota Center: Non-recourse loan matured in July **2024**; management agreed to sell the property to settle the loan balance, resulting in a **$0.7 million** impairment charge as of September **30, 2024**. The property was held for sale as of December **31, 2024**[12](index=12&type=chunk) - Grand Pacific Center: Removed from held-for-sale after signing a **122-month** lease with KLJ Engineering for **33,296 sqft** in December **2022**, with rent commencing February **28, 2024**[12](index=12&type=chunk) - Union Town Center and Research Parkway: Listed for sale as of September **30, 2024**, and sold in February **2025** for a combined **$16.95 million**, resulting in a **$4.3 million** gain[12](index=12&type=chunk) - Shea Center II: Largest tenant, Halliburton, did not renew its lease expiring December **31, 2022**. Management is working to fill the **45,535 sqft** space, with approximately **54%** leased as of February **2025**[12](index=12&type=chunk) [Model Homes Portfolio](index=5&type=section&id=4.%20Model%20Homes%20Portfolio) The model homes portfolio consists of 78 properties across Arizona, Florida, and Texas, totaling 236,955 square feet with an aggregate annual rent of $3.37 million Model Homes Portfolio Details | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | Approximate % 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=5.%20Consolidated%20Financial%20Statements) This section presents the company's balance sheets, statements of operations, and cash flows, highlighting significant changes in assets, liabilities, equity, and profitability for 2024 [Consolidated Balance Sheets](index=6&type=section&id=5.1%20Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets decreased to $142.57 million and total equity declined to $34.95 million, primarily due to reduced real estate assets and marketable securities Consolidated Balance Sheet Summary | Metric | Dec 31, 2024 ($) | Dec 31, 2023 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :--------------- | :--------------- | :--------- | :--------- | | **ASSETS** | | | | | | Real estate assets and lease intangibles held for investment, net | 105,410,758 | 138,695,791 | (33,285,033) | -24.0% | | Real estate assets held for sale, net | 22,185,742 | 5,459,993 | 16,725,749 | 306.3% | | Real estate assets, net | 127,596,500 | 144,155,784 | (16,559,284) | -11.5% | | Cash, cash equivalents and restricted cash | 8,036,496 | 6,510,428 | 1,526,068 | 23.4% | | Investment in Conduit Pharmaceuticals marketable securities | 206,177 | 18,318,521 | (18,112,344) | -98.9% | | **TOTAL ASSETS** | **142,569,650** | **175,962,638** | **(33,392,988)** | **-19.0%** | | **LIABILITIES** | | | | | | Mortgage notes payable, total net | 102,094,094 | 107,713,273 | (5,619,179) | -5.2% | | Accounts payable and accrued liabilities | 3,290,170 | 4,770,845 | (1,480,675) | -31.0% | | **Total liabilities** | **107,624,495** | **114,640,568** | **(7,016,073)** | **-6.1%** | | **EQUITY** | | | | | | Total stockholders' equity before noncontrolling interest | 26,535,146 | 50,954,183 | (24,419,037) | -47.9% | | Noncontrolling interest | 8,410,009 | 10,367,887 | (1,957,878) | -18.9% | | **Total equity** | **34,945,155** | **61,322,070** | **(26,376,915)** | **-43.0%** | [Consolidated Statements of Operations](index=7&type=section&id=5.2%20Consolidated%20Statements%20of%20Operations) For 2024, the company reported a net loss of $23.10 million, a significant decline from 2023's net income, driven by losses in marketable securities and the absence of a prior year SPAC gain Consolidated Statement of Operations Summary | Metric | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :------------------------------------------------------- | :--------- | :--------- | :--------- | :--------- | | **Revenues:** | | | | | | Total revenue | 18,925,275 | 17,635,614 | 1,289,661 | 7.3% | | **Costs and expenses:** | | | | | | Total costs and expenses | 21,267,581 | 21,426,186 | (158,605) | -0.7% | | **Other income (expense):** | | | | | | Interest expense - mortgage notes | (6,050,196) | (5,004,889) | (1,045,307) | 20.9% | | Net loss in Conduit Pharmaceuticals marketable securities | (17,925,723) | (23,359,774) | 5,434,051 | -23.3% | | Gain on deconsolidation of SPAC | — | 40,321,483 | (40,321,483) | -100.0% | | **Net (loss) income** | **(23,103,864)** | **13,177,526** | **(36,281,390)** | **-275.3%** | | Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders | (27,865,225) | 8,027,600 | (35,892,825) | -447.1% | | Net (loss) income per share attributable to Presidio Property Trust, Inc. common stockholders: Basic & Diluted | (2.25) | 0.68 | (2.93) | -430.9% | - Rental income increased by **$1.13 million** (**6.5%**) year-over-year, reaching **$18.52 million** in **2024**[17](index=17&type=chunk) - Impairment of goodwill and real estate assets decreased from **$3.25 million** in **2023** to **$1.97 million** in **2024**[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=5.3%20Consolidated%20Statements%20of%20Cash%20Flows) In 2024, the company experienced a net cash outflow from operating activities of $0.73 million, while investing activities generated $12.87 million and financing activities resulted in a $10.61 million outflow Consolidated Statement of Cash Flows Summary | Cash Flow Category | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :------------------------------------------ | :--------- | :--------- | :--------- | :--------- | | Net cash (used in) provided by operating activities | (728,060) | 1,448,573 | (2,176,633) | -150.3% | | Net cash provided by investing activities | 12,866,819 | 120,598,553 | (107,731,734) | -89.3% | | Net cash (used in) financing activities | (10,612,691) | (132,053,423) | 121,440,732 | -91.9% | | Net (decrease) increase in cash equivalents and restricted cash | 1,526,068 | (10,006,297) | 11,532,365 | -115.2% | | Cash, cash equivalents and restricted cash - end of period | 8,036,496 | 6,510,428 | 1,526,068 | 23.4% | - Proceeds from sales of real estate, net, increased significantly from **$10.70 million** in **2023** to **$24.77 million** in **2024**[19](index=19&type=chunk) - Repayment of mortgage notes payable increased from **$10.09 million** in **2023** to **$27.90 million** in **2024**[19](index=19&type=chunk) [Non-GAAP Reconciliations](index=10&type=section&id=6.%20Non-GAAP%20Reconciliations) This section provides reconciliations for non-GAAP financial measures, including EBITDAre, FFO, and Core FFO, to GAAP net income, offering alternative perspectives on operational performance [EBITDAre Reconciliation](index=10&type=section&id=6.1%20EBITDAre%20Reconciliation) Presidio Property Trust, Inc. reported a positive EBITDAre of $0.23 million for 2024, a significant improvement from a negative $0.25 million in 2023, despite a higher net loss attributable to common stockholders EBITDAre Reconciliation Table | Metric | 2024 ($) | 2023 ($) | | :------------------------------------------------------- | :--------- | :--------- | | Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders | (27,865,225) | 8,027,600 | | Interest Expense | 6,050,195 | 5,004,889 | | Depreciation and Amortization | 5,510,877 | 5,420,765 | | Asset Impairment | 1,969,311 | 3,247,097 | | Net loss (gain) on sale of real estate | (3,426,572) | (3,240,200) | | Net change in Conduit marketable securities | 17,926,283 | 21,945,354 | | Gain on deconsolidation of SPAC | — | (40,321,483) | | Income Taxes | 60,855 | (335,780) | | **EBITDAre** | **225,724** | **(251,757)** | [FFO and Core FFO Reconciliation](index=11&type=section&id=6.2%20FFO%20and%20Core%20FFO%20Reconciliation) The company reported an FFO loss of $3.36 million and a Core FFO loss of $1.98 million in 2024, both worsening from 2023, resulting in a Core FFO per share of $(0.160) FFO and Core FFO Reconciliation Table | Metric | 2024 ($) | 2023 ($) | | :------------------------------------------------------- | :--------- | :--------- | | Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders | (27,865,225) | 8,027,600 | | Income attributable to noncontrolling interests | 2,524,665 | 3,031,081 | | Depreciation and amortization | 5,515,518 | 5,425,739 | | Impairment of real estate assets | 1,969,311 | 3,247,097 | | Loss on Conduit marketable securities | 17,926,283 | 21,945,354 | | Gain on deconsolidation of SPAC | - | (40,321,483) | | Loss (Gain) on sale of real estate assets | (3,426,572) | (3,240,200) | | **FFO** | **(3,360,660)** | **(1,889,786)** | | Stock Based Compensation | 1,379,080 | 989,515 | | **Core FFO** | **(1,981,580)** | **(900,271)** | | Weighted average number of common shares outstanding - basic and diluted | 12,386,594 | 11,847,814 | | Core FFO / Wgt Avg Share | (0.160) | (0.076) | | Quarterly Dividends / Share | — | 0.091 | [Segment Data](index=12&type=section&id=7.%20Segment%20Data) This section provides a detailed breakdown of the company's financial performance and asset allocation across its Retail, Office/Industrial, and Model Homes segments [Segment Activity and NOI](index=12&type=section&id=7.1%20Segment%20Activity%20and%20NOI) For 2024, the Model Homes segment generated the highest Adjusted NOI at $7.28 million, contributing to a total Adjusted NOI increase to $15.69 million from $14.48 million in 2023 Segment Activity and Net Operating Income | Metric | Retail 2024 ($) | Office/Industrial 2024 ($) | Model Homes 2024 ($) | Corporate and Other 2024 ($) | Total 2024 ($) | | :---------------------- | :-------------- | :------------------------- | :------------------- | :--------------------------- | :------------- | | Total revenues | 2,120,663 | 12,338,552 | 4,436,253 | 29,807 | 18,925,275 | | Rental operating costs | 608,667 | 6,136,564 | 171,621 | (660,775) | 6,256,077 | | Net Operating Income (NOI) | 1,511,996 | 6,201,988 | 4,264,632 | 690,582 | 12,669,198 | | Gain on Sale - Model Homes | — | — | 3,426,572 | — | 3,426,572 | | Impairment of Model Homes | — | — | (406,374) | — | (406,374) | | **Adjusted NOI** | **1,511,996** | **6,201,988** | **7,284,830** | **690,582** | **15,689,396** | | | | | | | | | Metric | Retail 2023 ($) | Office/Industrial 2023 ($) | Model Homes 2023 ($) | Corporate and Other 2023 ($) | Total 2023 ($) | | :---------------------- | :-------------- | :------------------------- | :------------------- | :--------------------------- | :------------- | | Total revenues | 1,884,330 | 11,574,955 | 4,132,129 | 44,200 | 17,635,614 | | Rental operating costs | 537,389 | 5,901,042 | 156,493 | (632,006) | 5,962,918 | | Net Operating Income (NOI) | 1,346,941 | 5,673,913 | 3,975,636 | 676,206 | 11,672,696 | | Gain on Sale - Model Home | — | — | 3,240,200 | — | 3,240,200 | | Impairment of Model Homes | — | — | (431,984) | — | (431,984) | | **Adjusted NOI** | **1,346,941** | **5,673,913** | **6,783,852** | **676,206** | **14,480,912** | [Assets by Reportable Segment](index=13&type=section&id=7.2%20Assets%20by%20Reportable%20Segment) As of December 31, 2024, the Office/Industrial segment held the largest assets at $76.29 million, contributing to a total reportable segment asset decrease to $131.13 million Assets by Reportable Segment | Segment | Dec 31, 2024 ($) | Dec 31, 2023 ($) | Change ($) | Change (%) | | :-------------------------- | :--------------- | :--------------- | :--------- | :--------- | | Office/Industrial Properties: Total assets | 76,292,662 | 78,140,372 | (1,847,710) | -2.4% | | Model Home Properties: Total assets | 38,166,964 | 51,456,292 | (13,289,328) | -25.8% | | Retail Properties: Total assets | 16,673,605 | 16,539,399 | 134,206 | 0.8% | | **Total assets for reportable segments** | **131,133,231** | **146,136,063** | **(15,002,832)** | **-10.3%** | | Corporate and other assets: Total Assets | 11,436,419 | 29,826,575 | (18,390,156) | -61.7% | | **Total Assets (Consolidated)** | **142,569,650** | **175,962,638** | **(33,392,988)** | **-19.0%** | [Definitions – Non-GAAP Measurements](index=14&type=section&id=8.%20Definitions%20%E2%80%93%20Non-GAAP%20Measurements) This section provides clear definitions for key non-GAAP financial measures, including EBITDAre, FFO, and Core FFO, explaining their calculation and purpose in financial reporting [EBITDAre Definition](index=14&type=section&id=8.1%20EBITDAre%20Definition) EBITDAre, as defined by NAREIT, represents earnings before interest, taxes, depreciation, and amortization, adjusted for gains or losses on asset disposal and impairment write-offs - **EBITDAre** is defined by NAREIT as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs[29](index=29&type=chunk) [Funds from Operations (FFO) Definition](index=14&type=section&id=8.2%20Funds%20from%20Operations%20%28FFO%29%20Definition) FFO is a non-GAAP measure that adjusts net income for property sales gains/losses, depreciation, amortization, and impairment charges, serving as a key metric for REIT performance - **FFO** 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 and amortization, and impairment charges on properties or non-consolidated REITs[30](index=30&type=chunk) - **FFO** is considered a supplement to **net income** because it excludes depreciation, amortization, and changes in property value, which have real economic effects[31](index=31&type=chunk) - The company believes **FFO** is the most accurate measure of activity and the basis for distributions to equity holders[30](index=30&type=chunk) [Core Funds from Operations (Core FFO) Definition](index=14&type=section&id=8.3%20Core%20Funds%20from%20Operations%20%28Core%20FFO%29%20Definition) Core FFO refines NAREIT's FFO by excluding specific non-core items like acquisition costs and stock-based compensation, aiming to provide a clearer view of ongoing operating performance - **Core FFO** is calculated by adjusting NAREIT's **FFO** for non-core items such as 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 amortization of stock-based compensation[32](index=32&type=chunk) - **Core FFO** is believed to provide a useful metric for comparing operations between reporting periods and assessing the sustainability of ongoing operating performance[33](index=33&type=chunk) - Other equity REITs may calculate **Core FFO** differently, so comparability is not guaranteed[33](index=33&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 001-34049 Presidio Property Trust, Inc. ...

[Cautionary Language Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20LANGUAGE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns readers that the report contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially - This section warns readers that the report contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially; it lists various factors, including inherent risks associated with real estate investments, significant competition, economic conditions, debt obligations, adverse changes in financing markets, and the ability to qualify as a REIT[11](index=11&type=chunk)[13](index=13&type=chunk) [Part I — Financial Information](index=6&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including the Balance Sheets, Statements of Operations, Statements of Changes in Equity, and Statements of Cash Flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial line items [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity as of September 30, 2024, and December 31, 2023 Consolidated Balance Sheet Highlights (September 30, 2024 vs. December 31, 2023) | Metric | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :--------------------------------------- | :----------------------- | :------------- | | **ASSETS** | | | | Real estate assets, net | $131,415,210 | $144,155,784 | | Investment in Conduit Pharmaceuticals marketable securities | $481,219 | $18,318,521 | | Total Assets | $145,845,230 | $175,962,638 | | **LIABILITIES** | | | | Mortgage notes payable, total net | $102,319,219 | $107,713,273 | | Total Liabilities | $107,748,693 | $114,640,568 | | **EQUITY** | | | | Total equity | $38,096,537 | $61,322,070 | | TOTAL LIABILITIES AND EQUITY | $145,845,230 | $175,962,638 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income (loss) for the three and nine months ended September 30, 2024, and 2023 Consolidated Statements of Operations Highlights (Three and Nine Months Ended Sep 30, 2024 vs. 2023) | Metric | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenue | $4,723,374 | $4,484,174 | $14,099,976 | $13,149,538 | | Total costs and expenses | $5,380,962 | $4,465,794 | $15,623,582 | $13,920,150 | | Net income (loss) | $(5,704,383) | $22,159,661 | $(20,820,853) | $21,346,450 | | Net income (loss) attributable to common stockholders | $(6,645,466) | $20,958,509 | $(24,800,532) | $17,595,632 | | Basic & Diluted EPS | $(0.53) | $1.77 | $(2.00) | $1.49 | [Consolidated Statements of Changes in Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines the changes in the company's equity components, including total stockholders' equity and noncontrolling interest, for the nine months ended September 30, 2024, and 2023 Consolidated Statements of Changes in Equity Highlights (Nine Months Ended Sep 30, 2024 vs. 2023) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :-------------------------------- | :----------- | :----------- | | Total Stockholders' Equity | $29,536,742 | $50,954,183 | | Noncontrolling Interest | $8,559,795 | $10,367,887 | | Total Equity | $38,096,537 | $61,322,070 | - Net loss for the nine months ended September 30, 2024, was **$(20,820,853)**, a significant decrease from net income of **$21,346,450** for the same period in 2023, leading to a substantial reduction in total equity[19](index=19&type=chunk) - The company issued **109,054 shares of Series D Preferred Stock**, net of issuance costs, for **$1,195,855** during the nine months ended September 30, 2024[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Provides a breakdown of cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2024, and 2023 Consolidated Statements of Cash Flows Highlights (Nine Months Ended Sep 30, 2024 vs. 2023) | Cash Flow Activity | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Net cash (used in) provided by operating activities | $(1,040,830) | $(356,973) | | Net cash provided by investing activities | $10,664,729 | $129,013,895 | | Net cash used in financing activities | $(8,934,879) | $(137,394,883) | | Net change in cash, cash equivalents and restricted cash | $689,020 | $(8,737,961) | | Cash, cash equivalents and restricted cash - end of period | $7,199,448 | $7,778,764 | - Investing activities saw a significant decrease in cash provided, from **$129.0 million in 2023** to **$10.7 million in 2024**, primarily due to the absence of SPAC redemptions in 2024[205](index=205&type=chunk) - Financing activities shifted from a large cash outflow of **$137.4 million in 2023** (due to SPAC redemptions) to a smaller outflow of **$8.9 million in 2024**, driven by mortgage note repayments and distributions[207](index=207&type=chunk)[211](index=211&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, specific transactions, and financial instrument details [1. Organization](index=12&type=section&id=1.%20Organization) Presidio Property Trust, Inc. is an internally-managed REIT focused on office, industrial, retail, and model home properties, maintaining REIT qualification by distributing at least 90% of its taxable income and utilizing Taxable REIT Subsidiaries (TRSs) for certain activities - The Company operates as an internally-managed REIT, owning **12 commercial properties** and **83 model home properties**[25](index=25&type=chunk)[85](index=85&type=chunk) - To maintain REIT status, the Company must distribute at least **90% of its REIT taxable income**[27](index=27&type=chunk) - Future capital needs include paying down existing borrowings, maintaining properties, funding tenant improvements, and paying dividends[29](index=29&type=chunk) - Future principal payments on mortgage notes payable are approximately **$11.7 million in 2024** and **$37.5 million in 2025**[31](index=31&type=chunk) [2. Significant Accounting Policies](index=13&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section details the company's accounting principles, including GAAP conformity for interim statements, consolidation policies for subsidiaries and partnerships, and the use of estimates in financial reporting [Basis of Presentation and Principles of Consolidation](index=13&type=section&id=Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) Explains the preparation of consolidated financial statements in accordance with GAAP and the inclusion of subsidiaries and partnerships - Consolidated financial statements are prepared in accordance with GAAP for interim statements and include Presidio Property Trust, Inc., its subsidiaries, and partnerships[35](index=35&type=chunk)[36](index=36&type=chunk) - Murphy Canyon Acquisition Corp. (SPAC) was consolidated until its business combination on September 22, 2023, when control was lost[37](index=37&type=chunk) [Key Accounting Estimates and Asset Valuation](index=14&type=section&id=Key%20Accounting%20Estimates%20and%20Asset%20Valuation) Discusses significant accounting estimates and valuation methodologies applied to assets like real estate, lease intangibles, and allowances for doubtful accounts - Significant estimates include private warrants, allocation of property purchase price, valuation of long-lived assets, and allowance for doubtful accounts[39](index=39&type=chunk) - Real estate assets are recorded at cost, with purchase price allocated to tangible and intangible assets (e.g., land, buildings, in-place leases, above/below-market leases)[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - Deferred leasing costs are capitalized and amortized over the lease terms, with net deferred leasing costs of approximately **$1.6 million** at September 30, 2024[46](index=46&type=chunk) [Cash, Restricted Cash, and Real Estate Held for Sale](index=15&type=section&id=Cash,%20Restricted%20Cash,%20and%20Real%20Estate%20Held%20for%20Sale) Provides details on the company's cash and restricted cash balances, along with properties classified as held for sale Cash, Cash Equivalents and Restricted Cash | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------------- | :----------- | :----------- | | Cash, cash equivalents and restricted cash | $7.2 million | $6.5 million | | Restricted cash | $3.5 million | $3.7 million | - As of September 30, 2024, two commercial properties (Union Town Center and Research Parkway) and five model homes were classified as 'held for sale'[48](index=48&type=chunk) [Impairments and Fair Value Measurements](index=15&type=section&id=Impairments%20and%20Fair%20Value%20Measurements) Addresses the company's policies and charges related to asset impairments and the fair value measurement of investments Non-Cash Impairment Charges (Three and Nine Months Ended Sep 30, 2024) | Period | Impairment Charge | | :--------------------------------------- | :------------------ | | Three months ended Sep 30, 2024 | ~$0.7 million | | Nine months ended Sep 30, 2024 | ~$0.9 million | - Impairment charges for model homes (approx. **$41,656 for 3 months**, **$238,449 for 9 months**) were due to abnormally short hold periods and builder style changes in Texas[52](index=52&type=chunk) - A **$0.7 million impairment** on Dakota Center was recognized due to the loan maturity and inability to agree on modification/extension, leading to a sale agreement with the lender[53](index=53&type=chunk) - Investments in Conduit Pharmaceuticals marketable securities were valued at approximately **$0.5 million** as of September 30, 2024, down from **$18.3 million** at December 31, 2023, due to fair value adjustments[56](index=56&type=chunk) [Earnings Per Share and Variable Interest Entities](index=18&type=section&id=Earnings%20Per%20Share%20and%20Variable%20Interest%20Entities) Explains the calculation of earnings per share and the company's involvement with variable interest entities - EPS is computed using the two-class method due to unvested restricted stock with non-forfeitable dividends[59](index=59&type=chunk) Potentially Dilutive Shares Excluded from EPS Calculation (Sep 30, 2024 vs. 2023) | Security Type | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Common Stock Warrants | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | | Placement Agent Warrants | 80,000 | 80,000 | 80,000 | 80,000 | | Series A Warrants | 14,450,069 | 14,450,069 | 14,450,069 | 14,450,069 | | Unvested Restricted Common Stock Grants | 2,034,663 | 1,292,238 | 2,034,663 | 1,292,238 | | Total potentially dilutive shares | 18,564,732 | 17,822,307 | 18,564,732 | 17,822,307 | - Murphy Canyon (SPAC) was consolidated as a Variable Interest Entity (VIE) until its business combination with Conduit Pharma on September 22, 2023, after which it was deconsolidated[64](index=64&type=chunk)[110](index=110&type=chunk) [Immaterial Error Corrections and Recent Accounting Pronouncements](index=19&type=section&id=Immaterial%20Error%20Corrections%20and%20Recent%20Accounting%20Pronouncements) Details corrections made to prior period financial statements and the company's evaluation of recently issued accounting standards - Corrections were made to prior period financial statements for restricted compensation expense (reclassified from liability to additional paid-in capital) and cash flow classification of unpaid building and tenant improvements[66](index=66&type=chunk)[68](index=68&type=chunk) - The Company is evaluating the impact of recently issued ASUs on Income Taxes (ASU 2023-09), Segment Reporting (ASU 2023-07), Business Combinations (ASU 2023-05), and Income Statement Expenses (ASU 2024-03), as well as SEC climate-disclosure rules[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [3. Recent Real Estate Transactions](index=20&type=section&id=3.%20RECENT%20REAL%20ESTATE%20TRANSACTIONS) The company engaged in both acquisitions and dispositions of model homes during the nine months ended September 30, 2024 and 2023, with a net gain on sales Real Estate Acquisitions (Nine Months Ended Sep 30) | Year | Model Homes Acquired | Purchase Price | | :--- | :------------------- | :------------- | | 2024 | 19 | ~$9.7 million | | 2023 | 25 | ~$13.7 million | Real Estate Dispositions (Nine Months Ended Sep 30) | Year | Model Homes Sold | Net Sales Proceeds | Net Gain | | :--- | :--------------- | :----------------- | :------- | | 2024 | 46 | ~$22.3 million | ~$3.2 million | | 2023 | 15 | ~$7.8 million | ~$2.3 million | [4. Real Estate Assets](index=22&type=section&id=4.%20REAL%20ESTATE%20ASSETS) The company's real estate portfolio consists of office, industrial, retail, and triple-net leased model home properties across several states, with net asset value decreasing from December 31, 2023, to September 30, 2024, due to dispositions and impairments - As of September 30, 2024, the Company owned **8 office/industrial properties** (758,175 sq ft), **3 retail properties** (65,242 sq ft), and **83 model home residential properties** (251,602 sq ft)[85](index=85&type=chunk) Real Estate Assets and Lease Intangibles, Net | Asset Type | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------------- | :----------- | :----------- | | Commercial properties | $91,332,215 | $93,365,637 | | Model Home properties | $40,082,995 | $50,790,147 | | Total real estate assets and lease intangibles, net | $131,415,210 | $144,155,784 | - Depreciation expense for the nine months ended September 30, 2024, was approximately **$3.8 million**, up from **$3.7 million in 2023**[87](index=87&type=chunk) - Union Town Center and Research Parkway commercial properties, along with **5 model homes**, were listed as held for sale as of September 30, 2024[48](index=48&type=chunk)[89](index=89&type=chunk) [5. Lease Intangibles](index=23&type=section&id=5.%20LEASE%20INTANGIBLES) The net value of lease intangible assets, including in-place leases and leasing costs, decreased from December 31, 2023, to September 30, 2024, with the company also holding net below-market lease liabilities Net Value of Lease Intangibles | Intangible Asset | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------------- | :----------- | :----------- | | In-place leases, net | $12,911 | $20,248 | | Leasing costs, net | $11,247 | $17,055 | | Above-market leases, net | $0 | $0 | | Total lease intangibles, net | $24,158 | $37,303 | - The net value of acquired intangible liabilities related to below-market leases was approximately **$9,535** at September 30, 2024, down from **$13,266** at December 31, 2023[90](index=90&type=chunk) Future Aggregate Amortization Expense for Lease Intangible Assets | Year | Amortization Expense | | :--- | :------------------- | | 2024 | $4,382 | | 2025 | $15,669 | | 2026 | $4,107 | | Total | $24,158 | [6. Other Assets](index=25&type=section&id=6.%20OTHER%20ASSETS) Other assets primarily consist of deferred rent receivable, prepaid expenses, notes receivable, and accounts receivable, with the company's investment in marketable securities (excluding Conduit) being zero as of September 30, 2024 Composition of Other Assets | Asset | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------------- | :----------- | :----------- | | Deferred rent receivable | $2,087,378 | $1,973,887 | | Prepaid expenses, deposits and other | $636,704 | $349,160 | | Notes receivable | $316,374 | $316,374 | | Accounts receivable, net | $135,353 | $694,869 | | Right-of-use assets, net | $69,962 | $15,649 | | Deferred offering costs | $0 | $5,000 | | Investment in marketable securities (not including Conduit) | $0 | $45,149 | | Total other assets | $3,245,771 | $3,400,088 | [7. Mortgage Notes Payable](index=26&type=section&id=7.%20MORTGAGE%20NOTES%20PAYABLE) The company's mortgage notes payable, net, decreased from $107.7 million at December 31, 2023, to $102.3 million at September 30, 2024, with several commercial property loans maturing within the next 12 months Mortgage Notes Payable, Net | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------------- | :----------- | :----------- | | Mortgage Notes Payable, net | $102,319,219 | $107,713,273 | | Weighted average interest rate (Sep 30, 2024) | 5.44% | 5.06% (Sep 30, 2023) | - The non-recourse loan on the Dakota Center property matured on July 6, 2024, and the property is being offered for sale to settle the loan balance[97](index=97&type=chunk)[152](index=152&type=chunk) - Five commercial property loans totaling approximately **$28.4 million** are maturing within the next 12 months, with management reviewing options including refinancing, restructuring, or selling[97](index=97&type=chunk)[192](index=192&type=chunk) Scheduled Principal Payments of Mortgage Notes Payable (as of Sep 30, 2024) | Year | Commercial Properties Notes Payable | Model Homes Notes Payable | Total Principal Payments | | :--------------------------------------- | :-------------------------------- | :------------------------ | :----------------------- | | 2024 | $9,367,570 | $2,321,811 | $11,689,381 | | 2025 | $28,644,941 | $8,885,311 | $37,530,252 | | 2026 | $16,521,100 | $1,008,650 | $17,529,750 | | 2027 | $157,739 | $551,267 | $709,006 | | 2028 | $168,907 | $9,119,969 | $9,288,876 | | Thereafter | $20,770,743 | $5,650,747 | $26,421,490 | | Total | $75,631,000 | $27,537,755 | $103,168,755 | [8. Notes Payable](index=28&type=section&id=8.%20NOTES%20PAYABLE) The company has an Economic Injury Disaster Loan (EIDL) from the SBA with a balance of approximately $144,854 as of September 30, 2024, and a promissory note to a subsidiary was paid in full in October 2024 - EIDL loan balance: **~$144,854** as of September 30, 2024, accruing interest at **3.75%** per year, maturing August 17, 2050[100](index=100&type=chunk) - A **$0.3 million promissory note** to a majority-owned subsidiary for a model home refinancing was paid in full in October 2024[101](index=101&type=chunk) [9. Investment in Conduit Pharmaceuticals](index=28&type=section&id=9.%20INVESTMENT%20IN%20CONDUIT%20PHARMACEUTICALS) The company sponsored Murphy Canyon Acquisition Corp. (SPAC), which completed its business combination with Conduit Pharma on September 22, 2023, leading to a significant decrease in the fair value of its investment and a substantial net loss - The Company sponsored Murphy Canyon Acquisition Corp. (SPAC), which completed its business combination with Conduit Pharmaceuticals Limited on September 22, 2023[104](index=104&type=chunk)[109](index=109&type=chunk) - Upon deconsolidation of Conduit, the Company recorded a gain of approximately **$40.3 million** in September 2023[110](index=110&type=chunk) Investment in Conduit Pharmaceuticals Marketable Securities | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------------- | :----------- | :----------- | | Fair Value | ~$0.5 million | ~$18.3 million | | Cost Basis | ~$7.5 million | N/A | | Net Loss (9 months ended Sep 30, 2024) | ~$17.8 million | N/A | - A lockup agreement was entered on April 22, 2024, for **2,700,000 shares** of Conduit common stock, in exchange for private warrants to purchase **540,000 shares**[112](index=112&type=chunk) [10. Commitments and Contingencies](index=31&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has estimated capital expenditures of approximately $1.0 million for tenant improvements and property expansion, while monitoring potential impacts from activist stockholder activities, litigation, environmental matters, and broader financial market risks - Estimated capital expenditures for existing properties: **~$1.0 million** for the rest of 2024[113](index=113&type=chunk) - An activist stockholder group's proxy contest was settled in May 2024, resulting in a new director appointment and customary standstill provisions[114](index=114&type=chunk) - No material litigation or environmental liabilities are currently known[115](index=115&type=chunk)[116](index=116&type=chunk) - The company monitors economic recession, interest rate increases, geopolitical conflicts, and inflation for potential impacts on commercial real estate fundamentals[117](index=117&type=chunk) [11. Stockholders' Equity](index=32&type=section&id=11.%20STOCKHOLDERS%27%20EQUITY) This section details the company's preferred and common stock, including recent offerings, dividend policies, and stock repurchase programs, highlighting the issuance of Series D Preferred Stock in June 2024 and the ongoing stock repurchase program for Series A Common Stock [Preferred Stock](index=32&type=section&id=Preferred%20Stock) Describes the Series D Preferred Stock, including its issuance, dividend terms, liquidation preference, and redemption features - On June 20, 2024, the Company issued **109,054 shares of Series D Preferred Stock** at **$16.00 per share**, generating gross proceeds of approximately **$1.74 million**[120](index=120&type=chunk) - Holders of Series D Preferred Stock are entitled to cumulative cash dividends at **9.375% per annum** (**$2.34375 per share annually**), payable monthly[121](index=121&type=chunk) - Series D Preferred Stock has a liquidation preference of **$25.00 per share** and is redeemable by the Company after June 15, 2026, or upon a Change of Control[124](index=124&type=chunk)[126](index=126&type=chunk) Dividends Paid to Series D Preferred Stockholders | Period | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Dividends Paid | ~$0.6 million | ~$0.5 million | ~$1.7 million | ~$1.6 million | [Common Stock and Warrants](index=33&type=section&id=Common%20Stock%20and%20Warrants) Details the authorized common stock, outstanding warrants, and recent common stock issuances - The Company is authorized to issue up to **100,000,000 shares of Series A Common Stock**, with identical rights except for Series B (no liquidation rights)[128](index=128&type=chunk) - Common Stock Warrants (**2,000,000 shares** at **$5.50 exercise price**) and Placement Agent Warrants (**80,000 shares** at **$6.25 exercise price**) remain unexercised as of September 30, 2024[129](index=129&type=chunk)[130](index=130&type=chunk) - Series A Warrants (**14,450,069 shares** at **$7.00 exercise price**) were distributed in January 2022 and will automatically convert to **1/10 of a common share** at expiration if unexercised[212](index=212&type=chunk)[213](index=213&type=chunk) - In July 2024, **78,215 shares of Series A Common Stock** were issued to a noncontrolling trust in exchange for their **36.4% ownership** in NetREIT Genesis II[89](index=89&type=chunk)[131](index=131&type=chunk) [Stock Repurchase Program and Dividends](index=34&type=section&id=Stock%20Repurchase%20Program%20and%20Dividends) Outlines the company's stock repurchase program and dividend declarations for common and preferred stock - A stock repurchase program authorized in November 2023 allows for up to **$6.0 million of Series A Common Stock** and **$4.0 million of Series D Preferred Stock**, expiring November 2024[132](index=132&type=chunk) Stock Repurchases (Nine Months Ended Sep 30, 2024) | Stock Type | Shares Repurchased | Total Cost | Average Price Per Share | | :--------------------------------------- | :----------------- | :--------- | :---------------------- | | Series A Common Stock | 137,709 | $97,394 | ~$0.7072 | | Series D Preferred Stock | 0 | $0 | N/A | - No cash dividends were declared or paid on Series A Common Stock for the nine months ended September 30, 2024, compared to **$0.9 million in 2023**[133](index=133&type=chunk)[197](index=197&type=chunk) [12. Share-Based Incentive Plan](index=35&type=section&id=12.%20SHARE-BASED%20INCENTIVE%20PLAN) The company maintains a restricted stock incentive plan for officers, employees, and board members, with shares vesting over three to ten years, and the plan was amended to increase available shares and includes an evergreen provision - The 2017 Incentive Award Plan was amended to increase available shares to **3.5 million** and includes an evergreen provision to automatically increase shares to **15% of outstanding common stock**[136](index=136&type=chunk) Restricted Stock Activity (Nine Months Ended Sep 30, 2024) | Metric | Common Shares | | :--------------------------------------- | :-------------- | | Balance at Dec 31, 2023 | 760,995 | | Granted | 1,437,746 | | Vested | (164,078) | | Balance at Sep 30, 2024 | 2,034,663 | | Shares available to grant | ~63,000 | Share-Based Compensation Expense | Period | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Compensation Expense | ~$0.3 million | ~$0.3 million | ~$1.2 million | ~$0.8 million | [13. Segments](index=35&type=section&id=13.%20SEGMENTS) The company operates in three reportable segments: Office/Industrial Properties, Model Home Properties, and Retail Properties, with performance evaluated based on Net Operating Income (NOI), which showed increases across all segments for the nine months ended September 30, 2024 - Reportable segments: Office/Industrial Properties, Model Home Properties, and Retail Properties[139](index=139&type=chunk) - Segment performance is evaluated using Net Operating Income (NOI), which excludes non-property income/expenses, depreciation, and G&A[140](index=140&type=chunk) Net Operating Income (NOI) by Segment (Nine Months Ended Sep 30) | Segment | 2024 NOI | 2023 NOI | YoY Change | | :--------------------------------------- | :--------- | :--------- | :--------- | | Office/Industrial Properties | $5,036,099 | $4,843,580 | +3.97% | | Model Home Properties | $3,306,049 | $2,848,942 | +16.04% | | Retail Properties | $1,103,741 | $1,004,388 | +9.89% | | Total NOI | $9,445,889 | $8,696,910 | +8.61% | Capital Expenditures by Reportable Segment (Nine Months Ended Sep 30) | Segment | 2024 Capital Expenditures | 2023 Capital Expenditures | | :--------------------------------------- | :------------------------ | :------------------------ | | Office/Industrial Properties | $1,462,957 | $2,691,721 | | Model Home Properties (Acquisition) | $9,729,351 | $13,715,923 | | Retail Properties | $211,321 | $126,065 | | Total real estate investments | $11,403,629 | $16,533,709 | [14. Income Tax Provision](index=37&type=section&id=14.%20INCOME%20TAX%20PROVISION) As a REIT, the company is generally exempt from federal income tax on distributed earnings but is subject to taxes on its Taxable REIT Subsidiaries (TRSs), with a current income tax provision of $168,140 recorded for TRS activities for the nine months ended September 30, 2024 - The Company operates as a REIT, requiring annual distribution of at least **90% of REIT taxable income**[145](index=145&type=chunk) - A current income tax provision of **$168,140** was recorded for TRS activities for the nine months ended September 30, 2024[146](index=146&type=chunk) - A deferred tax asset of **$346,762** related to TRS operating activities was maintained as of September 30, 2024[146](index=146&type=chunk) [15. Related Party](index=38&type=section&id=15.%20RELATED%20PARTY) The company leases portions of its corporate headquarters to entities owned by its CEO and his wife, and receives full payroll reimbursement for employee services provided to these entities Related Party Transactions (Three and Nine Months Ended Sep 30) | Transaction Type | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Rent billed to related entities | $2,688 | $2,688 | $8,064 | $8,064 | | Payroll reimbursement received | ~$32,611 | ~$37,103 | ~$108,326 | ~$114,453 | [16. Subsequent Events](index=38&type=section&id=16.%20SUBSEQUENT%20EVENTS) Subsequent events include the transfer of Conduit common stock to the former CFO as part of an accrued bonus and the ongoing process of selling the Dakota Center property to settle its matured non-recourse loan - In October 2024, **1,045,805 shares of Conduit common stock** (fair market value **$113,679**) were transferred to the former CFO as part of an accrued bonus[151](index=151&type=chunk) - The Dakota Center property is being offered for sale in October 2024, in conjunction with the lender, to settle the non-recourse loan that matured on July 6, 2024[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=ITEM%202.%20Management%27s%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, highlighting key trends, significant transactions, and liquidity management strategies for both short-term and long-term needs [Overview](index=39&type=section&id=OVERVIEW) Provides a high-level summary of the company's business, including its REIT status, diversified property portfolio, and recent strategic committee establishment - The Company is an internally managed, diversified REIT with holdings in office, industrial, retail, and triple-net leased model home properties[156](index=156&type=chunk) - As of September 30, 2024, the portfolio includes **8 office/industrial buildings**, **3 retail shopping centers**, and **83 model home residential properties**[156](index=156&type=chunk) - A Strategic Planning and Cyber Committee was established in June 2024 to oversee business strategy and cybersecurity risks[160](index=160&type=chunk) [Significant Transactions in 2024 and 2023](index=40&type=section&id=SIGNIFICANT%20TRANSACTIONS%20IN%202024%20AND%202023) Highlights key real estate acquisition and disposition activities undertaken by the company during 2024 and 2023 Real Estate Acquisitions (Nine Months Ended Sep 30) | Year | Model Homes Acquired | Purchase Price | | :--- | :------------------- | :------------- | | 2024 | 19 | ~$9.7 million | | 2023 | 25 | ~$13.7 million | Real Estate Dispositions (Nine Months Ended Sep 30) | Year | Model Homes Sold | Net Sales Proceeds | Net Gain | | :--- | :--------------- | :----------------- | :------- | | 2024 | 46 | ~$22.3 million | ~$3.2 million | | 2023 | 15 | ~$7.8 million | ~$2.3 million | [Management Evaluation of Results of Operations](index=41&type=section&id=MANAGEMENT%20EVALUATION%20OF%20RESULTS%20OF%20OPERATIONS) Explains management's approach to evaluating operational performance, focusing on cash flow generation and property value enhancement rather than non-cash charges - Management assesses operating results based on cash flow generation for expenses, debt service, and distributions, de-emphasizing non-cash charges like depreciation and impairment[168](index=168&type=chunk) - Focus is on increasing and enhancing property value, re-leasing efforts, and reinvesting proceeds from property sales into new acquisitions[169](index=169&type=chunk) [Results of Operations (Three Months Ended September 30, 2024 and 2023)](index=41&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20THREE%20MONTHS%20ENDED%20SEPTEMBER%2030,%202024%20AND%202023) Presents a comparative analysis of the company's financial performance for the three months ended September 30, 2024, and 2023, detailing revenue, expenses, and net income changes Key Financial Metrics (Three Months Ended Sep 30) | Metric | 2024 | 2023 | Change | | :--------------------------------------- | :----------- | :----------- | :------- | | Total Revenues | ~$4.7 million | ~$4.5 million | +4.4% | | Rental Operating Costs | ~$1.6 million | ~$1.5 million | +8.1% | | G&A Expenses | ~$1.6 million | ~$1.6 million | Flat | | Depreciation and Amortization | ~$1.5 million | ~$1.4 million | +7.1% | | Asset Impairments | ~$0.7 million | $0 | N/A | | Interest Expense - mortgage notes | ~$1.5 million | ~$1.4 million | +7.1% | | Gain on Sale of Real Estate, net | ~$0.4 million | ~$0.8 million | -50% | | Loss on Conduit remeasurement | ~$3.9 million | ~$17.7 million | -77.9% | | Income allocated to non-controlling interests | ~$0.4 million | ~$0.7 million | -42.9% | - Total revenues increased due to new commercial leases at Grand Pacific Center and model home transaction fees, partially offset by reduced model home income[170](index=170&type=chunk) - Asset impairments of **~$0.7 million** were recognized, primarily for Dakota Center due to loan maturity issues and for three model homes due to short hold periods and builder style changes[174](index=174&type=chunk) - Loss on Conduit remeasurement significantly decreased from **$17.7 million in 2023** to **$3.9 million in 2024**, reflecting fair value adjustments of the investment[178](index=178&type=chunk) [Results of Operations (Nine Months Ended September 30, 2024 and 2023)](index=42&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20NINE%20MONTHS%20ENDED%20SEPTEMBER%2030,%202024%20AND%202023) Provides a detailed comparative analysis of the company's financial performance for the nine months ended September 30, 2024, and 2023, covering revenue, expenses, and key financial metrics Key Financial Metrics (Nine Months Ended Sep 30) | Metric | 2024 | 2023 | Change | | :--------------------------------------- | :----------- | :----------- | :------- | | Total Revenues | ~$14.1 million | ~$13.1 million | +7.6% | | Rental Operating Costs | ~$4.7 million | ~$4.5 million | +4.4% | | G&A Expenses | ~$5.9 million | ~$5.4 million | +9.3% | | Depreciation and Amortization | ~$4.2 million | ~$4.1 million | +2.4% | | Asset Impairments | ~$0.9 million | $0 | N/A | | Interest Expense - mortgage notes | ~$4.5 million | ~$3.6 million | +25% | | Gain on Sale of Real Estate, net | ~$3.2 million | ~$2.3 million | +39.1% | | Loss on Conduit remeasurement | ~$17.8 million | ~$17.7 million | +0.6% | | Income allocated to non-controlling interests | ~$2.3 million | ~$2.2 million | +4.5% | - Total revenues increased due to higher model home transaction fees, new commercial leases (Grand Pacific Center), and management fees from Conduit Pharma (terminated June 2024)[179](index=179&type=chunk) - G&A expenses increased by **~$0.5 million**, mainly due to consulting, proxy solicitation, and legal fees related to the 2024 annual meeting and settlement with Zuma Capital, plus higher stock compensation and bonus accruals[182](index=182&type=chunk) - Geographic diversification of commercial properties: Colorado (**39.4% of square feet**, **47.3% of annual rent**), North Dakota (**48.4% of square feet**, **30.6% of annual rent**)[189](index=189&type=chunk) - Model home properties are concentrated in Texas (**93.4% of square feet**, **91.0% of annual rent**)[190](index=190&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses the company's sources and uses of liquidity, including anticipated cash flows, debt obligations, and capital expenditure plans - Anticipated liquidity sources include existing cash, cash flows from operations, refinancing, real estate sales, new borrowings, and equity/debt issuance[191](index=191&type=chunk) - Short-term needs: operating costs, debt service, tenant improvements, leasing commissions, and dividends[192](index=192&type=chunk) - Five commercial property loans, totaling **~$28.4 million**, are maturing in the next 12 months, in addition to the Dakota Center loan[192](index=192&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 November 2023, expiring November 2024[194](index=194&type=chunk) - Cash and restricted cash totaled **~$7.2 million** at September 30, 2024, with **~$1.5 million to $2.0 million** earmarked for capital expenditures[201](index=201&type=chunk) - Commercial properties have **$75.6 million** in fixed-rate mortgage notes payable (weighted-average interest rate **4.97%**), while model homes have **$27.5 million** (weighted-average interest rate **6.74%**)[202](index=202&type=chunk)[203](index=203&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30) | Activity | 2024 | 2023 | | :--------------------------------------- | :----------- | :----------- | | Operating Activities | Used ~$1.0 million | Used ~$0.4 million | | Investing Activities | Provided ~$10.7 million | Provided ~$129.0 million | | Financing Activities | Used ~$8.9 million | Used ~$137.4 million | - The significant change in investing and financing cash flows from 2023 to 2024 was primarily due to the absence of SPAC redemptions in 2024[205](index=205&type=chunk)[207](index=207&type=chunk) - The company's exposure to inflation is reduced by triple-net lease agreements, where tenants are responsible for property expenses[215](index=215&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the registrant is not required to provide specific quantitative and qualitative disclosures about market risk - The Company is exempt from providing quantitative and qualitative disclosures about market risk as a smaller reporting company[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures, identifying a material weakness in internal control over financial reporting related to the annual income tax provision for REIT and non-REIT subsidiaries and Conduit shares - A material weakness was identified in internal control over financial reporting related to the annual income tax provision, specifically for REIT and non-REIT subsidiaries and Conduit shares[218](index=218&type=chunk) - The material weakness stems from a lack of formal review and approval processes and inadequate internal controls for income tax provision[218](index=218&type=chunk) - Remediation measures include adding controls, engaging third-party experts, and continuously monitoring the taxable status of subsidiaries[221](index=221&type=chunk) [Part II. Other Information](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings or threatened litigation - No material legal proceedings are currently ongoing or threatened against the Company[222](index=222&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section states that there are no new material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K/A - No new material changes to risk factors since the 2023 Annual Report on Form 10-K/A[223](index=223&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has an active stock repurchase program for its Series A Common Stock and Series D Preferred Stock, and during the nine months ended September 30, 2024, the company repurchased Series A Common Stock - A stock repurchase program authorized in November 2023 allows for up to **$6.0 million of Series A Common Stock** and **$4.0 million of Series D Preferred Stock**, expiring November 2024[224](index=224&type=chunk) Series A Common Stock Repurchases (Nine Months Ended Sep 30, 2024) | Month | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet Be Purchased | | :--------------------------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------- | | January 2024 | — | $— | $6,000,000 | | February 2024 | — | $— | $6,000,000 | | March 2024 | — | $— | $6,000,000 | | April 2024 | — | $— | $6,000,000 | | May 2024 | — | $— | $6,000,000 | | June 2024 | 10,446 | $0.729 | $5,992,387 | | July 2024 | — | $— | $5,992,387 | | August 2024 | 44,190 | $0.679 | $5,962,369 | | September 2024 | 83,073 | $0.719 | $5,902,606 | | Total | 137,709 | $0.707 | $5,902,606 | [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[227](index=227&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures to report - No mine safety disclosures to report[228](index=228&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No other information is reported in this section - No other information is reported[229](index=229&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications, XBRL documents, and the cover page interactive data file - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[230](index=230&type=chunk)[232](index=232&type=chunk)