PRESIDIO PROPERT(SQFTP) - 2025 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2025 and 2024 ITEM 1. FINANCIAL STATEMENTS 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 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] Consolidated Statements of Operations 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] - 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] Consolidated Statements of Changes in Equity 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] Consolidated Statements of Cash Flows 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] - Net cash used in operating activities improved from $(866,768) in Q1 2024 to $(118,905) in Q1 2025[23] Notes to Consolidated Financial Statements 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 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] - 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] - 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][33] 2. SIGNIFICANT ACCOUNTING POLICIES 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][35] - The company consolidates its subsidiaries and partnerships, including NetREIT Partnerships and Model Home Partnerships, where it directs activities and has control[37] - 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][52] 3. RECENT REAL ESTATE TRANSACTIONS 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] - Acquisitions (Q1 2024): 5 model homes for approximately $2.2 million (cash: $0.6 million, mortgage notes: $1.6 million)[73] - 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] - Dispositions (Q1 2024): Sold 27 model homes for $12.6 million, recognizing a gain of $2.0 million[74] 4. REAL ESTATE ASSETS 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] 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] 5. LEASE INTANGIBLES 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] 6. OTHER ASSETS 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] 7. MORTGAGE NOTES PAYABLE 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] - Scheduled principal payments for mortgage notes payable total approximately $27.8 million for the remainder of 2025 and $18.4 million for 2026[88] - 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] 8. NOTES PAYABLE 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] - 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] 9. INVESTMENT IN CONDUIT PHARMACEUTICALS 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] - 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] - 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] 10. COMMITMENTS AND CONTINGENCIES 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] - The company resolved a proxy contest with an activist stockholder group by appointing Elena Piliptchak to its board of directors in May 2024[94] - The company is not currently subject to any material litigation or environmental liabilities that would materially affect its financial condition[95][96] 11. STOCKHOLDERS' EQUITY 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][108] - 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] - 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] - During Q1 2025, the company repurchased 12,844 shares of Series D Preferred Stock for approximately $194,971[113] - 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] 12. SHARE-BASED INCENTIVE PLAN 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] - As of March 31, 2025, 1,319,715 non-vested restricted shares were outstanding, with approximately 63,797 shares available for grant[119] - Share-based compensation expense decreased from $0.5 million in Q1 2024 to $0.2 million in Q1 2025[119] 13. SEGMENTS 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][121] 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] 14. INCOME TAX PROVISION 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] - 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] 15. RELATED PARTY 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] - 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] 16. SUBSEQUENT EVENTS 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] - 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] - 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] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 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] 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][148] - 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][150] - A Strategic Planning and Cyber Committee was established in June 2024 to oversee business strategy and cybersecurity risks[151] SIGNIFICANT TRANSACTIONS IN 2025 AND 2024 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] - Q1 2024 Acquisitions: 5 model homes for approximately $2.2 million[155] - 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] - Q1 2024 Dispositions: Sold 27 model homes for $12.6 million (gain $2.0 million)[156] CRITICAL ACCOUNTING POLICIES 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] MANAGEMENT EVALUATION OF RESULTS OF OPERATIONS 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] - Focus is on increasing and enhancing property value, improving underperforming assets through re-leasing, and reinvesting proceeds from property sales into new acquisitions[159] RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024 This section provides a comparative analysis of the company's financial results for the first quarters of 2025 and 2024 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] Rental Operating Costs 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] General and Administrative Expenses 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] Depreciation and Amortization 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] Asset Impairments 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] Interest Expense - mortgage notes 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] Gain on Sale of Real Estate Assets, net 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] Income allocated to non-controlling interests 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] Loss on Conduit remeasurement 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] Geographic Diversification Tables 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 This section discusses the company's ability to meet its short-term and long-term financial obligations and fund its operations Overview (Liquidity) 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] - Management believes current working capital and refinancing capabilities will fund operations for at least the next twelve months[174] - 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] Cash Equivalents and Restricted Cash 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] Secured Debt 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][183] - Three commercial property loans totaling approximately $28.2 million will mature within the next 12 months[182] - 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] Cash Flow for the three months ended March 31, 2025, and March 31, 2024 This section provides a comparative analysis of cash flows from operating, investing, and financing activities Operating Activities 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] Investing Activities 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] - The company projects up to $1.8 million in capital improvements, tenant improvements, and leasing costs for the next 12 months[186] Financing Activities 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][191] Off-Balance Sheet Arrangements 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][190][193] - 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][190][193] 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][195] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 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] ITEM 4. CONTROLS AND PROCEDURES 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] - No material changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025[199] PART II — OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, and other general information ITEM 1. Legal Proceedings 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] ITEM 1A. Risk Factors 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] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 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] - During the three months ended March 31, 2025, no shares of Series A Common Stock were repurchased[202] - 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] Stock repurchases for Series A Common Stock 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] Stock repurchases for Series D Preferred Stock 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] ITEM 3. Defaults Upon Senior Securities 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][207] - The default triggers a 5% increase above the original interest rate and requires payment of lender's expenses[207] ITEM 4. Mine Safety Disclosures The company has no disclosures related to mine safety - No mine safety disclosures are applicable to the company[208] ITEM 5. Other Information 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] ITEM 6. Exhibits 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][211] 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]