Presidio Property Trust(SQFT) - 2023 Q1 - Quarterly Report

Part I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, highlighting a decrease in total assets to $177.0 million and a net loss of $0.6 million for the quarter Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $176,974,428 | $291,351,654 | | Real estate assets, net | $133,871,076 | $130,512,230 | | Cash, cash equivalents and restricted cash | $11,891,930 | $16,516,725 | | Investments held in Trust | $23,658,838 | $136,871,183 | | Total Liabilities | $110,857,595 | $108,097,447 | | Mortgage notes payable, total net | $99,549,560 | $96,898,699 | | SPAC Class A common stock subject to possible redemption | $16,501,755 | $130,411,135 | | Total Equity | $49,615,078 | $52,843,072 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Account | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total revenue | $4,121,491 | $4,573,141 | | Total costs and expenses | $4,873,184 | $4,506,389 | | Net income (loss) | ($608,459) | $380,190 | | Net loss attributable to Presidio Property Trust, Inc. common stockholders | ($1,530,988) | ($3,824,053) | | Net loss per share (Basic & Diluted) | ($0.13) | ($0.32) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,628,129) | ($978,260) | | Net cash provided by (used in) investing activities | $109,551,682 | ($122,314,726) | | Net cash (used in) provided by financing activities | ($112,548,348) | $131,085,492 | | Net (decrease) increase in cash | ($4,624,795) | $7,792,506 | Notes to Condensed Consolidated Financial Statements These notes detail accounting policies, real estate portfolio, mortgage debt of $100.4 million, and the significant redemption of 11.0 million SPAC shares - The company is an internally-managed REIT owning 12 commercial properties and an interest in a SPAC as of March 31, 2023[27] - As the financial sponsor of Murphy Canyon Acquisition Corp. (SPAC), the company consolidated its financials; 11,037,272 SPAC shares were redeemed in February 2023, reducing the trust account from $137 million to $24 million[37][61][100] Real Estate Portfolio Summary (as of March 31, 2023) | Property Type | Count/Square Feet | | :--- | :--- | | Office/Industrial Properties | 8 office buildings, 1 industrial property (756,823 sq ft) | | Retail Properties | 3 retail shopping centers (65,242 sq ft) | | Model Home Properties | 98 residential properties (295,017 sq ft) | - Total mortgage notes payable amounted to approximately $100.4 million as of March 31, 2023, with $4.4 million in principal payments due in the remainder of 2023[85][88] - In Q1 2023, the company repurchased 386 shares of Series D Preferred Stock for $6,947 under its stock repurchase program[116] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the decrease in Q1 2023 total revenue to $4.1 million due to lease non-renewal and property sale, alongside increased G&A expenses and liquidity position - Total revenues decreased to $4.1 million in Q1 2023 from $4.6 million in Q1 2022, primarily due to a major lease non-renewal and property sale[154] - General & Administrative (G&A) expenses increased to $2.0 million in Q1 2023 from $1.6 million in Q1 2022, representing 47.7% of total revenue[156] - As of March 31, 2023, the company held $11.9 million in cash, cash equivalents, and restricted cash, deemed sufficient for the next twelve months of operations, capital expenditures, and dividends[162][165] Quarterly Dividends Declared Per Share | Stock Series | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Series A Common Stock | $0.022 | $0.105 | | Series D Preferred Stock (Total) | $0.58593 | $0.58593 | - Outstanding warrants, if fully exercised, could generate approximately $111.7 million in gross proceeds and result in the issuance of over 16.5 million new common shares[179][180][182] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Presidio Property Trust, Inc. is exempt from providing disclosures under this item - The company is a smaller reporting company and is not required to provide disclosure pursuant to this item[185] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer concluded that the company's disclosure controls and procedures were effective as of the period end[187] - No material changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2023[188] Part II. OTHER INFORMATION Item 1. Legal Proceedings The company reported no material legal proceedings during the period - No material legal proceedings were reported[189] Item 1A. Risk Factors A new risk factor related to the Inflation Reduction Act of 2022's 1% excise tax on stock repurchases has been identified, resulting in a $1,140,683 liability - A new risk factor involves the Inflation Reduction Act of 2022, imposing a 1% excise tax on stock repurchases, potentially affecting Class A common stock redemptions[191] - A $1,140,683 excise tax liability was recorded as of March 31, 2023, related to the redemption of 11,037,272 SPAC Class A Common Stock shares[194] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered equity sales, repurchasing 386 shares of Series D Preferred Stock but no Series A Common Stock under its program - A stock repurchase program authorized on September 15, 2022, allows for up to $6 million of Series A Common Stock and up to $4 million of Series D Preferred Stock repurchases[195] Stock Repurchases for Q1 2023 | Stock Series | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Series A Common Stock | 0 | N/A | | Series D Preferred Stock | 386 | Not disclosed | Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported[201] Item 4. Mine Safety Disclosures The company reported no mine safety disclosures - No mine safety disclosures were reported[202] Item 5. Other Information The company reported no other information - No other information was reported[203] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including SPAC-related notes and CEO/CFO certifications - Exhibits include a Form of Note for Murphy Canyon Acquisition Corp., CEO and CFO certifications (Sarbanes-Oxley Sections 302 and 906), and Inline XBRL documents[204]