MDRR 10-K & 10-Q changes, risk factors and insider trading
Medalist Diversified, Inc. · Nasdaq · Real Estate Investment Trusts · CIK 1654595 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to our Capital Allocation and Investment Strategy”
New heading “Risks Related to our Delaware Statutory Trust (DST) Program”
New heading “Risks Related to the Real Estate Industry and Real Estate Held in our Legacy Portfolio and through our DST Program”
New heading “Risks Associated with Debt Financing”
New heading “Risks Related to our REIT Status Through December 31, 2025”
New heading “Risks Related to our Operations and Internal Controls”
New heading “Risks Related to our Financial Condition”
New heading “Risks Related to our Public Company Status and the Ownership of our Common Stock”
New heading “We may not successfully execute our strategic repositioning.”
New heading “We are seeking to maximize stockholder value by exploring strategic alternatives. There can be no assurance that we will be successful in executing a strategic transaction.”
New heading “Our ability to dispose of certain of our legacy real estate assets on favorable terms is subject to real estate market conditions, capital markets availability, buyer demand, interest rate levels, and other factors beyond our control.”
New heading “We intend to remain a publicly traded company following our strategic transition, which requires us to continue to incur substantial general and administrative expenses”
New heading “Our obligations to pay income taxes may increase beginning in 2026, which will result in a reduction to our earnings, and could have negative consequences to us.”
New heading “We may fail to realize the anticipated benefits of revoking our REIT election and becoming a taxable corporation effective January 1, 2026, or those benefits may take longer to realize than expected, if at all, or may not offset the costs of revoking our REIT election and becoming a taxable corporation.”
New heading “Our revocation of our REIT election will change the tax treatment of our dividends.”
New heading “We may not be able to fully utilize our NOL and NCL carryforwards, which could adversely affect our results of operations.”
New heading “Preserving the ability to use our NOLs and NCLs may cause us to forgo otherwise attractive opportunities.”
New heading “Our strategic transition could impact market perception of our publicly traded stock.”
New heading “Risks Related to our Capital Allocation and Investment Strategy”
New heading “We may be unable to execute our strategic framework, which contemplates the potential acquisition of operating businesses, investment platforms, or other assets that we believe may enhance stockholder value.”
New heading “We may experience market risk associated with our treasury and investment portfolio.”
New heading “We may not be able to deploy our cash balances effectively, and holding significant cash reserves may adversely affect our financial performance and stockholder returns.”
New heading “Our investments will include marketable securities which are subject to market, interest and credit risk that may reduce its value.”
New heading “We plan to continue to operate our business so that we are not required to register as an investment company under the Investment Company Act.”
New heading “Our investment in bitcoin is subject to market volatility and regulatory uncertainty.”
New heading “Risks Related to our Delaware Statutory Trust (DST) Program”
New heading “The DST Program could subject us to liabilities from litigation or otherwise.”
New heading “The DST Program will not shield us from risks related to the performance of the DST Properties held through such structures.”
New heading “DST Properties may be less liquid than other assets, which could impair our ability to utilize cash proceeds from sales of such DST Properties for other purposes such as paying down debt, distributions or additional investments.”
New heading “Competition for investors in Delaware Statutory Trust offerings may adversely affect our DST sponsorship business.”
New heading “Restrictions in a tenant in common agreement related to the Parkway Property may adversely impact our investment in that property.”
New heading “The use of debt may limit our financial flexibility in the future.”
New heading “The use of leverage to make real estate investments exposes our investment to additional risk.”
New heading “Leveraging a real estate investment allows a lender to foreclose on that real estate investment.”
New heading “Failure to maintain certain financial thresholds could trigger cash management controls and adversely affect our liquidity.”
New heading “Risks Related to our REIT Status Through December 31, 2025”
New heading “If we failed to remain qualified as a REIT for those years we elected REIT status, we would be subject to higher taxes and have reduced cash available for stockholders.”
New heading “The prohibited transactions tax may subject us to tax on our gain from sales of property during those years we elected REIT status.”
New heading “If our Operating Partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT for those years that we elected REIT status and suffer other adverse consequences.”
New heading “Risks Related to our Organization, Operations and Internal Controls”
New heading “Maryland law may limit the ability of a third party to acquire control of us.”
New heading “We may utilize artificial intelligence, which could expose us to liability and affect our business.”
New heading “Risks Related to our Financial Condition”
New heading “Our charter permits our Board to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders.”
New heading “We may change our investment strategy and operational policies without stockholder consent.”
New heading “Our Operating Partnership may issue additional OP Units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our Operating Partnership and would have a dilutive effect on the amount of distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our stockholders.”
New heading “Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of OP Units, which may impede business decisions that could benefit our stockholders.”
New heading “Risks Related to Macroeconomic and Market Factors”
New heading “Actual and perceived changes in U.S. trade policies, including changes to existing trade agreements and heightened global trade tensions may have a material adverse effect on our business, results of operations and financial condition.”
Removed heading “Risks Related to Our Business and Investments”
Removed heading “Risks Related to the Real Estate Industry and Investments in Real Estate”
Removed heading “Risks Related to the Ownership of Our Common Stock”
Removed heading “Restrictions in a tenants in common agreement related to the Parkway Property may adversely impact our investment in that property.”
Removed heading “We utilize, and intend to continue to utilize, leverage, which may limit our financial flexibility in the future.”
Removed heading “Risks Related to Taxes and Our Taxation as a REIT”
Removed heading “Our failure to qualify as a REIT would result in higher taxes and reduced cash available for stockholders.”
Removed heading “REIT distribution requirements could adversely affect our liquidity.”
Removed heading “Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.”
Removed heading “Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flows.”
Removed heading “You may be restricted from acquiring or transferring certain amounts of our common stock.”
Removed heading “Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.”
Removed heading “The prohibited transactions tax may subject us to tax on our gain from sales of property and limit our ability to dispose of our properties.”
Removed heading “We may be unable to generate sufficient revenue from operations, operating cash flow or portfolio income to pay our operating expenses, and our operating expenses could rise, diminishing our ability to pay distributions to our stockholders.”
Removed heading “Although our use of TRSs may partially mitigate the impact of meeting the requirements necessary to maintain our qualification as a REIT, our ownership of and relationship with our TRSs will be limited, and a failure to comply with the limits would jeopardize our REIT qualification and may result in the application of a 100% excise tax.”
Removed heading “Distributions to tax-exempt investors may be classified as unrelated business taxable income and tax-exempt investors would be required to pay tax on the unrelated business taxable income and to file income tax returns.”
Removed heading “The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders.”
Removed heading “If our operating partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences.”
Removed heading “Complying with REIT requirements may limit our ability to hedge risk effectively.”
Removed heading “We may use leverage to make Investments.”
Removed heading “Leveraging an Investment allows a lender to foreclose on that Investment.”
Removed heading “A limit on the percentage of our securities a person may own may discourage a takeover or business combination, which could prevent our stockholders from realizing a premium price for their stock.”
Removed heading “Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders.”
Removed heading “We may change our investment and operational policies without stockholder consent.”
Largest changes
“We are subject to the information and reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, and file periodic reports (Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), proxy statements and other information with the Securities and Exchange Commission. As a publicly reporting company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. We are also required to establish and maintain effective disclosure controls. …”see in full comparison
“We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and file periodic reports (Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), proxy statements and other information with the Securities and Exchange Commission. As a publicly reporting company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. We are also required to establish and maintain effective disclosure controls. …”see in full comparison
“Our new strategy includes holding investments in marketable securities. These investments could consist of U.S. treasuries and other equity and debt instruments. We currently do not use derivative financial instruments to adjust our investment portfolio risk or income profile. These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks, which may be exacerbated by unusual events, such as the COVID-19 pandemic and the U.S. …”see in full comparison
“Changes in international trade policies, including the imposition of tariffs, duties, import taxes, or other trade restrictions by the United States or foreign governments, could adversely impact the operations of our retail tenants. Our tenants could source a substantial portion of their merchandise, raw materials, or manufacturing services from foreign countries. …”see in full comparison
“Our property-level mortgage loans may contain provisions requiring our Company to maintain minimum financial thresholds, and failure to satisfy these requirements may constitute a “Trigger Event” under the applicable loan documents. …”see in full comparison
“We may change our investment and operational policies, including our policies with respect to investments, acquisitions, growth, operations, indebtedness, capitalization and distributions, at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, the types of investments described in this filing. A change in our investment strategy may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect our ability to make distributions. …”see in full comparison
Full comparison: every changed paragraph (233)
The following is a summary of the principal risks that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face and is qualified in its entirety by reference to the more detailed descriptions included in Part I, Item 1A “— Risk Factors”. This summary should be read together with those more detailed descriptions, along with our other SEC filings before making an investment decision.
Risks Related to Our Business and Investments
Risks Related to the Real Estate Industry and Investments in Real Estate
Risks Related to Taxesour Strategic Transition and OurTermination Taxationof as aour REIT Status
Risks Related to our Capital Allocation and Investment Strategy
Risks Related to our Delaware Statutory Trust (DST) Program
Risks Related to the Real Estate Industry and Real Estate Held in our Legacy Portfolio and through our DST Program
Risks Associated with Debt Financing
Risks Related to our REIT Status Through December 31, 2025
Risks Related to our Operations and Internal Controls
Risks Related to our Financial Condition
Risks Related to our Public Company Status and the Ownership of our Common Stock
Risks Related to the Ownership of Our Common Stock
Risks Related to Ourour BusinessStrategic Transition and InvestmentsTermination of our REIT Status
We may not successfully execute our strategic repositioning.
We are in the process of repositioning our business from a traditional equity REIT model toward our DST Program and a more capital allocation–focused structure, which includes monetizing certain legacy real estate assets, developing fee-based business lines, managing an investment portfolio, and evaluating potential strategic transactions. The successful execution of this repositioning depends on a number of factors, many of which are outside of our control, including market conditions, access to capital, regulatory considerations, and the availability of attractive investment opportunities.
Our repositioning strategy may require significant management attention and operational focus, and we may encounter unforeseen challenges, delays, or costs in implementing our plans. There can be no assurance that our strategic initiatives will generate anticipated returns, enhance stockholder value, or improve our financial performance. If we are unable to successfully execute our repositioning strategy, our business, financial condition, results of operations, and the market price of our common stock could be adversely affected.
We are seeking to maximize stockholder value by exploring strategic alternatives. There can be no assurance that we will be successful in executing a strategic transaction.
We are actively considering strategic alternatives in an effort to unlock and maximize stockholder value. We may not be able to identify or consummate a suitable transaction and do not currently have any commitments relating to any transactions. We may not be able to successfully implement a strategic transaction we pursue, and even if we determine to pursue one or more strategic transactions, we may be unable to do so on acceptable financial terms and any such transaction may not improve the market price of our common stock. Pursuing a strategic opportunity is subject to risks, including those outlined herein, and if we are unsuccessful in consummating a strategic transaction, our business could be materially adversely affected.
Our ability to dispose of certain of our legacy real estate assets on favorable terms is subject to real estate market conditions, capital markets availability, buyer demand, interest rate levels, and other factors beyond our control.
As part of our strategic repositioning, we intend to continue monetizing certain legacy real estate assets. Our ability to dispose of these properties on favorable terms is subject to real estate market conditions, capital markets availability, buyer demand, interest rate levels, and other factors beyond our control.
We may be unable to sell properties at or above their carrying values, which could result in impairment charges or realized losses. In addition, the timing of dispositions may be delayed due to market conditions or transaction complexities, which could reduce our ability to redeploy capital in a timely manner. During the disposition process, properties may experience leasing challenges, increased operating costs, or deferred capital expenditures, which could adversely affect their value.
Furthermore, as properties are sold, we will reduce or eliminate the recurring rental income associated with those assets. If we are unable to replace that income with earnings from treasury investments, fee-based activities, or other strategic initiatives on a timely basis, our revenues and cash flows may decline during the transition period.
We intend to remain a publicly traded company following our strategic transition, which requires us to continue to incur substantial general and administrative expenses
We intend to remain a publicly traded company following our strategic transition, which requires us to continue to incur substantial general and administrative expenses, including costs associated with SEC reporting, internal controls, audit and legal fees, NASDAQ listing requirements, director and officer insurance, and other governance-related expenses.
As we monetize real estate assets and reposition our business, our recurring rental revenues may decline before new income streams from treasury investments, fee-based businesses, or strategic transactions are fully developed. During this transition period, our fixed public company costs may represent a higher percentage of revenue, which could result in operating losses or reduced profitability. If we are unable to align our cost structure with our evolving revenue base, our financial condition and results of operations could be adversely affected.
Our obligations to pay income taxes may increase beginning in 2026, which will result in a reduction to our earnings, and could have negative consequences to us.
We revoked our REIT election and become a taxable corporation effective January 1, 2026, which will result in a higher provision for federal and state income taxes, which could impair our ability to satisfy our financial obligations and negatively impact the price of our securities. Further, federal and state income tax rates could increase in the future, exacerbating these risks. We can provide no assurance that federal or state income tax rates will not increase in the future.
We may fail to realize the anticipated benefits of revoking our REIT election and becoming a taxable corporation effective January 1, 2026, or those benefits may take longer to realize than expected, if at all, or may not offset the costs of revoking our REIT election and becoming a taxable corporation.
We believe that revoking our REIT election and becoming a taxable corporation will, among other things, provide us with greater flexibility to invest in non-real estate assets, have concentrated ownership, and use our free cash flows as we will no longer be required to operate under the REIT rules. However, we may not find non-real estate assets worth investing in or the amount of our free cash flows may not meet our expectations, which may reduce, or eliminate, the anticipated benefits of the transition from a REIT to a taxable corporation. Our failure to achieve the anticipated benefits of the transition from a REIT to a taxable corporation at all, or in a timely manner, or a failure of any benefits realized to offset its costs, could negatively affect our business, financial condition, results of operations or the market price of our common stock.
Our revocation of our REIT election will change the tax treatment of our dividends.
Distributions by a REIT are generally taxable to stockholders as ordinary income (subject to certain deductions available to non-corporate taxpayers), whereas distributions by a C-corporation are generally treated as dividends taxable at applicable qualified dividend rates to the extent of current or accumulated earnings and profits. In addition, we will become subject to corporate-level federal and state income taxes on our taxable income, which may reduce the amount of cash available for reinvestment or distribution.
The change in tax status may affect the after-tax return profile of an investment in our common stock for certain stockholders, including those that previously invested in us specifically for REIT-related tax characteristics. The transition may also result in taxable events to stockholders depending on their individual circumstances. Any such changes could influence investor demand for our shares and affect the trading price of our common stock. Stockholders should consult their own tax advisors regarding the consequences of the revocation of our REIT election.
We may not be able to fully utilize our NOL and NCL carryforwards, which could adversely affect our results of operations.
We record an asset for the future tax benefits from unused U.S. federal and state net operating losses (“NOLs”) and net capital losses (“NCLs”). Federal and state taxing bodies often place limitations on NOL and NCL carryforward benefits. As a result, we may not be able to utilize our NOLs or NCLs.
In general, under Sections 382 and 383 of the Code, a corporation that undergoes an ownership change is subject to limitations on its ability to utilize its pre-change NOLs and NCLs to offset future taxable income and net capital gain income. An “ownership change” occurs if 5% shareholders increase their collective ownership of the aggregate amount of the outstanding shares of our company by more than 50 percentage points looking back over the relevant testing period. The determination of whether an ownership change has occurred or will occur is complicated and depends on changes in percentage stock ownership among shareholders. Based on our knowledge of our stock ownership, we do not believe that an ownership change has occurred since our losses were generated. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Sections 382 and 383 of the Code. As a result, no assurance can be provided as to whether an ownership change has occurred or will occur in the future.
In addition, there is also a risk that a future statutory or regulatory changes could limit our ability to offset future income tax liabilities with NOLs or NCLs. For these reasons, we may not be able to utilize a material portion of our NOLs and NCLs, which could potentially result in increased future tax liabilities to us and could adversely affect our results of operations.
Preserving the ability to use our NOLs and NCLs may cause us to forgo otherwise attractive opportunities.
Limitations imposed by Sections 382 and 383 of the Internal Revenue Code may discourage us from, among other things, repurchasing our stock or issuing additional stock to raise capital or to acquire businesses or assets. Accordingly, our desire to preserve our NOLs and NCLs may cause us to forgo otherwise attractive opportunities.
Our strategic transition could impact market perception of our publicly traded stock.
Our transition from an equity REIT to a DST Program and capital allocation–focused public company represents a significant shift in our business model and investment profile. Investors may have difficulty evaluating our company during this transition period, particularly as we monetize legacy real estate assets, deploy capital into treasury and other short-duration investments, develop fee-based businesses such as our DST platform, and evaluate potential strategic transactions. Our financial results during this period may be less predictable and may not be comparable to our historical operating results as a REIT.
In addition, certain investors that focus on REITs or income-oriented investments may choose to reduce or eliminate their holdings following our revocation of REIT status. Changes in our stockholder base, uncertainty regarding the timing and execution of our strategic initiatives, or differing views regarding our long-term capital allocation strategy could result in increased volatility in the trading price of our common stock. If the market does not perceive our strategic transition as value-enhancing, our stock price and access to capital could be adversely affected.
Risks Related to our Capital Allocation and Investment Strategy
We may be unable to execute our strategic framework, which contemplates the potential acquisition of operating businesses, investment platforms, or other assets that we believe may enhance stockholder value.
The success of our acquisition strategy that contemplates the potential acquisition of operating businesses or other assets depends on our ability to identify suitable targets, negotiate favorable terms, complete transactions efficiently, and integrate acquired operations effectively.
We may be unable to identify attractive acquisition opportunities, particularly in competitive markets. If we do pursue acquisitions, we may face risks of overpaying for assets, misjudging growth prospects, underestimating liabilities, or failing to realize anticipated synergies or returns. Acquisitions may also require the issuance of equity or the use of cash resources, which could dilute existing stockholders or reduce our liquidity.
In addition, we may seek to enter industries or business lines outside of our historical real estate operating experience. Expansion into new sectors may expose us to unfamiliar regulatory environments, operational risks, competitive dynamics, and market cycles. We may lack the expertise necessary to manage such businesses effectively, which could result in underperformance or losses.
Integration of acquired businesses may require substantial management attention and may involve the consolidation of systems, controls, personnel, and corporate cultures. If we are unable to successfully integrate acquired operations or if anticipated benefits do not materialize, our business, financial condition, and results of operations could be adversely affected.
We may experience market risk associated with our treasury and investment portfolio.
As part of our strategic repositioning, we may allocate a portion of our capital to U.S. Treasury securities, short-duration fixed-income instruments, and other investment-grade securities in order to preserve liquidity and generate income. These investments are subject to market risks, including interest rate risk, reinvestment risk, and market value fluctuations.
Although short-duration securities are generally less sensitive to interest rate changes than longer-term instruments, increases in interest rates may reduce the market value of our fixed-income holdings. Conversely, if interest rates decline, the income generated from maturing securities may be reinvested at lower yields, which could reduce future interest income. In addition, credit spread movements and changes in overall market conditions may affect the market value and liquidity of investment-grade securities.
Fluctuations in the fair value of our investment portfolio could impact our reported financial results, particularly if such investments are classified as available-for-sale or otherwise marked to market. While we intend to manage our investment portfolio conservatively, there can be no assurance that our treasury strategy will achieve its intended objectives or protect us from market volatility.
We may not be able to deploy our cash balances effectively, and holding significant cash reserves may adversely affect our financial performance and stockholder returns.
During our strategic transition, we may hold significant amounts of cash, cash equivalents, or short-term investments while evaluating strategic opportunities. While this approach is intended to preserve flexibility and maintain balance sheet strength, it may reduce our overall returns if suitable acquisition or investment opportunities are not identified or executed in a timely manner.
Holding substantial liquid assets may result in lower yields compared to alternative investments, particularly in periods of declining interest rates. In addition, a conservative capital posture may create opportunity costs if market conditions present attractive investment opportunities that we are unable or unwilling to pursue. If we are unable to deploy capital in a manner that generates returns exceeding our cost of capital and operating expenses, our financial performance and stockholder returns may be adversely affected.
Our success is dependent on our ability to make additional Investmentsinvestments consistent with our investment goals.
We cannot provide prospective investors with any specific information as to the types, identification, location, operating histories, lease terms or other relevant economic and financial data regarding any Investmentsinvestments that we may make in the future. Our success is dependent on our ability to make Investmentsinvestments consistent with our investment goals, and a failure to do so is likely to materially and adversely affect returns to our stockholders.
Restrictions in a tenants in common agreement related to the Parkway Property may adversely impact our investment in that property.
Our investment policies and strategies are very broad and permit us to invest in any type of commercial real estate, including developed and undeveloped properties, entities owning these assets or other real estate assets regardless of geographic location or property type.unrestrictive. Our board of directorsBoard has absolute discretion in implementing these policies and strategies, subject to the restrictions on investment objectives and policies set forth in our articles of incorporation. Because you cannot evaluate our investments, an investment in our common stock may entail more risk than other types of companies. This additional risk may hinder your ability to achieve your own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.
Our future growth will depend upon our ability to acquireraise additional capital and leasemake propertiesinvestments in a competitive real estate business and to raise additional capital.environment.
Management's Discussion & Analysis (MD&A)
New heading “2025 Highlights”
New heading “Sales of Investment Properties”
New heading “Acquisition of the Tesla Pensacola Property”
New heading “Farmers Line of Credit”
New heading “Commencement of DST Sponsorship Program”
New heading “Tesla DST Mortgage and Interest Rate Swap”
New heading “Subsequent Events”
New heading “Termination of REIT Election”
New heading “Sale of Parkway Property”
New heading “Sale of Beneficial Interests in the XXV DST”
New heading “Factors That May Influence our Results of Operations”
New heading “Economic Conditions”
New heading “Potential Impact of Tariffs and Trade Restrictions on Tenants and our Business”
New heading “Adjusted Net Operating Income”
New heading “Retail Center Property Revenues and Adjusted Net Operating Income”
New heading “Flex Center Property Revenues and Adjusted Net Operating Income”
New heading “STNL Property Revenues and Adjusted Net Operating Income”
New heading “Other Non-GAAP Measures”
Removed heading “Recent Trends and Activities”
Removed heading “Private Placement of Common Shares”
Removed heading “Redemption of Mandatorily Redeemable Preferred Stock”
Removed heading “Private Placement of Operating Partnership Units”
Removed heading “Reverse 1-for-10 Stock Split and Forward 5-for-1 Stock Split”
Removed heading “Acquisition of the Citibank Property”
Removed heading “Acquisition of the 16% Noncontrolling Interest in the Hanover Square Outparcel”
Removed heading “Common stock grants under the 2018 Equity Incentive Plan”
Removed heading “Off-Balance Sheet Arrangements”
Largest changes
“Macroeconomic conditions, including inflation, elevated interest rates, economic slowdowns, recessionary pressures, and financial market volatility, may adversely affect our business, our tenants, the value of our real estate assets, the performance of our short-term and other investments, and our ability to identify and execute strategic investment opportunities. Rising interest rates may increase borrowing costs, reduce asset valuations, and alter the relative attractiveness of alternative investment options. …”see in full comparison
“Changes in international trade policies, including the imposition of tariffs, duties, import taxes, or other trade restrictions by the United States government or foreign governments, could adversely impact the operations of our retail tenants. Our tenants could source a substantial portion of their merchandise, raw materials, or manufacturing services from foreign countries. The imposition of new or increased tariffs on these goods, or retaliatory measures from trading partners, could increase costs for these tenants, potentially reducing their profitability and operational flexibility. …”see in full comparison
“Potential Impact of Tariffs and Trade Restrictions on Tenants and our Business”see in full comparison
“Operating income for the year ended December 31, 2024 was $3,731,593, an increase of $4,728,757 from the operating loss of $997,164 for the year ended December 31, 2023. …”see in full comparison
Cash flows from operating activities has two components. The first component consists of net operatingsee in full comparisonincome(loss) income adjusted for non-cash operating activities. During the year ended December 31, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $2,259,840. During the year ended December 31, 2024, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $2,317,671.DuringThethe year ended December 31, 2023, operating activities adjusted for non-cash items resulted in net cash provided in operating activitiesdecrease of$229,141. The increase of $2,088,530$57,831 in cash flows from operating activities for the year ended December 31,20242025 was primarily the result ofthe management restructuring expenses of $2,066,521 incurred during the year ended December 31, 2023 related to the Termination Agreement. No such management restructuring expenses were incurred during the year ended December 31, 2024. Reduced netdecreased operating incomefrom our investment propertiesresulting fromtheincreasedsalelegal,of the Hanover Square Property on March 13, 2024accounting andincreasedother professional fees, corporate general and administrativeexpensesexpenses,wereimpairment of assets held for sale, offset byreduceddecreased depreciation and amortization and interestexpense from the sale of the Hanover Square Property.expense.
Full comparison: every changed paragraph (146)
The following discussion and analysis is based on, and should be read in conjunction with, the consolidated financial statements and the related notes thereto of Medalist Diversified REIT,Diversified, Inc. contained in this Annual Report.
Company Overview
Medalist Diversified REITDiversified, Inc. is a Maryland corporation formed on September 28, 2015. Beginning with our taxable year ended December 31, 2017,2017 through our taxable year ended December 31, 2025, we believe that we have operated in a manner qualifying us as a real estate investment trust (“REIT”), and we have elected to be taxed as a REIT for federal income tax purposes.purposes Ourfor companythose taxable years. We revoked our REIT election effective January 1, 2026. Medalist Diversified, Inc. serves as the general partner of Medalist Diversified Holdings, LP which was formed as a Delaware limited partnership on September 29, 2015. On March 2, 2026, we changed our name from Medalist Diversified REIT, Inc. to Medalist Diversified, Inc. in connection with our revocation of our REIT status.
In connection with the revocation of our REIT status, we are transitioning our primary focus to building our DST Program to generate fee income and increase assets under management. We continue to evaluate direct and indirect real estate investments that support our DST Program, including opportunities within our existing portfolio, including selective disposition of our properties from our legacy portfolio to generate capital for our DST Program. Our efforts to scale our DST Program will be focused on identifying real estate investments suitable for DST vehicles that offer competitive, risk-adjusted returns. We plan to focus on net lease assets with nationally recognized tenants or those with investment grade credit ratings, in larger metropolitan areas experiencing high levels of growth in the southeast, mountain states, and California. Industry focuses will include, but not be limited to, retail, medical, and single tenant industrial and warehouse uses.
We may also pursue, in an opportunistic manner, non-real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, indirect investments in real property, such as those that may be obtained in a joint venture, and ownership of crypto assets, other equity investments, including marketable securities, short-duration U.S. treasuries, and other investment-grade marketable securities. Our Board and management believe that our company’s current focus on unlocking its potential value and increasing assets under management and fee income through our DST Program provides an attractive balance of risk and returns and aligns with a measured approach to raising growth capital. We may revise these investment strategies without the approval of our stockholders.
As of December 31, 2025, our legacy portfolio consisted of the following properties:
Our company was formed to acquire, reposition, renovate, lease and manage income-producing properties. Our current primary focus is on (i) managing our legacy portfolio consisting of retail and flex-industrial properties in secondary and tertiary markets in Virginia, North Carolina, and South Carolina, and (ii) managing and expanding our STNL property portfolio in geographic markets across the United States. We may also pursue, in an opportunistic manner, other real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, and indirect investments in real property, such as those that may be obtained in a joint venture. While these types of investments are not intended to be a primary focus, we may make such investments in our discretion.
As of December 31, 2024, we owned four retail properties, three flex properties and three STNL properties. As of December 31, 2024, our retail center properties consisted of (i) the Shops at Franklin Square, a 134,239 square foot retail property located in Gastonia, North Carolina (the “Franklin Square Property”), (ii) the Ashley Plaza Shopping Center, a 156,012 square foot retail property located in Goldsboro, North Carolina (the “Ashley Plaza Property”), (iii) the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), and (iv) the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”). On March 13, 2024, our company, and its tenant in common partner, sold the Shops at Hanover Square North, a 73,440 square foot retail property located in Mechanicsville, Virginia (the “Hanover Square Shopping Center Property”). Our company owned 84% of the Hanover Square Shopping Center Property as a tenant in common with a noncontrolling owner which owned the remaining 16% interest. Our company and its tenant in common partner retained ownership of the 0.86 acre outparcel (the “Hanover Square Outparcel”). On March 25, 2024, our company purchased its tenant in common partner’s 16% interest in the Hanover Square Outparcel (see Note 3 of the accompanying notes to the condensed consolidated financial statements).
As of December 31, 2024, our three flex properties consisted of (i) Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), (ii) the Greenbrier Business Center, an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property”), and (iii) the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the “Parkway Property”), in which our company owns an 82% tenant in common interest with a noncontrolling owner which owns the remaining 18% interest.
As of December 31, 2024, our three STNL properties consisted of (i) the Citibank Property, a 4,350 square foot single tenant building on 0.45 acres located in Chicago, Illinois, (ii) the East Coast Wings building, a 5,000 square foot single tenant building on approximately 0.89 acres located in Goldsboro, North Carolina (the “East Coast Wings Property”), and (iii) the T-Mobile building, a 3,000 square foot single tenant building on approximately 0.78 acres located in Goldsboro, North Carolina (the “T-Mobile Property”). The East Coast Wings Property and the T-Mobile Property are both located on outparcels adjacent to our company’s Ashley Plaza Property. Prior to January 1, 2024, our company included the East Coast Wings Property and the T-Mobile Property as part of the Ashley Plaza Property.
As of December 31, 2024,2025, our company also owned threetwo undeveloped parcels which are currently being marketed for use as STNL properties including (i) an outparcel at our Lancer Center Property consisting of approximately 1.80 acres (the “Lancer Outparcel”), (ii) an outparcel at our Salisbury Marketplace Property consisting of approximately 1.20 acres (the “Salisbury Outparcel”) (the exact size of the Lancer Outparcel and Salisbury Outparcel will not be determined until a user is identified), and (iiiii) the Hanover Square Outparcel consisting of 0.86 acres located adjacent to the Hanover Square Shopping Center.
As of December 31, 2025, the Greenbrier Business Center and Parkway Properties were classified as assets held for sale on our consolidated balance sheet. On February 13, 2026 we closed on the sale of the Greenbrier Business Center Property and on February 27, 2026 we closed on the sale of the Parkway Property. On February 3, 2026, we entered into a purchase and sale agreement to sell the Franklin Square Property. The funds generated from the sales of the Greenbrier Business Center and Parkway Properties, and the Franklin Square Property, if we are successful in completing its sale, will be used to implement our strategy, outlined above.
For all periods prior to July 18, 2023, our company was externally managed by the Manager. On July 18, 2023, our company entered into a termination agreement with the Manager and William R. Elliott and Thomas E. Messier (the “Termination Agreement”), which provided for the immediate termination of the Management Agreement. Until the termination of the Management Agreement, the Manager made all investment decisions for our company. The Manager oversaw our company’s overall business and affairs and had broad discretion to make operating decisions on behalf of our company and to make investment decisions. Since the termination of the Management Agreement, and for the full year ended December 31, 2024, our company has been managed internally as directed by the Board. Our company’s stockholders are not involved in its day-to-day affairs.
2025 Highlights
Sales of Investment Properties
On October 23, 2025, we sold the Salisbury Marketplace Property to an unrelated third party for a sale price of $9,930,000, resulting in a gain on disposal of investment properties of $841,278 reported on our company’s consolidated statement of operations for the year ended December 31, 2025.
On December 30, 2025, we sold the Buffalo Wild Wings and United Rentals Properties to an unrelated third party for a sale price of $2,507,500 and $2,792,000, respectively, resulting in a loss on disposal of investment properties of $52,760 and $57,079, respectively, reported on our company’s consolidated statement of operations for the year ended December 31, 2025.
Acquisition of the Tesla Pensacola Property
On July 18, 2025, we, through a wholly-owned subsidiary, completed the acquisition of a Tesla service, sales and delivery facility consisting of a 45,461 square foot, single story building on 3.498 acres of land located at 312 E. 9 Mile Road, Pensacola, Florida (the “Tesla Pensacola Property”). The total purchase price paid for the Tesla Pensacola Property was $14,544,504 and was purchased from an unaffiliated seller. The acquisition was funded using a line of credit from Farmers and Merchants Bank of Long Beach in the amount of $14,700,000 (the “Farmers Line of Credit”).
Farmers Line of Credit
On July 18, 2025, in connection with the completion of the acquisition of the Tesla Pensacola Property discussed above, we, , through our wholly-owned subsidiaries, entered into a loan agreement with Farmers and Merchants Bank of Long Beach (“Farmers”), for the Farmers Line of Credit in the maximum amount of $14,700,000. The Farmers Line of Credit was cross collateralized by the Tesla Pensacola Property, the Citibank Property, the Buffalo Wild Wings Property, and the United Rentals. Amounts outstanding under the Farmers Line of Credit bear interest at a floating rate pegged to the prime rate announced by Farmers.
On November 7, 2025, in connection with our contribution of the Tesla Pensacola Property to the XXV DST, we repaid $7,350,000 of the Farmers Line of Credit and Farmers released its lien on the Tesla Pensacola Property. During November and December 2025, we made additional principal payments of $2,000,000 and $948,997, respectively. On December 30, 2025, we used $4,401,003 from the proceeds of the sale of the Buffalo Wild Wings and United Rentals Properties to complete the repayment of the Farmers Line of Credit.
The Farmers Line of Credit was unconditionally guaranteed by us and our Operating Partnership, had a one-year term, maturing on August 10, 2026. Balances outstanding on the Farmers Line of Credit were recorded as liabilities associated with assets held for sale on our consolidated balance sheets. As of December 31, 2025 and 2024, respectively, the balance of the Farmers Line of Credit was $0.
Commencement of DST Sponsorship Program
On November 7, 2025, we completed the contribution of the Tesla Pensacola Property to the XXV DST. Following the contribution, we launched a program to raise capital, through the Operating Partnership, through private placement offerings exempt from registration under the Securities Act, by selling beneficial interests (the “DST Interests”) in specific DSTs holding real properties (the “DST Program”). We expect that the DST Program will provide us with the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for investors who may be seeking like-kind replacement properties to complete tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, reduce our borrowings, repay indebtedness, and for other corporate purposes. In addition, we expect to generate fee-based income, such as acquisition fees, asset management fees, disposition fees, and financing coordination fees, among others, from the DST Program. However, there can be no assurance that we will be successful in our efforts to sell the DST Interests or to generate fee-based income.
Tesla DST Mortgage and Interest Rate Swap
On November 7, 2025, in connection with the contribution of the Tesla Pensacola Property to the XXV DST discussed above, the XXV DST entered into the Telsa DST Mortgage with Pinnacle Bank for a principal amount of $7,710,000. The Tesla DST Mortgage is collateralized by the Tesla Pensacola Property. Amounts outstanding under the Tesla DST Mortgage bear interest at a floating rate of one month SOFR plus 2.5%. As of December 31, 2025 and 2024, SOFR was 3.69% and 4.33%, respectively. The Tesla DST Mortgage provides for monthly interest only payments and has a five-year term and matures on November 7, 2030. The XXV DST received $6,932,061 in net proceeds which was used to fund a portion of the total consideration associated with our contribution of the Tesla Pensacola Property to the XXV DST. We used these proceeds, and cash on hand, to make a $7,350,000 principal repayment on the Farmers Line of Credit.
In connection with the Tesla DST Mortgage, our Operating Partnership agreed to provide a limited guaranty (the “Guaranty”) with respect to certain potential costs, expenses, losses, damages and other sums for which the XXV DST is directly liable under the Tesla DST Mortgage, including losses or damages that may result from certain intentional actions committed by the XXV DST in violation of the Tesla DST Mortgage. Our Operating Partnership also provide a guaranty of the principal balance and any interest or other sums outstanding under the Tesla DST Mortgage in the event of certain bankruptcy or insolvency proceedings involving the XXV DST.
Concurrent with the Pinnacle Loan closing, the XXV DST entered into an interest rate swap agreement with Pinnacle Bank (the “Swap”) to fix the interest rate at 5%. The Swap has a $7,710,000 notional amount and provides for the XXV DST to make monthly payments to Pinnacle Bank based on a fixed 5% rate and for Pinnacle Bank to make monthly payments to the XXV DST based on a variable amount of one month SOFR plus 2.5%. The XXV DST paid a premium of $417,136 to secure the 5% fixed rate. The Swap matures concurrently with the maturity of the Tesla DST Mortgage, or November 7, 2030. We have not designated the Swap as a hedge and consequently hedge accounting will not apply.
Recent Trends and Activities
On February 21, 2025, our company,we, through a wholly-owned subsidiary, completed itsour acquisition of the United Rentals Property, a 7,5007,529 square foot single tenant building located on 3.0 acres located in Huntsville, Alabama. The United Rentals Property, built in 2010, is 100% leased to United Rentals Realty, LLC. The purchase price for the United Rentals Property was $3,145,000 paid through the issuance of 251,600 OP Units at a price of $12.50 per OP Unit. Our company’s total investment was $3,187,446. Our companyWe incurred $42,446 of closing costs which were capitalized and added to the tangible assets acquired. The seller of the United Rentals Property was Dionysus Investments, LLC, a company whose manager is Fort Ashford Funds, LLC,LLC. whoseFort managerAshford Funds, LLC is managed by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. The purchase price was determined by an independent, third-party appraisal obtained by our company. Pursuant to our company’s Related Person Transaction Policy (the “Related Person Transaction Policy”), our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.
On January 24, 2024,2025, our company, through a wholly-owned subsidiary,we completed its acquisition of the Buffalo Wild Wings Property, a 6,4005,933 square foot single tenant building located on 1.82 acres located in Bowling Green, Kentucky.Kentucky, through a wholly-owned subsidiary, from CWS BET Seattle, LP. The general partner of CWS BET Seattle, LP is Fort Ashford Funds, LLC, a California limited liability company controlled and owned by Frank Kavanaugh, our Company’s President and Chief Executive Officer and the Chairman of the Board. The Buffalo Wild Wings Property, built in 1993 and subsequently renovated in 2018, iswas 100% leased to Buffalo Wild Wings,Wings LLC.as of December 31, 2025. The purchase price for the Buffalo Wild Wings Property was $2,620,000 paid through the issuance of 206,900209,600 OP Units at a price of $12.50 per OP Unit. OurThe company’spurchase total investmentprice was $2,667,430.determined Ourby companyan incurredindependent, $47,430third-party ofappraisal closingobtained costs which were capitalized and added toby the tangible assets acquired. The seller of the Buffalo Wild Wings Property was CWS BET Seattle L.P. LLC, a company controlled and owned by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board.Company. Pursuant to the Related Person Transaction Policy, ourthe Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction. Our total investment was $2,667,429. We incurred $47,429 of closing costs which were capitalized and added to the tangible assets acquired.
Subsequent Events
As of the date of this Annual Report on Form 10-K, the following events have occurred subsequent to the December 31, 2025 effective date of the consolidated financial statements:
Private Placement of Common Shares
On December 13, 2024, our company entered into a series of subscription agreements with certain investors, including our company’s Chief Financial Officer and two directors, for the issuance and sale of 230,000 Common Shares, in a private placement (the “Private Placement”), at a purchase price of $12.50 per share for total consideration of $2,875,000. The Private Placement was exempt from the registration requirements of the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Rule 506(b) under Regulation D of the Securities Act.
Redemption of Mandatorily Redeemable Preferred Stock
On November 25, 2024, our company completed a partial redemption of 140,000 shares of its mandatorily redeemable preferred stock. The redemption price was $25.00 per share, plus $0.05 per share of accrued dividends. Our company used proceeds from the private placement of OP Units (see below) and cash on hand to fund the $3,527,160 for the partial redemption and accrued dividends. On January 10, 2025, our company completed the final redemption of the remaining 60,000 shares of its mandatorily redeemable preferred stock. The redemption price was $25.00 per share, plus $0.44 per share of accrued dividends. Our company used proceeds from the private placement of common shares to fund the $1,526,500 for the final redemption and accrued dividends.
Private Placement of Operating Partnership Units
On October 11, 2024, our company’s operating partnership entered into a subscription agreement with Francis P. Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board, for the sale by the Operating Partnership in a private placement of 160,000 units of partnership interest in the Operating Partnership at a purchase price of $12.50 per unit for total consideration of $2,000,000.
Reverse 1-for-10 Stock Split and Forward 5-for-1 Stock Split
On July 2, 2024, our company completed a reverse stock split of its Common Shares, and a corresponding adjustment to the outstanding common units of the Operating Partnership, at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split took effect at 5:00 p.m. Eastern Time on July 2, 2024 (the “Effective Time”) and automatically converted every ten Common Shares outstanding at that time into one Common Share. The Reverse Stock Split was intended to lower certain recordkeeping and compliance costs by reducing the number of stockholders who held less than 10 shares and to enable our company’s small stockholders (those holding fewer than 10 Common Shares) to liquidate their holdings in the company’s Common Shares without incurring brokerage commissions. On July 3, 2024, immediately following the Reverse Stock Split, our company completed a forward stock split of our Common Shares at a ratio of 5-for-1 (the “Forward Stock Split”). The Forward Stock Split took effect at 5:01 pm Eastern Time on July 2, 2024 and automatically converted every Common Share outstanding at the time into five Common Shares. The Forward Stock Split was intended to help our company maintain compliance with Nasdaq Listing Rule 5550(a)(4) (the “Publicly Held Shares Requirement”). Collectively, the Reverse Stock Split and the Forward Stock Split are referenced herein as the “2024 Stock Splits.”
Acquisition of the Citibank Property
On March 28, 2024, our company completed its acquisition of the Citibank Property, a 4,350 square foot single tenant building on 0.45 acres located in Chicago, Illinois, through a wholly-owned subsidiary. The Citibank Property, built in 1954 and subsequently renovated, was 100% leased to Citibank, NA. The purchase price for the Citibank Property was $2,400,000 paid through the issuance of 208,695 OP Units at a price of $11.50 per Operating Partnership Unit. Our company’s total investment was $2,444,454. Our company incurred $44,454 of closing costs which were capitalized and added to the tangible assets acquired. The sole manager and member of the seller of the Citibank Property was CWS BET Seattle, LP, a company controlled and owned by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. Pursuant to the Related Person Transaction Policy, our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.
Acquisition of the 16% Noncontrolling Interest in the Hanover Square Outparcel
On March 25, 2024, our company completed the acquisition of its tenant in common partner’s 16% ownership interest in the Hanover Square Outparcel through a wholly-owned subsidiary. The purchase price for the 16% interest in the Hanover Square Outparcel was $98,411 paid in cash. Our company’s total investment was $100,891. Our company incurred $2,480 of closing costs which were capitalized and added to the tangible assets acquired.
Sale of theGreenbrier Hanover Square ShoppingBusiness Center Property
On February 13, 2026, we closed on the sale of the Greenbrier Business Center Property to an unrelated purchaser for $11,000,000 and used $7,000,000 of the proceeds to reduce the outstanding balance of the Wells Fargo Mortgage Facility.
Termination of REIT Election
On February 12, 2026, our Board authorized termination of our REIT election effective January 1, 2026.
Name Change
On February 17, 2026, we amended our Articles of Incorporation and Bylaws solely to change the corporate name from “Medalist Diversified REIT, Inc.” to “Medalist Diversified, Inc.” effective March 2, 2026.
Sale of Parkway Property
On February 27, 2026 we closed on the sale of the Parkway Property to an unrelated purchaser for $7,825,000 and used $4,735,614 of the proceeds to repay the Parkway Mortgage.
Sale of Beneficial Interests in the XXV DST
As of March 2, 2026, we have sold 17.2% of the class 1 beneficial interests in the XXV DST which has generated $1,479,670 in net proceeds.
On March 13, 2024, our company sold the Hanover Square Shopping Center Property to an unrelated third party for a sale price of $13.0 million, less credits for repairs of $85,000, resulting in a gain on disposal of investment properties of $2,819,502 reported on our Company’s condensed consolidated statement of operations for the year ended December 31, 2024. Our company did not report any gain or loss on the disposal of investment properties for the year ended December 31, 2023.
On June 13, 2022, our company, through its wholly-owned subsidiaries, entered into a loan agreement with Wells Fargo Bank, National Association for a $1,500,000 line of credit (the “Original Wells Fargo Line of Credit”). On May 2, 2023, our company and Wells Fargo Bank, National Association entered into the First Amendment to the Revolving Line of Credit Note which extended the maturity date of the Original Wells Fargo Line of Credit to June 9, 2024. On June 5, 2024, our company and Wells Fargo Bank, National Association entered into the Second Amendment to the Revolving Line of Credit Note which further extended the maturity date of the Original Wells Fargo Line of Credit to October 7, 2024. As of December 31, 2024 and December 31, 2023, the Original Wells Fargo Line of Credit had an outstanding balance of $0 and $1,000,000, respectively. Outstanding balances on the Original Wells Fargo Line of Credit bore interest at a floating rate of 2.25% above daily SOFR. As of December 31, 2024 and December 31, 2023, SOFR was 4.33% and 5.35%, respectively. The Original Wells Fargo Line of Credit was secured by the Lancer Center Property, the Greenbrier Business Center Property and the Salisbury Marketplace Property, was unconditionally guaranteed by our company, and any outstanding balances would have been due on the October 7, 2024 maturity date.
On October 2, 2024, our company, through its wholly-owned subsidiaries, entered into an amended and restated Revolving Line of Credit Note with Wells Fargo Bank, National Association that increases the line of credit from $1,500,000 to $4,000,000 (the “Expanded Wells Fargo Line of Credit”). Outstanding balances on the Expanded Wells Fargo Line of Credit will bear interest at a floating rate of 3.10% above Daily Simply SOFR, which, with respect to any day (a “SOFR Rate Day”) means a rate per annum equal to SOFR for the day that is two U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, subject to certain exceptions. A U.S. Government Securities Business Day is any day except for Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association, or any successor thereto, recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. The Expanded Wells Fargo Line of Credit is secured by the Lancer Center Property, the Greenbrier Business Center Property, the Salisbury Marketplace Property and the Citibank Property, is unconditionally guaranteed by our company, and any outstanding balances will be due on the September 30, 2026 maturity date. The terms of the Expanded Wells Fargo Line of Credit prohibit our company from using proceeds to directly or indirectly fund the redemption of our company’s mandatorily redeemable preferred stock.
Common stock grants under the 2018 Equity Incentive Plan
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Pledged Asset Line”
New heading “Six Months Ended June 30, 2026”
New heading “Adjusted Net Operating Income”
New heading “Investment Property Revenues and Adjusted Net Operating Income”
New heading “DST Sponsorship Revenues and Adjusted Net Operating Income”
New heading “Provision for Income Taxes”
Removed heading “Operating Income”
Removed heading “Net Income (Loss) before Income Taxes”
Largest changes
“Borrowings under the PAL Agreement bear interest at a variable rate based on the SOFR plus 75 basis points. As of June 30, 2026 and December 31, 2025, SOFR was 3.63% and 3.69%, respectively. …”see in full comparison
“Total operating expenses were $4,478,350 for the six months ended June 30, 2026, a decrease of $645,247 over the six months ended June 30, 2025, primarily due to decreased investment property operating expenses and depreciation and amortization expense due to the sales of the Salisbury Marketplace, Greenbrier Business Center, Parkway, Franklin Square and Citibank properties, and the transfer of the Ashley Plaza Property to assets held for sale, at which point, we ceased recording depreciation and amortization, and a decrease in share based compensation expense and corporate general and …”see in full comparison
Full comparison: every changed paragraph (83)
Our current primary focus is to implement the strategic repositioning initiated during 2025. Effective January 1, 2026, we revoked our REIT status and are transitioning our primary focus to build the DST Program to generate fee income and increase assets under management. We will continue to evaluate direct and indirect real estate investments (i) for our general portfolio and (ii) that support the DST Program, including opportunities within our existing portfolio, including selective disposition of properties from our portfolio to generate capital for the DST Program and other potential acquisitions.
Our efforts to scale the DST Program will be focused on (1) identifying real estate investments suitable for DST vehicles that offer competitive, risk-adjusted returns, with a focus on net lease assets with nationally recognized tenants or those with investment grade credit ratings, in larger metropolitan areas experiencing high levels of growth in the southeast, mountain states, and California.California, Industryin focusesindustries will include,including, but not be limited to, retail, medical, and single tenant industrial and warehouse uses.uses; (2) syndicating these investments into DSTs; and (3) offering beneficial interests in the DSTs for sale to accredited investors in private placements under Regulation D.
As of MarchJune 31,30, 2026, our portfolio consisted of the following properties:
As of MarchJune 31,30, 2026, we also owned two undeveloped parcels which are currently being marketed for sale or lease, including (i) an outparcel at our Lancer Center Property consisting of approximately 1.80 acres (the “Lancer Outparcel”), (the exact size of the Lancer Outparcel will not be determined until a user is identified), and (ii) the Hanover Square Outparcel consisting of 0.86 acres located in Mechanicsville, Virginia.
As of MarchJune 31,30, 2026, the TeslaAshley PensacolaPlaza Property was classified as assets held for sale on our condensed consolidated balance sheet. AsAdditionally, as of MarchJune 31,30, 2026, we held 73.6% ofdeconsolidated the beneficialentity ownership interests in XXV DST, which ownsowning the TeslaTelsa Pensacola Property,Property and non-affiliated owners heldremoved the remainingassociated 26.4%assets ofand theliabilities beneficialfrom ownershipour interestscondensed inconsolidated XXVbalance DST.sheets.
Prior to January 1, 2026, we aggregated individual properties into retail, flex and STNL operating segments. Effective on January 1, 2026, following our strategic repositioning and increased focus on DST sponsorship activities, our CODM began evaluating the Company’sour real estate portfolio on a combined basis as a single, “Investment Properties” segment. Additionally, as of January 1, 2026, we established a second operating segment for our DST sponsorship activities. These two segments align with how our CODM evaluates performance and allocates resources.
On February 13, 2026, we sold the Greenbrier Business Center Property to an unrelated third party for a sale price of $11,000,000 and used $7,000,000 from the proceeds to repay a portion of the Wells Fargo Mortgage Facility. The sale of the Greenbrier Business Center Property resulted in a gain on disposal of investment properties of $4,228,612$4,213,586 reported on our condensed consolidated statement of operations for the threesix months ended MarchJune 31,30, 2026.
On February 27, 2026, we sold the Parkway Property to an unrelated third party for a sale price of $7,825,000 and used $4,735,614 from the proceeds to repay the Parkway Mortgage. The sale of the Parkway Property resulted in a gain on disposal of investment properties of $1,040,870 reported on our condensed consolidated statement of operations for the threesix months ended MarchJune 31,30, 2026.
On March 30, 2026, we sold the Franklin Square Property to an unrelated third party for a sale price of $24,100,000 and used $12,954,175 from the proceeds to repay the Franklin Square Mortgage. The sale of the Franklin Square Property resulted in a gain on disposal of investment properties of $7,580,745 reported on our condensed consolidated statement of operations for the threesix months ended MarchJune 31,30, 2026.
On June 24, 2026, we sold the Citibank Property to an unrelated third party for a sale price of $2,150,000. The sale of the Citibank property resulted in a loss on disposal of investment properties of $50,181.
We have historically financed acquisitions of our investment properties through mortgages. The following table is presented as of MarchJune 31,30, 2026.
On October 23, 2025 and February 13, 2026, respectively, we sold the Salisbury Marketplace and Greenbrier Business Center Properties, respectively and used $5,145,479 and $7,000,000, respectfully, of the net proceeds of the sales to reduce the principal balance of the Wells Fargo Mortgage Facility in exchange for Wells Fargo releasing its security interest in the respective properties. As of December 31, 2025 the portion of the Wells Fargo Mortgage Facility allocated to the Greenbrier Business Center Property was included in mortgages payable, net, associated with assets held for sale on our condensed consolidated balance sheet. As of MarchJune 31,30, 2026, the monthly payment is $30,000 and the remaining outstanding balance of the Wells Fargo Mortgage Facility is secured by the Lancer Center Property.
We financed acquisitions of our assets held for sale through mortgages, which as of MarchJune 31,30, 2026, are recorded as mortgages payable, net, associated with assets held for sale, on our consolidated balance sheets, as follows:
Pledged Asset Line
We entered into a Pledged Asset Line Agreement (the “PAL Agreement”) with Charles Schwab & Co., Inc. (“Schwab”). The PAL Agreement provides for a revolving, non-purpose margin credit facility, secured by a first-priority lien on our brokerage account maintained at Schwab (the “Collateral Account”), of an amount based on the collateral value in the Collateral Account. We hold marketable securities in the Collateral Account. Based on the collateral value in the Collateral Account as of June 30, 2026, we are permitted to borrow up to approximately $16.5 million under the PAL Agreement.
Borrowings under the PAL Agreement bear interest at a variable rate based on the SOFR plus 75 basis points. As of June 30, 2026 and December 31, 2025, SOFR was 3.63% and 3.69%, respectively. The PAL Agreement contains customary events of default, including, without limitation, failure to make any payment upon demand or otherwise when due or deposit additional collateral when required under the PAL Agreement; initiation of a bankruptcy petition or other insolvency proceeding; any event of default under any security agreement executed in connection with the Collateral Account; or the insufficiency of the value of the financial assets in the Collateral Account.
As of June 30, 2026 and December 31, 2025, the outstanding balance on the PAL Agreement was $0.
Principal components of our total revenues for ourOur investment property revenues include base rents and tenant reimbursements. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Certain lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent) which we recognize when the tenants achieve the specified targets as defined in their lease agreements. We periodically review the valuation of the asset/liability resulting from the straight-line accounting treatment of our leases in light of any changes in lease terms, financial condition or other factors concerning our tenants.
DST Sponsorship revenues consist of acquisition fees, asset management fees, disposition fees, cost reimbursement fees and other fees from the Company’s DST Program. Acquisition fees and cost reimbursement fees are generally recognized upon the completion of the sale of the beneficial interests in a DST. Asset management fees are recognized monthly as the related services are provided. Disposition fees are generally recognized upon the sale of the underlying DST property, when our company’s performance obligations have been satisfied, and are generally subordinated to the DST investors' return of capital.
Our business model is intended to drive growth through acquisitions and increasing assets under management. Our primary liquidity needs are funding for (1) operations, including operating expenses, corporate and administrative costs, payment of principal of, and interest on, outstanding indebtedness, and escrow and reserve payments associated with long-term debt financing for our properties; (2) investing needs, including property acquisitions for our portfolio and for our DST Program, and recurring capital expenditures; and (3) financing needs, including cash dividends and debt repayments.
At MarchJune 31,30, 2026, our consolidated cash and restricted cash on hand totaled $9,435,265$7,427,773 compared to consolidated cash on hand of $4,134,070 at December 31, 2025. Cash from operating activities, investing activities and financing activities for the threesix months ended MarchJune 31,30, 2026 are as follows:
During the threesix months ended MarchJune 31,30, 2026, our cash used in operating activities was $508,353$187,396 compared to cash provided by operating activities of $459,972$704,098 for the threesix months ended MarchJune 31,30, 2025, a decrease in cash provided by operating activities of $968,325.$891,494.
Cash flows from operating activities has two components. The first component consists of net operating income (loss) income adjusted for non-cash operating activities. During the threesix months ended MarchJune 31,30, 2026, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $318,580.$88,374. During the threesix months ended MarchJune 31,30, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $389,549.$950,746. The decrease of $708,129$862,372 in cash flows from operating activities adjusted for non-cash items for the threesix months ended MarchJune 31,30, 2026 was primarily from reduced leasenet terminationoperating fees,income from our investment properties and increased loss on extinguishment of debt and impairment of assets held for sale, net of unrealized gains on marketable securities, gains on disposal of investment properties, the income tax expense,benefit and an increase inthe DST sponsorship programrevenues expenses.recognized on deconsolidation.
The second component consists of changes in assets and liabilities. Increases in assets and decreases in liabilities result in cash used in operations. Decreases in assets and increases in liabilities result in cash provided by operations. During the threesix months ended MarchJune 31,30, 2026, net changes in asset and liability accounts resulted in $189,773$275,770 in cash used in operations. During the threesix months ended MarchJune 31,30, 2025, net changes in asset and liability accounts resulted in $70,423$246,648 in cash provided byused operations. This increase of $260,196$29,122 in cash used in operations resulting from changes in assets and liabilities is a result of decreasedincreased changes in rent and other receivables, net, of $15,789,$93,889 and other assets of $159,182, net of decreased changes in otherunbilled assetsrent of $301,593,$78,237 and increased changes in accounts payable and accrued liabilities of $30,413, all of which are uses of cash, offset by decreased changes in unbilled rent of $26,773, which provided cash.$203,956.
The total of (i) the $708,129$862,372 decrease in cash flows from operations from the first category and (ii) the $260,196$29,122 decrease in cash provided by operations from the second category results in a total decrease of cash provided by operations of $968,325$891,494 for the threesix months ended MarchJune 31,30, 2026.
During the threesix months ended MarchJune 31,30, 2026, our cash provided by investing activities was $4,653,138,$1,952,925, compared to cash used in investing activities of $227,464$708,098 during the threesix months ended MarchJune 31,30, 2025, an increase in cash provided by investing activities of $4,880,602.$2,661,023.
During the threesix months ended MarchJune 31,30, 2026, cash provided by investing activities consisted of $17,159,761$19,221,077 in cash received from the disposal of the Greenbrier Business Center, Parkway andParkway, Franklin Square and Citibank properties, and $3,709,847 in cash received from sales of XXV DST interests, offset by $12,185,803$20,420,257 in cash used for our investments in marketable securities, $201,077$241,077 for the purchase of crypto assets, and $119,743$359,197 in capitalized expenditures. During the threesix months ended MarchJune 31,30, 2025, cash used in investing activities consisted of $137,589$563,219 in capitalized expendituresexpenditures, $55,004 for the purchase of crypto assets, and $89,875 in investment property acquisitions for closing costs related to the Buffalo Wild Wings Property and United Rentals Property acquisitions.
The non-cash investing activity for the threesix months ended MarchJune 31,30, 2026, that did not affect our cash provided by investing activities was the transfer of $15,419,522 from investment properties, net, to assets held for sale, the transfer of $9,970 of intangible lease assets, net, to assets held for sale, and the transfer of $7,682 of intangible lease liabilities, net, to liabilities held for sale, and $59,288 in accrued capital expenditures.sale.
The non-cash investing activity for the threesix months ended MarchJune 31,30, 2025, that did not affect our cash used in investing activities, was the issuance of $5,765,000 of OP Units and the transfer of $397,367$8,951,336 from investment properties, net, to assets held for sale.sale, the transfer of $481,568 of intangible lease assets, net, to assets held for sale, the transfer of $476,656 of intangible lease liabilities, net, to liabilities held for sale and accrued capital expenditures of $87,017.
During the threesix months ended MarchJune 31,30, 2026, our cash provided by financing activities was $1,156,410$1,570,706 compared to cash used in financing activities of $1,898,196$2,430,954 during the threesix months ended MarchJune 31,30, 2025, an increase in cash provided by financing activities of $3,054,606.$4,001,660. During the threesix months ended MarchJune 31,30, 2026 our cash provided by financing activities consisted of $2,106,312$2,847,522 of proceeds from the sale of beneficial interests in DST entities, net of $228,725$352,408 in principal payments for our mortgages, and $721,177$924,408 in dividends and distributions. During the threesix months ended MarchJune 31,30, 2025, our cash used in financing activities consisted of $1,500,000 for the partial redemption of our mandatorily redeemable preferred stock, $274,737$140,788 for the repurchases of common stock, $507,597 in principal payments for our mortgages, and $123,459$282,569 in dividends and distributions.
The non-cash financing activity for the threesix months ended MarchJune 31,30, 2026, that did not affect our cash provided by financing activities was $3,720,000$5,992,000 for the conversion of OP Units to common shares and the transfer of $13,474,729 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale.
The non-cash financing activity for the six months ended June 30, 2025 that did not affect the our cash used in financing activities was transfer of $6,069,312 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale.
Liquidity for general operating needs and our investment properties is generally provided by the rental receipts from our investment properties, if any.any, and fee income generated by our DST Program. We expect to provide any liquidity for growth (acquisition of new investment properties) by raising additional investment capital. In addition, we continually reviewcapital and evaluatethrough ourshort outstandingterm mortgagesborrowings payableunder forthe refinancingPAL opportunities. While some of our mortgages payable are not pre-payable, some mortgages payable may present opportunities for refinancing.Agreement.
Our primary, non-operating liquidity needs are $149,919$151,168 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on AprilJuly 1,13, 2026 and paid on AprilJuly 21,30, 2026 to holders of record on AprilJuly 15,23, 2026, and $370,469$248,982 in principal payments due on its mortgages payable during the remaining ninesix months ending December 31, 2026. In addition to liquidity required to fund these dividends and principal payments, we may also incur some level of capital expenditures for our existing properties that cannot be passed on to our tenants. We plan to pay these obligations through a combination of cash on hand, sale of our marketable securities, potential dispositions of our investment properties, and cash generated by operations.
Three months ended MarchJune 31,30, 2026
Revenues for the three months ended MarchJune 31,30, 2026 and 2025 are as follows:
Total revenue was $2,159,265$1,808,422 for the three months ended MarchJune 31,30, 2026, a decrease of $162,375$656,751 from the three months ended MarchJune 31,30, 2025. We experienced decreased investment property revenues due to the sale of the Salisbury Marketplace, Buffalo Wild Wings, United Rentals, Parkway, Greenbrier andGreenbrier, Franklin Square and Citibank properties, and increased vacancy in the LancerAshley CenterPlaza Property, which were offset by increased revenues from the acquisition of the Tesla Pensacola Property andProperty, new leasing activity in the AshleyLancer PlazaCenter and Brookfield properties.properties, and DST Sponsorship Revenues from our new DST Program.
During the three months ended MarchJune 31,30, 2026 and 2025, our reportable segments consisted of our investment properties and our DST Sponsorship activities. We base our evaluation of our results of operations on the net operating income adjusted for interest expense of each reportable segment. In our discussion below, we have provided an evaluation on a property by property basis.
NOI adjusted for interest expense (“Adjusted Net Operating Income”), also a non-GAAP financial measure, is calculated by deducting operating expenses and interest expense from investment property rentaloperating revenues. Operating revenues from our investment properties include rental income, tenant reimbursements, other property income and non-cash revenues such as straight line rent and amortization of above and below market leases. Operating expenses for our investment properties include all investment property operating costs. Interest expense includes mortgage interest expense, only, and excludes non-mortgage interest expense and non-cash interest expense such as amortization of loan issuance costs. Operating revenues from our DST Program include acquisition fees, asset management fees and cost reimbursement revenues. Operating expenses from our DST Program include salaries and benefits, conferences and travel, marketing, administrative and other expenses.
Because Adjusted Net Operating Income only consists of revenues, operating expenses, and interest expense directly related to our real estate rental DST sponsorship operations, management believes that the use of Adjusted Net Operating Income to evaluate the financial performance of its operating segments and individual investment properties is a useful tool that can assist in the comparison of the operating performance of our real estate assets and DST Program between periods, or as compared to other companies and other investment opportunities we may consider from time to time. Management uses Adjusted Net Operating Income as a supplemental measure to evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance.
The following table presents property revenues, operating expenses and interest expense for our investment properties for the three months ended MarchJune 31,30, 2026 and 2025:
Investment propertyTotal revenues were $2,159,265$1,808,422 for the three months ended MarchJune 31,30, 2026, a $162,375$656,751 decrease from the three months ended MarchJune 31,30, 2025. Adjusted Net Operating Income from investment properties was $1,073,187$874,306 for the three months ended MarchJune 31,30, 2026, a decrease of $57,499$478,625 from the three months ended MarchJune 31,30, 2025, due to the sale of the sixseven properties, increasedreduced vacancyrevenues at the Lancer Center Property, slightlyand higher operating expenses at the Ashley Plaza Property and T-Mobile Property, offset by increased Adjusted NOI from the Brookfield Propertyand Lancer Center Properties due to new leasesleases, and increased Adjusted NOI from the EastDST CoastSponsorship Wings Property due to lower operating expenses.Program.
The following table presents revenues, operating expenses and interest expense for our DST Program for the three months ended MarchJune 31,30, 2026 and 2025:
We initiated our DST Program during the first quarter of 2026. Accordingly, there was no activity during 2025. During the three months ended June 30, 2026, we recorded $465,792 in DST Program revenues related to acquisition fees, asset management fees and cost reimbursement fees from XXV DST. During the three months ended June 30, 2026, we incurred $241,534 in expenses associated with our DST Program, including salaries and benefits, conferences and travel, marketing, administrative and other expenses.
Acquisition fees are generally earned upon the completion of the sale of all beneficial interests in a DST. Asset management fees are generally earned monthly. Disposition fees are earned upon the sale of a DST property and are generally subordinated to DST investors’ return of capital. Adjusted net operating income for the three months ended June 30, 2026 was $224,258.
We initiated our DST Program during the three months ended March 31, 2026. Accordingly, there was no activity during the three months ended March 31, 2025. During the three months ended March 31, 2026, we incurred $222,896 in expenses associated with our DST Program, including salaries and benefits, conferences and travel, marketing, administrative and other expenses. Our DST Program did not generate revenues during the three months ended March 31, 2026. DST Program revenues generally consist of acquisition fees, asset management fees, and disposition fees. Acquisition fees are generally earned upon the completion of the sale of all beneficial interests in a DST. Asset management fees are generally earned monthly, but we have waived our asset management fees that during the first year of the XXV DST. Disposition fees are earned upon the sale of a DST property and are generally subordinated to DST investors’ return of capital.
The following table presents our operating expenses for the three months ended MarchJune 31,30, 2026 and 2025:
Total operating expenses were $2,341,118$2,137,232 for the three months ended MarchJune 31,30, 2026, a decrease of $523,663$59,369 over the three months ended MarchJune 31,30, 2025, primarily due to decreased property operating expenses and depreciation and amortization expense due to the sales of the Salisbury Marketplace, Greenbrier Business Center, ParkwayParkway, Franklin Square and Citibank properties, and the transfer of the FranklinAshley SquarePlaza Property to assets held for sale, at which point, we ceased recording depreciation and amortization, and a decrease in sharecorporate basedgeneral compensationand expense,administrative netexpenses, ofoffset anby increase due toincreased DST sponsorship program expenses.expenses and increased legal, accounting and other professional fees and increased impairment of assets held for sale.
Operating Income
Operating income for the three months ended March 31, 2026 was $12,296,034, an increase of $12,848,550 from the operating loss of $552,516 for the three months ended March 31, 2025. This increase was primarily a result of the gain on the disposal of our investment properties, net of the loss on the extinguishment of debt related to three properties sold during the three months ended March 31, 2026.
Interest expense was $456,095$297,732 and $573,016$558,840 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, as follows:
Total interest expense for the three months ended MarchJune 31,30, 2026 decreased by $116,921$261,108 over the three months ended MarchJune 31,30, 2025. This decrease was primarily a result of the repayment of a portion of the Wells Fargo Mortgage Facility resulting from the sale of the Salisbury Marketplace and Greenbrier Business Center Properties and the repayment of the Parkway Center mortgageand Franklin Square mortgages resulting from the salesales of the Parkwayrespective Property.properties.
During the three months ended MarchJune 31,30, 2026, other income was $275,815,$548,404, which consisted of $69,627 of unrealized gains on our investment in marketable securitiessecurities, of $230,865, $26,704$69,000 related to the fair value change of the interest rate cap, $11,546$311,656 in dividend income, $62,978 in insurance proceeds related to property damage at the Brookfield Property, and $6,700$35,143 in interest income. This is an increase of $148,941$541,243 from other income of $126,874$7,161 for the three months ended MarchJune 31,30, 2025, which consisted of $118,529 in lease termination fees andwas interest income of $8,345.income.
During the three months ended MarchJune 31,30, 2026 and 2025 other expense was $71,627$60,388 and $28,226,$20,990, respectively. Other expense for the three months ended MarchJune 31,30, 2026 consists of unrealized loss on crypto assets. Other expense for the three months ended MarchJune 31,30, 2025 related to the fair value change of the interest rate cap.
Net Income (Loss) before Income Taxes
Net income was $12,044,127 for the three months ended March 31, 2026, before adjustments for net income attributable to noncontrolling interests. Net income for the three months ended March 31, 2026 increased by $13,071,011 over the three months ended March 31, 2025.
Effective on January 1, 2026, we revoked our election to be taxed as a REIT and as a result, we recorded a net deferred tax asset and income tax benefit of $3,902,878. In addition, for the three months ended MarchJune 31,30, 2026, we recorded a provision for income taxes of $1,824,236,$2,388, which consists of current and deferred components. Our effective tax rate of 16.4%(1.2)% of pre-tax income reported in the period differs from the federal statutory rate of 21% primarily due to establishing the net deferred tax asset upon the terminationdeconsolidation of our electionDST tosubsidiary bealong taxedwith asthe adisposals REIT.of certain investment properties.
Net Income (Loss)
Net incomeloss was $14,122,769$206,121 for the three months ended MarchJune 31,30, 2026, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net incomeloss attributable to our common stockholders was $8,966,809.$418,684.
Net incomeloss for the three months ended MarchJune 31,30, 2026 increaseddecreased by $15,149,653$125,042 over the three months ended MarchJune 31,30, 2025, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders for the three months ended MarchJune 31,30, 2026 increased by $9,973,635$37,760 over the three months ended MarchJune 31,30, 2025.
MDRR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 9 Form 4 filings (1 insider, 16 trade dates, 2,870 shares, about $31.4K) and open-market sales in 0 filings. Net open-market shares: 2,870 (purchases minus sales); net value about $31.4K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-09 | Winn Charles Brent Jr. |
Open-market purchase | 49 | $12.00 | $588 |
| 2026-09-08 | Winn Charles Brent Jr. |
Open-market purchase | 270 | $12.00 | $3.2K |
| 2026-09-04 | Winn Charles Brent Jr. |
Open-market purchase | 8 | $12.00 | $96 |
| 2026-09-03 | Winn Charles Brent Jr. |
Open-market purchase | 2 | $12.00 | $24 |
| 2026-09-02 | Winn Charles Brent Jr. |
Open-market purchase | 2 | $12.00 | $24 |
| 2026-08-31 | Winn Charles Brent Jr. |
Open-market purchase | 10 | $12.00 | $120 |
| 2026-08-28 | Winn Charles Brent Jr. |
Open-market purchase | 3 | $12.00 | $36 |
| 2026-08-27 | Winn Charles Brent Jr. |
Open-market purchase | 250 | $12.00 | $3.0K |
| 2026-08-26 | Winn Charles Brent Jr. |
Open-market purchase | 6 | $11.50 | $69 |
| 2026-08-20 | Winn Charles Brent Jr. |
Open-market purchase | 3 | $11.50 | $34 |
| 2026-08-19 | Winn Charles Brent Jr. |
Open-market purchase | 72 | $11.50 | $828 |
| 2026-05-22 | Winn Charles Brent Jr. |
Open-market purchase | 1,640 | $10.42 | $17.1K |
| 2026-05-21 | Winn Charles Brent Jr. |
Open-market purchase | 34 | $11.25 | $382 |
| 2026-05-20 | Winn Charles Brent Jr. |
Open-market purchase | 40 | $11.25 | $450 |
| 2026-05-19 | Winn Charles Brent Jr. |
Open-market purchase | 461 | $11.25 | $5.2K |
| 2026-05-18 | Winn Charles Brent Jr. |
Open-market purchase | 20 | $11.25 | $225 |
| 2026-04-16 | Kavanaugh Frank |
Conversion | 200,000 | $11.36 | $2.3M |
Well-known investors holding MDRR (13F)
None of the 59 investors we track reported a position in their latest 13F.