SQFT 10-K & 10-Q changes, risk factors and insider trading

Rising inflation and elevated U.S. budget deficits and overall debt levels, including as a result of federal spending, tariffs and/or economic or market and supply chain conditions, can put upward pressure on interest rates and could be among the factors that could lead to higher interest rates in the future. During inflationary periods, interest rates have historically increased. For instance, to control the rate of inflation, the Board of Governors of the Federal Reserve System (the “U.S. Federal Reserve”) raised its benchmark federal funds rate from nearly zero in March 2022 to a range between 4.25% and 4.50% as of December 31, 2024. Although there are expectations that the U.S. Federal Reserve will be reducingreduced the federal funds rate in September, October, and December 2025, thesefurther expectationsrate mightcuts may not materialize.materialize in 2026 and rates may be raised. Higher interest rates could adversely affect our overall business, income, and our ability to pay dividends, including by reducing the fair value of many of our assets and adversely affecting our ability to obtain financing on favorable terms or at all, and negatively impacting the value of properties and the ability of prospective buyers to obtain financing for properties we intend to sell. This may affect our earnings results, reduce our ability to sell our assets, or reduce our liquidity. Furthermore, our business and financial results may be harmed by our inability to accurately anticipate developments associated with changes in, or the outlook for, interest rates.

The COVID-19 pandemic has had, and in the future may continue to have, repercussions across regional and global economies and financial markets. Many countries, including the United States (including the states and cities that comprise the San Diego, California; DenverDenver, Westminster, Highlands Ranch, and Colorado Springs, Colorado; Fargo and Baltimore, Maryland; Houston, Texas; West Fargo and Bismarck, North Dakota; and other metro regions where we own and operate properties) had instituted quarantines, “shelter in place” mandates, and rules and restrictions on travel and the types of businesses that may continue to operate. While these restrictions have been lifted, new variants of the coronavirus and/or the spread of another highly infectious or contagious virus or disease could cause government authorities to extend, reinstitute and/or adopt new restrictions. As a result, the possibility remains that the COVID-19 pandemic or another public health crisis may negatively impact almost every industry, both inside and outside these metro regions, directly or indirectly and has created business continuity issues. For instance, a number of our commercial tenants temporarily closed their offices or stores and requested temporary rent deferral or rent abatement during the pandemic. In addition, jurisdictions where we own and operate properties had implemented rent freezes, eviction freezes, or other similar restrictions. The full extent of the impacts on our business over the long term are dependent on a number of factors beyond our control.

In 2024,2025, approximately 65%58% of our net operating income was from our office properties, and approximately 54%65% in 2023.2024. Work from home, flexible work schedules, open workplaces, videoconferencing, and teleconferencing are becoming more common, particularly as a result ofof, and following the COVID-19 pandemic. These practices may enable businesses to reduce their office space requirements. There is also an increasing trend among some businesses to utilize shared office spaces and co-working spaces. A continuation of the movement towards these practices could, over time, erode the overall demand for office space and, in turn, place downward pressure on occupancy, rental rates and property valuations.

We own threetwo of our properties indirectly through limited liability companies and limited partnerships under a DownREIT structure. In a DownREIT structure, as well as some joint ventures or other investments we may make, we may utilize a limited liability company or a limited partnership as the holder of our real estate investment. We currently own a portion of these interests as a member, general partner and/or limited partner and in the future may acquire all or a greater interest in such entity. As a sole member or general partner, we are or would be potentially liable for all of the liabilities of the entities, even if we do not have rights of management or control over its operations. Therefore, our liability could far exceed the amount or value of investment we initially made, or then had, in such entities.

Our commercial properties are currently located in California, Colorado, Maryland, North Dakota and Texas. Our model home portfolio consists of properties currently located in threefour states, although a significant concentration of our model homes is located in Texas. As of December 31, 2024,2025, approximately 94%84% of our model homes were located in Texas. This concentration of properties in a limited number of markets may expose us to risks of adverse economic developments that are greater than if our portfolio were more geographically diverse. These economic developments include regional economic downturns and potentially higher local property, sales and income taxes in the geographic markets in which we are concentrated. In addition, our properties are subject to the effects of adverse acts of nature, such as winter storms, hurricanes, hailstorms, strong winds, wildfires, earthquakes and tornadoes, which may cause damage, such as flooding, to our properties. Additionally, we cannot assure you that the amount of casualty insurance we maintain would entirely cover damages caused by any such event, or in the case of our model homes portfolio or commercial triple net leases, that the insurance maintained by our tenants would entirely cover damages caused by any such event.

There are many factors that can affect the availability and timing of cash distributions to our stockholders. Distributions are expected to be based upon our funds from operations, or FFO, financial condition, cash flows and liquidity, debt service requirements and capital or other expenditure requirements for our properties, and any distributions will be authorized at the sole discretion of our Board of Directors out of funds legally available therefor, and their form, timing and amount, if any, will be affected by many factors, such as our ability to acquire profitable real estate investments and successfully manage our real estate properties and our operating expenses. Other factors may be beyond our control. We can therefore provide no assurance that we will be able to pay or maintain distributions or that distributions will increase over time. For example, our distributions were suspended for the periods from the third quarter of 2017 through the third quarter of 2018 and for the final three quarters of 2019 through the third quarter of 2020. We have made quarterly distributiondistributions to our holders of Series A Common Stock since the fourth quarter of 2020 through the fourth quarter of 2023. If we do not have sufficient cash available for distributions, we may need to fund the shortage out of working capital or borrow to provide funds for such distributions, which would reduce the amount of proceeds available for real estate investments and increase our future interest costs. Our inability to pay distributions, or to pay distributions at expected levels, could result in a decrease in the per share trading price of our Series A Common Stock, Series D Preferred Stock or Series A Warrants.

We have $30.5$25.5 million of principal payments on mortgage notes payable relating to commercial properties in 2025,2026, fourone of which are maturingmatures in 2025,2026, and one which matured in July 2024. The loans for UTC and Research Parkway were paid in full, when the properties were sold in February 2025. The loan on Dakota Center matured in July 2024 and management has been working with the lender and their special servicer of the loan to sell the property and settle the debt. The lender has agreed to the Company selling the property on the open market with the use of a broker. We have also begun the process to refinance the remaining two loans that arewere due in September 2025. IfAfter initially attempting to refinance our Shea Center II loan, we arereceived unsuccessfulnotice inthat refinancingour failure to repay the full balance of the loan on the property orprior changingto January 5, 2026 had triggered a default event according to the terms of the originalloan. loan,The managementCompany wouldhas considerreceived sellingnotification that the Shea Center II property andgoverned payingby thethis loan inagreement fullwill orbe surrenderingmoved theinto propertyreceivership, towhich thewill currentfulfill lender.its obligation for this non-recourse loan. The model homes division pays off the balance of its mortgages using proceeds from the sale of the underlying homes. Any deficiency in the sale proceeds would have to be paid from existing cash, reducing the amount available for distributions and operations.

A REIT’s ownership of securities of a taxable REIT subsidiary is not subject to the 5% or 10% asset tests applicable to REITs. Not more than 25% of the value of our total assets could be represented by securities, including securities of taxable REIT subsidiaries, other than those securities includable in the 75% asset test. Further, for taxable years beginning after December 31, 2017, not more than 20% of the value of our total assets may be represented by securities of taxable REIT subsidiaries. However, under tax legislation enacted in 2025, this 20% asset value cap increases to 25% for calendar quarters commencing after December 31, 2025. We anticipate that the aggregate value of the stock and other securities of any taxable REIT subsidiaries that we own will be less than 20% of the value of our total assets, , and wein the future will not exceed 25% of the aggregate value of our total assets. We will monitor the value of these investments to ensure compliance with applicable asset test limitations. In addition, we intend to structure our transactions with any taxable REIT subsidiaries that we own to ensure that they are entered into on arm’s length terms to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with these limitations or avoid application of the 100% excise tax discussed above.

Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates is generally subject to tax at reduced rates. However, dividends payable by REITs to its stockholders generally are not eligible for the reduced rates for qualified dividends and are taxed at ordinary income rates (but U.S. stockholders that are individuals, trusts and estates generally may deduct 20% of ordinary dividends from a REIT for taxable years beginning after December 31, 2017 and before January 1, 2026).REIT. Although these rules do not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the reduced rates continue to apply to regular corporate qualified dividends, investors that are individuals, trusts and estates may perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could materially and adversely affect the value of the shares of REITs, including the per share trading price of our common stock, and could be detrimental to our ability to raise additional funds through the future sale of our common stock.

We are required to meet certain qualitative and financial tests to maintain the listing of our securities on Nasdaq. As of the date of this report, we are in compliance with all of Nasdaq’s continued listing requirements. As previously disclosed, the Company received a written notice from Nasdaq on June 6, 2023 notifying the Company that it had failed to meet the $1.00 per share minimum bid price requirement for continued inclusion on Nasdaq. On December 21, 2023, the Company announced that it received formal notice from the Nasdaq Stock Market, LLC stating that the Company had regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). On June 7, 2024, the Company received a written notice from Nasdaq notifying the Company that it had failed to meet the $1.00 per share minimum bid price requirement for continued inclusion on Nasdaq. The letter also indicated that the Company would be provided with a compliance period of 180 calendar days, or until December 4, 2024, in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). On December 5, 2024, Nasdaq notified the Company that it had determined that the Company is eligible for an additional 180 calendar day period, or until June 2, 2025, to regain compliance. If compliance cannot be demonstrated by June 2, 2025, Nasdaq will provide written notification that the common stock will be delisted. At that time, the Company may appeal the determination to a Hearings Panel.

There can be no assurance that we will be able to regainmaintain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria. If we are unable to regainmaintain compliance with the continued listing requirements of Nasdaq, our common stock could be delisted, making it more difficult to buy or sell our securities and to obtain accurate quotations,quotations and the price of our securities could suffer a material decline. Delisting could also impair our ability to raise capital.

The Series D Preferred Stock ranks junior to all of our existing and future debt and to other non-equity claims on us and our assets available to satisfy claims against us, including claims in bankruptcy, liquidation or similar proceedings. Our future debt may include restrictions on our ability to pay distributions to preferred stockholders. Our charter currently authorizes the issuance of up to 1,000,000 shares of preferred stock in one or more classes or series, all of which are currently classified as shares of Series D Preferred Stock. Subject to limitations prescribed by Maryland law and our charter, our Board of Directors is authorized to issue, from our authorized but unissued shares of stock, preferred stock in such classes or series as our Board of Directors may determine and to establish from time to time the number of shares of preferred stock to be included in any such class or series. The issuance of additional shares of Series D Preferred Stock or another series of preferred stock designated as ranking on parity with the Series D Preferred Stock would dilute the interests of the holders of shares of the Series D Preferred Stock, and the issuance of shares of any class or series of our stock expressly designated as ranking senior to the Series D Preferred Stock or the incurrence of additional indebtedness could affect our ability to pay distributions on, redeem or pay the liquidation preference on the Series D Preferred Stock. The Series D Preferred Stock does not contain any terms relating to or limiting our indebtedness or affording the holders of shares of the Series D Preferred Stock protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets, that might adversely affect the holders of shares of the Series D Preferred Stock, so long as the rights, preferences, privileges or voting power of the Series D Preferred Stock or the holders thereof are not materially and adversely affected.

We have paid and intend to pay regular monthly distributions to holders of our Series D Preferred Stock. Distributions declared by us are and will be authorized by our Board of Directors in its sole discretion out of assets legally available for distribution and will depend upon a number of factors, including our earnings, our financial condition, restrictions under applicable law, our need to comply with the terms of our existing financing arrangements, the capital requirements of our Company and other factors as our Board of Directors may deem relevant from time to time. We may be required to fund distributions from working capital, proceeds of our equity offerings or a sale of assets to the extent distributions exceed earnings or cash flows from operations. Funding distributions from working capital would restrict our operations. If we are required to sell assets to fund distributions, such asset sales may occur at a time or in a manner that is not consistent with our disposition strategy. If we borrow to fund distributions, our leverage ratios and future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. We may not be able to pay distributions in the future. In addition, some of our distributions may be considered a return of capital for income tax purposes. If we decide to make distributions in excess of our current and accumulated earnings and profits, such distributions would generally be considered a return of capital for federal income tax purposes to the extent of the holder’s adjusted tax basis in its shares. A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in its investment. If distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such stock.

The Series A Warrants have an exercise price of $7.00$70.00 per share. This exercise price does not necessarily bear any relationship to established criteria for valuation of our Series A Common Stock, such as book value per share, cash flows, or earnings, and you should not consider this exercise price as an indication of the current or future market price of our Series A Common Stock. There can be no assurance that the market price of our Series A Common Stock will exceed $7.00$70.00 per share at any time on the expiration date of the Series A Warrants, January 24, 2027, or at any other time the Series A Warrants may be exercised. If the market price of our Series A Common Stock on such date does not exceed $7.00$70.00 per share prior to the expiration of the Series A Warrants, your warrants will be of no value except to the extent that there is a value in their automatic conversion at expiration of 0.10.01 shares of Series A Common Stock rounded down to the nearest whole share.share

Under various federal, state and local environmental laws, ordinances and regulations, an owner or operator of real property is responsible for the cost of removal or remediation of hazardous or toxic substances on its property. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated. In addition, many insurance carriers are excluding asbestos-related claims from standard policies, pricing asbestos endorsements at prohibitively high rates or adding significant restrictions to this coverage. Because of potential difficulty in obtaining specialized coverage at rates that correspond to the perceived level of risk, we may not obtain insurance for asbestos-related claims. We will continue to evaluate the availability and cost of additional insurance coverage from the insurance market. If we purchase insurance for asbestos, the cost could have a negative impact on our results of operations.

Presidio Property Trust’s office, industrial and retail properties are located California, Colorado, Maryland, North Dakota and Texas. Our Model Home Properties are located in three states, primarily in Texas. We acquire properties that are stabilized or that we anticipate will be stabilized within two or three years of acquisition. We consider a property to be stabilized once it has achieved an 80% occupancy rate for a full calendar year, or has been operating for three years. Our geographical clustering of assets enables us to reduce our operating costs through economies of scale by servicing a number of properties with less staff, but it also makes us more susceptible to changing market conditions in these discrete geographic areas.

Our results of operations for the years ended December 31, 20242025 and 20232024 may not be indicative of those expected in future periods. ManagementDuring does2025, not expect the level of administrative expenses related to the 2024 annual meeting and the switching external auditors will be repeatedstagnations in 2025.previously Additionallyrising the de-SPAC transaction in 2023 resulted in the Company having an investment in Conduit which totaled approximately $18.3 million as of December 31, 2023, with a cost basis of approximately $7.5 million. The Company entered into a lock-up agreement with Conduit regarding the common stock held by the Company, for 180 days from the closing of the business combination which ended March 20, 2024. Due to the declining stock price of Conduit, the Company was unable to monetize our investment. As of December 31, 2024, the investment in Conduit was valued at approximately $0.2 million. During 2023, elevatedcommercial real estate pricesprices, in commercial real estate, increasingslow-to-decrease interest rates on lending,rates, and compressing capitalization rates across the US have made it challenging to acquire properties during 20242025 that fit our portfolio needs. As a result, we did not find any suitable commercial properties to acquire during 2024,2025, but we were able to acquire 1922 Model Home Properties. Management will continue to evaluate potential acquisitions in an effort to increase our portfolio of commercial real estate and model homes.

Impairment of Real Estate Assets. We regularly review for impairment on a property-by-property basis. Impairment is recognized on a property held for use when the expected undiscounted cash flows for a property are less than the carrying amount at which time the property is written-down to fair value. Impairment is recognized on a property held for sale when the fair value less costs to sell is less than the carrying amount. If the carrying amount exceeds the undiscounted cash flows, we calculate an impairment loss by comparing the carrying amount to estimated fair value, using discounted cash flow models or third-party appraisals. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows that are determined based on a number of inputs and assumptionsassumptions, suchincluding asbut not limited to, the intended hold period, market rental rates, leasing assumptions,terminal capitalization rates and discount rates.rate. Actual results could be significantly different from the estimates. Although our strategy is to hold our properties over the long-term, if our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized to reduce the property to fair value and such loss could be material.

As of December 31, 20242025 and December 31, 2023,2024, our marketable securities (excluding our investments in Conduit's common stock and common stock warrants), held at a third party broker, presented on the balance sheet were measured at fair value using Level 1 market prices and totaled approximately zero and $45,149,zero, respectively, with a cost basis of approximately zero and $40,315,zero, respectively. Our investments in Conduit's common stock and common stock warrants presented on the consolidated balance sheets were measured at fair value using Level 1 market prices, which are currently held at Conduit's transfer agent, taking into account the adoption of ASU 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, and totaled approximately $0.2 million$3,900 as of December 31, 2024,2025, with a cost basis of approximately $7.5 million. The Company entered into a lock-up agreement with Conduit regarding the common stock held by the Company, for 180 days from the closing of the business combination which ended March 20, 2024. There were no financial liabilities measured at fair value as of December 31, 20242025 and December 31, 2023.2024.

Revenues. Total revenue was approximately $18.9$16.8 million for the year ended December 31, 2024,2025 compared to approximately $17.6$18.9 million for the same period in 2023,2024, ana increasedecrease of approximately $1.3$2.1 million or 7.3%.11.2%. As of December 31, 2024,2025, we had approximately $108.6 million in net real estate assets including 80 model homes, compared to approximately $127.6 million in net real estate assets including 78 model homes, compared to approximately $144.2 million in net real estate assets including 110 model homes aton December 31, 2023.2024. The average number of model homes held during the years ended December 31, 20242025 and 20232024 was 9479 and 101,94, respectively. The change in revenue is directly related to the increasedecrease in modelcommercial homereal transactionestate feesrental income during the current period, newfrom the sale of our two commercial realproperties estateon leases,February mainly6, at Grand Pacific Center, and the management fees earned from Conduit during the current period, which was terminated in June 2024.2025. Below is additional revenue and asset information for real estate segments as of December 31, 20242025 and December 31, 2023.2024. Looking forward to 2026, it is worth noting that we expect the sale of Dakota Center and the loss of Shea Center II to result in a decrease of revenue of approximately $4.0 million.

Rental Operating Costs. Rental operating costs were approximately $6.3$6.2 million for the year ended December 31, 20242025 compared to approximately $6.0$6.3 million for the same period in 2023,2024, ana increasedecrease of approximately $0.3$0.1 million or 4.9%.1.6%. Rental operating costs as a percentage of total revenue were 33.1%36.6% and 33.8%33.1% for the years ended December 31, 20242025 and 2023,2024, respectively, as office property expenses continue to increase, specifically insurance costs. As of December 31, 20242025 our model home assets made up 29%33.8% of our total real estate assets, which is downup from 35%29.3% as of December 31, 2023,2024, and our gross revenue from model home assets represented approximately 23.4% of23.5%of our total revenue. This percentage is expected to increase in 20252026 as the percentage of our model home real estate assets has increased, with the sale of Union TownDakota Center in 2026 and Researchthe Parkwaystatus inof FebruaryShea 2025,Center whichII; willhowever, reduceif futurewe rentalpurchase incomeadditional untilproperties thoseduring proceeds2026, are reinvested but it will also reduceour rental operating costs.costs Thecould saleincrease. As for our commercial properties, we expect operating costs to decrease by $2.5 million as a result of ourthe Dakota Center buildingsale willand alsothe reduceloss rentalof operatingShea costs.Center II.

General and Administrative. General and administrative (“G&A”) expenses were approximately $7.5$5.7 million for the year ended December 31, 2024,2025, compared to approximately $6.8$7.5 million for the same period in 2023,2024, representing ana increasedecrease of approximately $0.7$1.8 million or 10.8%.24.2%. As a percentage of total revenue, our general and administrative costs were approximately 39.8%33.9% and 38.5%39.8% for the years ended December 31, 20242025 and 2023,2024, respectively. G&A expenses increasedcomparatively bydecreased approximatelyin $0.52025, millionlargely mainly relateddue to the one-time nature of the 2024 annual meeting and settlement with Zuma Capital and certain individuals and entities affiliated or associated with Zuma Capital Management, LLC ("Zuma Capital"). ThisThe includedcomparative decline was also due to additional consulting fees, higher proxy solicitation feesfees, and legal fees,fees in 2024, all of which increaseddecreased by an aggregate of approximately $0.6 million in 20242025 as compared to 2023.2024. Additionally, employee, ex-officer and board costs, including stock compensation and bonus accruals increased during the year ended December 31, 2024 by approximately $0.5 million as compared to the same period in 2023 related to De-SPAC success bonuses to current and former employees. This was slightly offset by the approximately $0.2 million reduction of D&O insurance related to the SPAC in 2023 that was not consolidated during 2024.million.

Depreciation and Amortization. Depreciation and amortization expenses were approximately $5.5$4.9 million for the year ended December 31, 2024,2025, compared to approximately $5.4$5.5 million for the same period in 2023.2024. The decrease is directly related to the sale of our retail properties UTC and Research Parkway during February 2025. Looking ahead to 2026, we expect these costs to decrease as both Shea Center II and Dakota Center made up approximately $1.0 million in depreciation and amortization costs.

Asset Impairments. We review the carrying value of goodwill and each of our real estate properties annually to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the year ended December 31, 2024,2025, we recognized a non-cash impairment charge of approximately $2.0$6.4 million on goodwill and our real estate assets. Of the $2.0$6.4 million impairment for the year, approximately $1.4approximately$6.0 million was related to our commercial properties DakotaShea CenterCener II and 300Dakota NP,Center, approximately $0.4$0.3 million was related to model homes, and approximately $0.2$0.1 million was related to goodwill impairment. The impairment on ourShea commercialCenter property, Dakota Center,II was primarily related to suboptimal occupancy levels and the resultnear term conditions of the loanDenver maturingmarket inconditions, July andwhile the Company not being able to reach an agreement with the lenders regarding a loan modification or extension. In October, the lender has agreed to a sale of the property to settle the balance of the non-recourse loan. Due to the uncertainties in the Fargo market, we concluded it was necessary to impair the property’s book value, in accordance with ASC 360-10. As such, we recorded an impairment charge of approximately $0.7 million, during September 2024. The impairment on 300 NP, totaling approximately $0.7 million related to changing cap rates in the area and low historical occupancy. This property is not listed for sale and has no debt. The new impairment charges for the model homes reflectsreflect the estimated and actual sales prices for these specific model homes that were sold after the end of each quarter.homes. This was the result of an abnormally short hold period, less than two years, on model homes purchased in 2022. The builder changed their product style in the neighborhoods where these model homes are located, in Texas, after we had purchased the homes.years. We do not believe these losses are indicative of our overall model home portfolio. As noted above in the Overview section, during the year ended December 31, 2024,2025, we sold 5120 model homes for approximately $24.8$9.8 million and the Company recognized a gain of approximately $3.4$1.0 million. We expect to record a net gain on model home sales in the first quarter of 2025 as well. The impairment to goodwill was related to NTR Property Management and the fair market value adjustment based on future expected cash flows.

DuringPreviously for the year ended December 31, 2023,2024, we recognized a non-cash impairment charge of approximately $3.2$2.0 million related to goodwill and model homes. Of the $3.2$2.0 million impairment for the year, approximately $2.0$1.4 million was related to our One Park Center property, approximately $0.4 million was related to eight model homes, and approximately $0.8$0.2 million was related to goodwill impairment. The impairment charge for One Park Center reflects management’s revised estimate of the fair market value based on sales comparable of like property in the same geographical area as well as an evaluation of future cash flows or an executed purchase sale agreement. As of January 14, 2026, Dakota Center had sold for a value of $5,125,000.

Income allocated to non-controlling interests. Income allocated to non-controlling interests for the years ended December 31, 20242025 and 20232024 totaled approximately $2.5$0.7 million, and $3.0$2.5 million, respectively, and was directly impacted by the sale of 186 and 1318 model homes,homes held by our Model Home Partnerships during the years ended December 31, 20242025 and 2023,2024, respectively, held by our Model Home Partnerships.respectively.

We may refer to the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, as the "2026 Quarter" and the "2025 Quarter," respectively.

The Company operates as an internally managed, diversified REIT, with primary holdings in office, industrial, retail, and triple-net leased model home properties. In October 2017, we changed our name from "NetREIT, Inc." to "Presidio Property Trust, Inc." The Company acquires, owns, and manages a geographically diversified portfolio of real estate assets, including office, industrial, retail and model home residential properties leased to homebuilders located in the United States. As of MarchJune 31,30, 2026, the Company owned or had an equity interest in:

Acquisitions during the threesix months ended MarchJune 31,30, 2026

Acquisitions during the threesix months ended MarchJune 31,30, 2025

Dispositions during the threesix months ended MarchJune 31,30, 2026:

Dispositions during the threesix months ended MarchJune 31,30, 2025:

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MarchJune 31,30, 2026 and 2025

Revenues. Total revenues were approximately $3.8 million for the three months ended MarchJune 31,30, 2026, compared to approximately $4.1$4.4 million for the same period in 2025. As of MarchJune 31,30, 2026, we had approximately $100.5$95.0 million in net real estate assets including 7571 model homes, compared to approximately $117.4$114.6 million in net real estate assets, including 8487 model homes at MarchJune 31,30, 2025. The average number of model homes held during the three months ended MarchJune 31,30, 2026 and 2025 was approximately 7873 and 81,85, respectively. TheAdditionally, the change in revenue is directly related to the decrease in commercial real estate rental income during the current period from the sale of Dakota Center.

Rental Operating Costs. Rental operating costs totaled approximately $1.5$1.3 million for the three months ended MarchJune 31,30, 2026, compared to approximately $1.6$1.5 million for the same period in 2025. Rental operating costs as a percentage of total revenue was approximately 35%33.0% and 39%33.4% for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

General and Administrative Expenses. G&A expenses for the three months ended MarchJune 31,30, 2026 and 2025 totaled approximately $1.7$1.3 million and $1.7$1.2 million, respectively. G&A expenses as a percentage of total revenue was 44.4%35.2% and 40.3%27.9% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. G&A expenses for the three months ended MarchJune 31,30, 2026 remainedwere constantslightly up compared to the same period ending in 2025 due to costs associated with downsizing our staff; however, the Company is still actively looking to reduce G&A expenses during the year. There has been a reduction of employee headcount during the first quarterand second quarters of 2026 with more expected this year. Starting in April 2026, the Chief Executive Officer has agreed to a voluntary 5% reduction in his annual salary. Additionally, the size of the Board of Directors havewas approved the reductionreduced by one Directordirector starting in June 2026, which will provide additional G&A savings.

Depreciation and Amortization. Depreciation and amortization expense was approximately $1.0$0.9 million and $1.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease in depreciation and amortization expense is directly related to the decrease in commercial real estate rental income during the current period, from the sale of Dakota Center and the placement of Shea Center into receivership and listed as held for sale.

Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the three months ended MarchJune 31,30, 2026 and 2025, we recognized non-cash impairment charges of approximately $524,373$3.0 million and $26,943,$4.3 million, respectively. Approximately $0.4$2.6 million and $0.9 million of the impairment chargecharges for the three months ended MarchJune 31,30, 2026 and 2025, was related to the Shea Center II. Additionally, during the three months ended June 30, 2025, we recorded an impairment charge on the Dakota Center property for approximately $3.3 million.

Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance chargescharges, was approximately $2.1$1.2 million for the three months ended MarchJune 31,30, 2026, compared to approximately $1.5 million for the same period in 2025. The weighted average interest rate on our outstanding debt was 6.29%6.28% and 5.83%5.44% as of MarchJune 31,30, 2026 and 2025, respectively. Mortgage notes payable totaled approximately $82.4$80.9 million and $94.4$92.9 million as of MarchJune 31,30, 2026 and 2025, respectively. While mortgage interest expenses increased over the three months ended March 31, 2026 and 2025, approximately $0.7 million of the interest expense attributed to the three months ended March 31, 2026 was related to one-time charge for the default interest on the loan for Dakota Center. Management expects future interest expenses to continue to decrease going forward for the year endedending 2026.2026 Additionally, duringwith the three months ended March 31, 2026, we recorded defaulted interest expenseloss of approximately $0.1 million related to the Shea Center II loan.property on July 1, 2026 and related mortgage.

Income allocated to non-controlling interests. Income allocated to non-controlling interests for the three months ended MarchJune 31,30, 2026 and 2025 totaled approximately $0.1$40,230 of expense and $0.2 million andof $0.1 million,income, respectively. This was directly related to the gain on sales of model homes held by our affiliated limited partnerships.

Loss on Conduit remeasurement. As of MarchJune 31,30, 2026, we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $5,885.$11,628. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

The following table shows a list of our commercial properties owned by the Company grouped by state and geographic region as of MarchJune 31,30, 2026:

The following table shows a list of our Model Home properties by state and geographic region as of MarchJune 31,30, 2026:

Our anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings from our model home lines of credit, and the sale of our equity or issuance of debt securities or bonds. Our cash and restricted cash at MarchJune 31,30, 2026 was approximately $5.2$5.9 million. Our future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. We also are actively seeking model home investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.

On February 13, 2026, in connection with an ex parte motion brought by the Lender, the Borrower entered into a stipulation with the Lender to appoint Trigild IVL (the “Receiver”) as receiver over the Property and for the entry of an Order for Appointment of Receiver (the “Order”). Pursuant to the Order, the Borrower, and certain defendant parties, which included the Company (the “Borrower Parties”) were enjoined and restrained from collecting any rents or fees from or incident to the Property and from interfering with the Property. The Borrower Parties agreed to turn over to the Receiver all sums in existence as of the date of entry of the Order that are related or pertain to, or are derived from, the Property. In addition, the Receiver was given possession of the Property and has full power and authority to operate, manage, and preserve the Property. In the case of our non-recourse loan for Shea Center II, our obligation will be settled through the foreclosure process with the lender. On July 1, 2026, the foreclosure for Shea Center II took place with the property going to Argentic Services Company LP, who acquired the property by placing a minimum credit bid valued at $12.0 million, and no cash consideration was exchanged.

While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. In December 2024, the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock, which the Board of Directors did not renew in December 2025. During the year ended December 31, 2025, we repurchased 16,080 shares of our Series A Common Stock, with an average price of $4.79 per share, including a commission of $0.025 per share, for a total cost of $77,092 for the Series A Common Stock. This does not include the shares repurchased in the fixed price self-tender offer (the "Tender Offer") during April-May 2025. During the year ended December 31, 2025, the Company repurchased 23,346 shares of our Series D Preferred Stock at an average price of approximately $14.76 per share, including a commission of $0.035 per share, for a total cost of $344,503 for the Series D Preferred Stock. Any repurchased shares are treated as authorized and unissued in accordance with Maryland law and shown as a reduction of stockholders’ equity at cost. There were no repurchases of Series A Common Stock or Series D Preferred Stock during threesix months ended MarchJune 31,30, 2026 as there were no repurchase plans in place.

For the threesix months ended MarchJune 31,30, 2026, the Company did not declare a cash dividend on shares of Series A Common Stock. For the threesix months ended MarchJune 31,30, 2026, the Company did not declare and did not pay dividends on shares of Series D Preferred Stock. As of January 28, 2026, the Board of Directors has suspended the Company’s monthly dividend on its Series D Preferred Stock commencing with the January 2026 monthly dividend that would have been paid on February 15, 2026. Since the Company’s Board of Directors did not declare a dividend during the threesix months ended MarchJune 31,30, 2026, an accrual was not recorded on the balance sheet. However, undeclared preferred stock dividends are reflected in earnings per share as discussed in ASC 260-10-45-11. In accordance with the terms of the Series D Preferred Stock, Preferredpreferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. No interest, or sum of money in lieu of interest, is payable in respect of any dividend payments on the Series D Preferred Stock that are in arrears. As of MarchJune 31,30, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was $0.6$1.1 million and $0, respectively.

The Board and the Company intend to reassess, on a quarterly basis, when accrued dividends on the Series D Preferred Stock may be paid and when the monthly dividend payments can be reinstated. Under the guidance of ASC 260-10-45-11, if the Company's Board of Directors dodoes not declare a dividend in a given period, an accrual is not recorded on the balance sheet, however; undeclared preferred stock dividends are reflected in earnings per share. Preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. Cash permitting, the Company intends to continue to pay dividends on a monthly basis to holders of our Series D Preferred Stock going forward, but there can be no guarantee the Board of Directors will approve any future dividends. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. As of March 31, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was $0.6 million and $0, respectively.

At MarchJune 31,30, 2026 and December 31, 2025, we had approximately $5.2$5.9 million and $7.4 million in cash equivalents, respectively, including $3.6$4.4 million and $5.7 million of restricted cash, respectively. Our cash equivalents and restricted cash consist of invested cash, cash in our operating accounts, short-term bonds and cash held in bank accounts at third-party institutions. During 2026 and 2025, we did not experience any loss or lack of access to our cash or cash equivalents. Including any cash committed to current capital expenditures on our properties, the Company may spend approximately $0.6$1.6 million on capital expenditures, net of any construction financing (some of which is held in deposits reserve accounts by our lenders) during the rest of the year. We intend to use the remainder of our existing cash and cash equivalents for asset/property acquisitions, reduction of principal debt, general corporate purposes, common stock repurchases (if market conditions are met), or dividends to our stockholders.

As of MarchJune 31,30, 2026, all our commercial properties, except 300 N.P. which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $58.5$58.4 million, collateralized by a total of seven commercial properties with loan terms at issuance ranging from 5 to 10 years. The weighted-average interest rate on these mortgage notes payable as of MarchJune 31,30, 2026, was approximately 5.78%, 5.93% , and our debt to estimated market value for our commercial properties was approximately 72.0%.69.2%. During the next 12 months, none of our commercial property loans will mature. The non-recourse loan on the Dakota Center property matured on July 6, 2024;2024. duringIn the month of July 2025, the lender approved a purchase offer from a third party for $5,125,000, and as of January 14, 2026, Dakota Center had sold for a value of $5,125,000. During January 2026, the Company received notice that the Company's failure to repay in full by January 5, 2026 the indebtedness related to the loan agreement governing Shea Center II had triggered a default event. On February 13, 2026 the Company received notification that the Shea Center II property governed by the loan agreement was moved into receivership. The foreclosure sale and public auction is scheduled for June 17, 2026.

As of MarchJune 31,30, 2026, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $23.9$22.5 million, collateralized by a total of 7571 Model Homes. These loans generally have a term at issuance of three to five years. As of MarchJune 31,30, 2026, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $323,577$316,844 and 7.13%,7.18%, respectively. Our debt to estimated market value on all our model home properties is approximately 59.0%.62.4%. We have been able to refinance maturing mortgages to extend maturity dates and we have not experienced any notable difficulties financing our acquisitions. The Company anticipates that any new mortgages used to acquire commercial properties or model homes in the near future will be at rates higher than our currently weighted average interest rate.

Cash Flow for the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025

Operating Activities: Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026, totaled approximately $1.0 million,$24,839, as compared to cash used in operating activities of $0.1$1.0 million for the threesix months ended MarchJune 31,30, 2025. The change in net cash used in operating activities is primarily due to the sale of Dakota Center, combined with other changes in net income, which fluctuates due to new leases, leasing renewals, tenant move outs and model home sales and acquisitions, as well as changes in non-cash addbacks or subtractions such as straight-line rent, are the primary drivers of the increase in cash used in operating activities.

Investing Activities: Net cash provided by investing activities for the threesix months ended MarchJune 31,30, 2026, was approximately $6.9$8.3 million compared to approximately $13.6$11.4 million used in investing activities during the same period in 2025. The change from each period was primarily related to the sale of our commercial properties in February 2025 for approximately $4.7 million, net of selling costs, and the sale of model home propertiesproperties, fortotaling approximately $7.4$8.7 million during the threesix months ended MarchJune 31,30, 2026.2026, Therecompared wereto noapproximately similar$21.5 commercial property salesmillion during the threesix months ended MarchJune 31,30, 2025, however, model home sales during the three months ended March 31, 2025 totaled approximately $22.3 million.2025. Cash used in real estate acquisition and capital improvement totaled approximately $0.2$0.5 million, for the threesix months ended MarchJune 31,30, 2026 compared to $4.8$10.2 million for the same period in 2025.

Financing Activities: Net cash used in financing activities during the threesix months ended MarchJune 31,30, 2026, was $8.2$9.8 million compared to $9.5$11.1 million provided by financing activities for the same period in 2025 and was primarily due to the following activities for the threesix months ended MarchJune 31,30, 2026:

If all the potential Common Stock Warrants outstanding at MarchJune 31,30, 2026, were exercised at the price of $12 per share, gross proceeds to us would be approximately $2.4 million and we would as a result issue an additional 200,000 shares of common stock.

If all the potential Placement Agent Warrants outstanding at MarchJune 31,30, 2026, were exercised at the price of $62.50 per share, gross proceeds to us would be approximately $0.5 million and we would as a result issue an additional 8,000 shares of common stock.

If all the potential Series A Warrants outstanding at MarchJune 31,30, 2026, were exercised at the price of $70.00 per share, gross proceeds to us would be approximately $101.2 million and we would as a result issue an additional 1,445,007 shares of common stock.