What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-27 compared with 2025-03-31 · 151 added, 211 removed, 222 unchanged (62% of the section changed)

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As of December 31, 2025, including properties held for sale, the Company owned or had an equity interest in:

Eight office properties and one industrial property (“Office/Industrial Properties”) which total approximately 758,175 rentable square feet.

One retail shopping center (“Retail Properties”) which totals approximately 10,500 rentable square feet, and

80 model homes owned totaling approximately 237,981 square feet, by four affiliated limited partnerships and one corporation (“Model Home Properties”).

Previously, the Company reported a multi-tenant portfolio for the year ended December 31, 2024 of:

• Eight office buildings and one industrial building (“Office/Industrial Properties”) which total approximately 758,175 rentable square feet,

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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.

Our Model Home Properties are located primarily in Texas.

We acquire properties that are stabilized or that we anticipate will be stabilized within two or three years of acquisition.

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We acquired 22 Model Home Properties and leased them back to the homebuilders under triple net leases during the year ended December 31, 2025.

The purchase price for these properties was $9.7 million.

The purchase price consisted of cash payments of $3.0 million and mortgage notes of $6.7 million.

The purchase price for these properties was approximately $9.4 million.

The purchase price consisted of cash payments of approximately $2.8 million and mortgage notes of approximately $6.6 million.

Acquisitions during the year ended December 31, 2024:

We acquired 19 Model Home Properties and leased them back to the homebuilders under triple net leases during the year ended December 31, 2024.

The purchase price for the properties was $21.9 million.

The purchase price consisted of cash payments of $6.6 million and mortgage notes of $15.3 million.

The purchase price for the properties was approximately $9.7 million.

The purchase price consisted of cash payments of approximately $3.0 million and mortgage notes of approximately $6.7 million.

We review our portfolio of investment properties for value appreciation potential on an ongoing basis, and dispose of any properties that no longer satisfy our requirements in this regard, taking into account tax and other considerations.

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During year ended December 31, 2025, we disposed of the following properties:

51 model homes for approximately $24.8 million and the Company recognized a gain of approximately $3.4 million.

20 model homes for approximately $9.8 million, net of sales costs, and the Company recognized a gain of approximately $1.0 million.

On February 6, 2025, the Company sold two commercial properties, Union Town Center and Research Parkway, to a single buyer for approximately $15.9 million, net of selling costs, and recognized a net gain of approximately $4.5 million net of closing costs.

Dispositions during the year ended December 31, 2024:

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51 model homes for approximately $24.8 million and the Company recognized a gain of approximately $3.4 million.

Sponsorship of Special Purpose Acquisition Company

On January 7, 2022, we announced our sponsorship, through our wholly-owned subsidiary, Murphy Canyon Acquisition Sponsor, LLC (the “Sponsor”), of a special purpose acquisition company (“SPAC”) initial public offering.

Murphy Canyon Acquisition Corp.

(“Murphy Canyon” or the “SPAC”) raised $132,250,000 in capital investment to acquire an operating business.

We, through our wholly-owned subsidiary, owned approximately 23.49% of the issued and outstanding stock in the entity upon the initial public offering being declared effective and consummated (excluding the private placement units described below), and following the completion of its initial business combination, the SPAC operates as a separately managed, publicly traded entity.

The SPAC offered $132,250,000 units, with each unit consisting of one share of common stock and three-quarters of one redeemable warrant.

The Sponsor purchased an aggregate of 828,750 units (the “placement units”) of the SPAC at a price of $10.00 per unit, for an aggregate purchase price of $8,287,500.

The placement units were sold in a private placement that closed simultaneously with the closing of the SPAC initial public offering.

The Sponsor has agreed to transfer an aggregate of 45,000 placement units (15,000 each) to each of Murphy Canyon’s independent directors.

On November 8, 2022, the SPAC entered into an agreement and plan of merger with Conduit Pharmaceuticals Limited, a Cayman Islands exempted company (“Conduit Pharma”), and Conduit Merger Sub, Inc., a Cayman Islands exempted company and the SPAC’s wholly owned subsidiary.

The merger agreement provided that the SPAC’s Cayman Island subsidiary will merge with and into Conduit Pharma, with Conduit Pharma surviving the merger as the SPAC’s wholly owned subsidiary and the public company renamed “Conduit Pharmaceuticals Inc.” (“Conduit”).

Initially, the SPAC was required to complete its initial business combination transaction by 12 months from the consummation of its initial public offering or up to 18 months if it extended the period of time to consummate a business combination in accordance with its certificate of incorporation.

On January 26, 2023, at a special meeting of the stockholders, the stockholders approved a proposal to amend the SPAC’s certificate of incorporation to extend the date by which it has to consummate a business combination up to 12 times, each such extension for an additional one-month period, from February 7, 2023, to February 7, 2024.

The stockholders also approved a related proposal to amend the trust agreement allowing the SPAC to deposit into the trust account, for each one-month extension, one-third of 1% of the funds remaining in the trust account following the redemptions made in connection with the approval of the extension proposal at the special meeting.

Following redemptions made in connection with the special meeting, we owned approximately 65% of the issued and outstanding equity of the SPAC.

Throughout 2023, we loaned Murphy Canyon $1.0 million to fund its trust account and for operating expenses.

The loan was non-interest bearing, unsecured and was repaid in full on the date of Murphy Canyon’s business combination with Conduit Pharma.

On September 22, 2023, Murphy Canyon completed its business combination with Conduit Pharma and changed its name to “Conduit Pharmaceuticals Inc.” Immediately prior to the business combination the Company owned approximately 65% of the SPAC’s outstanding common stock.

Upon consummation of the business combination, the SPAC’s shares of Class B common stock were converted into shares of its Class A common stock and the shares of Class A common stock were then reclassified as a single class of Conduit common stock.

As a result of the business combination, the Company was issued (i) 3,306,250 shares of Conduit’s common stock due to the conversion of the shares of the SPAC’s Class B common stock into shares of the SPAC’s Class A common stock and then reclassification into shares of Conduit common stock, (ii) 754,000 shares of Conduit common stock, which prior to the business combination were shares of the SPAC’s Class A common stock and (iii) private warrants to purchase 754,000 shares of Conduit common stock, which prior to the business combination were warrants to purchase 754,000 shares of the SPAC’s Class A common stock.

Also in the business combination, shareholders and debtholders of Conduit Pharma were issued 65,000,000 shares of Conduit common stock.

Immediately following the consummation of the business combination, the Company transferred 45,000 shares of Conduit common stock and warrants to purchase 45,000 shares of Conduit common stock to the SPAC’s independent directors as compensation for their services.

As a result, the Company owned approximately 6.5% of Conduit’s common stock immediately following the business combination and currently own less than 1% of Conduit’s common stock.

In connection with the business combination, the Company’s officers and directors who also served as officers and directors of the SPAC resigned from the SPAC, with the exception of the Company’s former Chief Financial Officer who resigned from the Company.

ECONOMIC ENVIRONMENT

According to Nareit's, the National Association of Real Estate Investment Trusts, 2025 REIT Market Outlook, as discussed at the FTSE Nareit U.S.

Real Estate Indexes in Review and What’s Next webinar on January 14, 2025, "there is a real possibility for an environment with both moderating interest rates and robust economic growth, otherwise known as an economic soft landing.

Nevertheless, there are both lingering and emerging risks, including soft property fundamentals in some sectors, higher interest rates reflecting fiscal imbalances, and the possibility that shifting tariff policies could restrain commercial real estate (CRE) performance in 2025." Current U.S.

economic conditions that seem to support a soft landing according to Nareit are:

Real gross domestic product (GDP) increased at an annual rate of 2.8% in the third quarter of 2024, according to the “second” estimate.

Total nonfarm employment increased by 227,000 jobs and the unemployment rate was 4.2% in November 2024.

The Consumer Price Index for All Urban Consumers (CPI) increased 2.7% over the 12 months through November 2024 and core CPI (excluding food and energy) rose 3.3%.

Through November, the Federal Open Market Committee (FOMC) reduced its target policy rate range twice in 2024;

it now stands at 4.50% to 4.75%.

As of November 2024, the Bloomberg consensus forecast survey placed the probability of a U.S.

recession within the next 12 months at 25%;

it was 30% in September.

According to Nareit, the lingering public-private real estate valuation phenomenon has impeded significant property transaction activity.

Despite reaching its crest two years ago, the spread between REIT implied and private appraisal cap rates has been stubbornly slow to close.

Recent REIT performance, however, has made material progress in closing the gap.

The long goodbye to the current valuation divergence may finally be reaching its end.

Quarterly total return differences and cap rate spreads have a negative relationship, for example:

When REITs had the greatest degree of outperformance (+22.8%) in the fourth quarter of 2023, the cap rate spread plunged by 94 bps.

When REITs experienced the greatest degree of underperformance (-19.5%) in the second quarter of 2022, the cap rate spread surged by 79 bps.

When REITs outperformed (+16.5%) in the third quarter of 2024, the cap rate spread dropped to 69 bps, a level less than half its previous quarter’s value.

The chart below displays occupancy rates for the four traditional property types from the fourth quarter of 2008 to the third quarter of 2024.

In recent years, the retail sector has enjoyed a rising occupancy rate, but it appears to have plateaued.

In contrast, occupancy rates for the apartment and industrial sectors have dropped off in the face of record amounts of new supply following record rent growth in the past few years.

Office occupancy reflects a shifting and uncertain demand environment with the advent of more widespread remote work.

As of the third quarter of 2024, CoStar occupancy rates for the retail, industrial, apartment, and office sectors were 95.9%, 93.4%, 92.1%, and 86.1%, respectively.

Occupancy rate trends will likely weigh on future property operational performance.

They also underscore the need for realism in investment underwriting (1) .

https://www.reit.com/news/blog/market-commentary/reit-cre-outlook-evolution-2025

We believe that the US macroeconomic environment in 2026 is marked by cautious optimism in the face of generally uncertain headwinds:

as Morgan Stanley notes in its market outlook for 2026, an expectation for sheepish growth in Q1 of 2026 dovetails into forecasts of moderate improvement as monetary policy moves to a more neutral position.

Similar observations have been noted by other investor outlooks;

for example Colliers Securities notes that while signs of economic distress have been present, the scale of these signals was beneath expectations and the reaction to them in the lending market has been to “kick the can," suggesting that the market has a tolerance for near term uncertainty on the belief that headwinds will lessen further down the road.

The general optimism for a resilient marketplace, coupled with the expectation for decreases in interest rates from the Federal Reserve, could position REITs more favorably in 2026 relative to recent periods as market conditions show signs of trending towards equilibrium.

REIT-related experts like Nareit cite that a shift towards equilibrium would position REITs to improve their value as two key gaps close:

the gap between public and private real estate valuations, and the gap between REITs and broader tech-focused equity.

Below, two graphics highlight the ongoing gaps and the historical tendency for the narrowing of such gaps to favorably affect REIT valuations:

In the corresponding bar graph, REITs have dealt with a long-standing gap of 100+ basis points between public and private valuations.

The closure of such a gap has historically corresponded with an increase in real-estate transactions as private appraisal valuations fall or the cost of purchasing continues to decrease as interest rates fall.

Conversely speaking, the historical trend line of comparative earnings valuations illustrates that while current valuations favor broader-equity, REITs’ earnings multiples suggest an opportunity for relative outperformance as this gap narrows.

While the timing of such a normalization remains uncertain, the current macroeconomic forecasts of moderate interest rate cuts and market resilience would support the gradual normalization of relative valuations over time.

The tension within this current valuation gap seems to track with the broader real estate market sentiment in general;

CBRE reports that across all sectors, capitalization rates have leveled off at a peak value over the last two fiscal quarters of 2025, a trend that would support the eventual increase in property valuations.

CREDIT MARKET ENVIRONMENT

Current market rates in February 2025 on fixed rate mortgages on homes ranged from 6.15% - 6.98%, depending on the term (2) .

Current market rates for 5–10 year fixed rate loans for commercial properties ranged from 5.55% - 6.88%, depending on the type of building (retail/industrial/office) (3) .

Interest rates decreased in 2024 compared to 2023 due to the Federal Reserve cutting interest rates 100 basis points, or 1%, in hopes of slowing down inflation going from 5.5% in July 2023 to 4.5% in December 2024.

According to the Federal Reserve "The Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent.

In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.

The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.

The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective” (4).

Although rates decreased in 2024, it does not necessarily indicate that we would be unable to refinance or obtain mortgages on new homes or commercial properties at the same rate we have historically when they come due, as rates vary by property and are dependent upon factors including property cash flows, occupancy rates and lender credit.

As noted by Colliers Securities in its Q32024 Office Outlook:

office market ended 2024 with early signs of stability as metrics improved throughout the year, and much less space was returned to the market than in 2023.

However, strong headwinds in 2025 suggest an uneven recovery and likely several bumps over the next few years.

Occupiers continue to reduce space as their leases expire but are likely to upgrade to a higher quality space and building.

Despite headlines focused on large companies' return-to-office efforts, most have evolved their office operations, embracing flexibility to encourage productivity.

Large, sprawling campuses are being rethought, with the potential for redevelopment opportunities."

https://www.bankrate.com/mortgages/mortgage-rates/#mortgage-news

https://selectcommercial.com/commercial-mortgage-rates.php

https://www.federalreserve.gov/newsevents/pressreleases/monetary20250129a.htm

Going forward returning federal employees to offices five days a week could positively impact office occupancy, according to Colliers.

However, initiatives to reduce overall leased space could negatively affect markets with a significant federal presence.

Opportunities for the private sector to buy federally owned properties could stimulate redevelopment or conversion to another use, primarily if local municipalities assist with efforts to streamline approvals.

Capital markets have been rebounding, noted Colliers.

Price adjustments are leading investors back into the office market.

While sales are not at pre-pandemic levels, Colliers noted that volume topped $21 billion in the fourth quarter, nearing year-end 2022 levels.

Total sales increased 36% compared to one year ago, with central business district activity rebounding.

Office sales have more than doubled from one year ago and have had the largest quarterly volume since first-quarter 2022.

For December 2025, the Federal Funds Rate was 3.72%, a decrease of 116 basis points from 2024, which ended the year at a rate of 4.88%.

As of January 2026, the current market rate for fixed-rate mortgages ranged from 5.52% to 6.25%, while commercial real estate rates hovered between 5.17% to 6.50%, depending on the building type.

While these rates reflect a decrease in the cost of borrowing for buyers and certain market observers believe there is a reasonable expectation for rate cuts in 2026, the credit market for 2026 may prove immobile due to long term expectations about the market, as noted by JP Morgan in its 2026 projections:

“While markets are pricing short-term interest rates to come down by 0.5-0.75% over the coming year, mortgage rates and longer-term rates might stay elevated as fiscal concerns weigh on the long end of the yield curve.

This could be an environment that keeps construction restricted and rewards patient capital investing in supply-constrained markets."

The trepidation about changes to long term credit market rates aligns with what can be observed in the Federal Reserve’s policy outlook for 2026 and beyond;

according to reporting published by the Congressional Research Service, the Federal Reserve has positioned itself to pursue a “neutral policy” in relation to its targets for the Federal Funds Rate, and its internal modeling suggests that current rates would fit the bill of neutrality, despite the relative ambiguity of that modeling.

Though past behavior is not an indicator of future decisions, forecasting modest movements from the Federal Reserve would align with its historical response to competing concerns about inflation and unemployment, as seen below:

As modestly decreased interest rates would be advantageous for our purposes, it is worth noting that decreased rates would not necessarily translate to loan refinancing or new mortgages, as these rates vary across properties and depend on a variety of performance indicators including but not limited to cash flows, occupancy rates, and lender credit.

SECTOR SPECIFIC OUTLOOKS

Colliers Securities notes the following for the primary real-estate sectors in their 2026 outlook for the US:

Multifamily and Industrial/Logistics (IL):

improved development pipelines have allowed both sectors to grow, which could in theory create the conditions for further improvement in fundamental metrics.

The multifamily sector specifically shows signs of increased opportunity while reduced supply constraints have the potential to increase transactions within the IL sector.

high vacancy rates have muddied signals of recovery and increased demand across multiple regional markets, making properties expensive to both acquire and maintain occupancy.

As it pertains to the wider housing market, the general indicators for 2026 market expectations largely reflect the same uncertainty felt across the broader US economy.

According to the National Association of Homebuilders' housing market sentiments rose in Q4 of 2025 and fell slightly in January of 2026, as sales conditions, short term (6 month) sales expectations, and prospective buyer traffic collectively fell.

As of January, homebuilder sentiment was at a value of 37 out of 100, which reflects an overall negative outlook about the expectations for and demand of single-family home sales over the next six months.

Though the January report reflects a broadly pessimistic near-term outlook, the current trend line for 2026 falls within the range of index scores observed over the past 24 months, with homebuilder sentiment charting as high as 44 as of January 2024 on the index and as low as 32 as of June 2025.

In the context of our business operations, specifically our model homes segment, overall builder sentiment offers an understanding of the broader macroeconomic trends for the housing market but is nonspecific to model homes, thus limiting its utility to general forecasting about broader market forces.

MANAGEMENT EVALUATION OF RESULTS OF OPERATIONS

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Our results of operations for the years ended December 31, 2025 and 2024 may not be indicative of those expected in future periods.

Management does not expect the level of administrative expenses related to the 2024 annual meeting and the switching external auditors will be repeated in 2025.

Additionally 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, elevated real estate prices in commercial real estate, increasing interest rates on lending, and compressing capitalization rates have made it challenging to acquire properties during 2024 that fit our portfolio needs.

During 2025, stagnations in previously rising commercial real estate prices, slow-to-decrease interest rates, and compressing capitalization rates across the US have made it challenging to acquire properties during 2025 that fit our portfolio needs.

As a result, we did not find any suitable commercial properties to acquire during 2025, but we were able to acquire 22 Model Home Properties.

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Impairment is recognized on a property held for sale when the fair value less costs to sell is less than the carrying amount.

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 assumptions such as the intended hold period, market rental rates, leasing assumptions, capitalization rates and discount rates.

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 assumptions, including but not limited to, the terminal capitalization 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.

Goodwill and Intangible Assets .

Intangible assets, including goodwill and lease intangibles, are comprised of finite-lived and indefinite-lived assets.

Lease intangibles represent the allocation of a portion of the purchase price of a property acquisition representing the estimated value of in-place leases, unamortized lease origination costs, tenant relationships and land purchase options.

Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives.

Indefinite-lived assets are not amortized.

We test for impairment of goodwill and other definite and indefinite lived assets at least annually, and more frequently as circumstances warrant.

Impairment is recognized only if the carrying amount of the intangible asset is considered to be unrecoverable from its undiscounted cash flows and is measured as the difference between the carrying amount and the estimated fair value of the asset.

Real Estate Held for Sale.

We generally reclassify assets to "held for sale" when the disposition has been approved, it is available for immediate sale in its present condition, we are actively seeking a buyer, and the disposition is considered probable within one year.

Additionally, real estate sold during the current period is classified as “real estate assets held for sale” for all prior periods presented in the accompanying consolidated financial statements.

Mortgage notes payable related to the real estate sold during the current period are classified as “mortgage notes payable related to properties held for sale” for all prior periods presented in the accompanying consolidated financial statements.

Additionally, we record the operating results related to real estate that has been disposed of as discontinued operations for all periods presented if the operations have been eliminated and represent a strategic shift and we will not have any significant continuing involvement in the operations of the property following the sale.

Properties considered held for sale are recorded at the lesser of the carrying value or fair value less costs to sell.

As of December 31, 2025, only one commercial property, Dakota Center, met the criteria to be classified as "held for sale," and five model homes were classified as "held for sale" but are not considered discontinued operations or a strategic shift in our operations.

Fair Value Measurements .

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When we determine the market for a financial instrument owned by us to be illiquid or when market transactions for similar instruments do not appear orderly, we use several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establish a fair value by assigning weights to the various valuation sources.

As of December 31, 2024 and December 31, 2023, 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, respectively, with a cost basis of approximately zero and $40,315, 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 as of December 31, 2024, with a cost basis of approximately $7.5 million.

When determining the fair value of real estate assets, goodwill and other liabilities the Company refers to the guidance in ASC 820.

The term “Fair Value” is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (ASC 820-10-20).

In particular, ASC 820 prescribes that the measurement of the Fair Value of an asset or liability should be based on assumptions that market participants would use when pricing the asset or liability.

Accordingly, the Company’s determination of the Fair Value measurements detailed above is based on the price that would be received to sell an asset or transfer a liability at the measurement date, assuming a transaction takes place at that date (i.e., an exit price).

As of December 31, 2025 and December 31, 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 zero, respectively, with a cost basis of approximately zero and 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 $3,900 as of December 31, 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.

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Impairment Loss

Goodwill for Dubose Model Homes

Goodwill for NTR Property Management

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Impairment Loss

Goodwill for Dubose Model Homes

Goodwill for NTR Property Management

Certain Real Estate assets

Additionally, when determining the fair value of a liability in circumstances in which a quoted price in an active market for an identical liability is not available, we measure fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach.

Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values.

In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument.

RESULTS FROM OPERATIONS FOR THE YEARS ENDED December 31, 2025 AND 2024

Our results from operations for 2025 and 2024 are not indicative of those expected in future periods as we expect that rental income, interest expense, rental operating expense, general and administrative expenses, and depreciation and amortization will significantly change in future periods as a result of the assets sold over the last two years.

Total revenue was approximately $18.9 million for the year ended December 31, 2024, compared to approximately $17.6 million for the same period in 2023, an increase of approximately $1.3 million or 7.3%.

As of December 31, 2024, we had 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 at December 31, 2023.

Total revenue was approximately $16.8 million for the year ended December 31, 2025 compared to approximately $18.9 million for the same period in 2024, a decrease of approximately $2.1 million or 11.2%.

As of December 31, 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 on December 31, 2024.

The average number of model homes held during the years ended December 31, 2025 and 2024 was 79 and 94, respectively.

The change in revenue is directly related to the increase in model home transaction fees during the current period, new commercial real estate leases, mainly at Grand Pacific Center, and the management fees earned from Conduit during the current period, which was terminated in June 2024.

The change in revenue is directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 6, 2025.

Below is additional revenue and asset information for real estate segments as of December 31, 2025 and December 31, 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.

% of Gross Revenue for the year ended

Office/Industrial

Other Non-Segment & Consolidating Items

% of Total Real Estate Assets as of

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Rental Operating Costs .

Rental operating costs were approximately $6.3 million for the year ended December 31, 2024 compared to approximately $6.0 million for the same period in 2023, an increase of approximately $0.3 million or 4.9%.

Rental operating costs were approximately $6.2 million for the year ended December 31, 2025 compared to approximately $6.3 million for the same period in 2024, a decrease of approximately $0.1 million or 1.6%.

Rental operating costs as a percentage of total revenue were 36.6% and 33.1% for the years ended December 31, 2025 and 2024, respectively, as office property expenses continue to increase, specifically insurance costs.

As of December 31, 2024 our model home assets made up 29% of our total real estate assets, which is down from 35% as of December 31, 2023, and our gross revenue from model home assets represented approximately 23.4% of our total revenue.

This percentage is expected to increase in 2025 as the percentage of our model home real estate assets has increased, with the sale of Union Town Center and Research Parkway in February 2025, which will reduce future rental income until those proceeds are reinvested but it will also reduce rental operating costs.

The sale of our Dakota Center building will also reduce rental operating costs.

As of December 31, 2025 our model home assets made up 33.8% of our total real estate assets, which is up from 29.3% as of December 31, 2024, and our gross revenue from model home assets represented approximately 23.5%of our total revenue.

This percentage is expected to increase in 2026 as the percentage of our model home real estate assets has increased, with the sale of Dakota Center in 2026 and the status of Shea Center II;

however, if we purchase additional properties during 2026, our rental operating costs could increase.

As for our commercial properties, we expect operating costs to decrease by $2.5 million as a result of the Dakota Center sale and the loss of Shea Center II.

General and Administrative .

General and administrative (“G&A”) expenses were approximately $7.5 million for the year ended December 31, 2024, compared to approximately $6.8 million for the same period in 2023, representing an increase of approximately $0.7 million or 10.8%.

General and administrative (“G&A”) expenses were approximately $5.7 million for the year ended December 31, 2025, compared to approximately $7.5 million for the same period in 2024, representing a decrease of approximately $1.8 million or 24.2%.

As a percentage of total revenue, our general and administrative costs were approximately 33.9% and 39.8% for the years ended December 31, 2025 and 2024, respectively.

G&A expenses increased by approximately $0.5 million mainly related to the 2024 annual meeting and settlement with Zuma Capital and certain individuals and entities affiliated or associated with Zuma Capital Management, LLC ("Zuma Capital").

This included additional consulting fees, higher proxy solicitation fees and legal fees, which increased by an aggregate of approximately $0.6 million in 2024 as compared to 2023.

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.

G&A expenses comparatively decreased in 2025, largely due 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").

The comparative decline was also due to additional consulting fees, higher proxy solicitation fees, and legal fees in 2024, all of which decreased by an aggregate of approximately $0.6 million in 2025 as compared to 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.

Depreciation and Amortization .

Depreciation and amortization expenses were approximately $4.9 million for the year ended December 31, 2025, compared to approximately $5.5 million for the same period in 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, we recognized a non-cash impairment charge of approximately $2.0 million on goodwill and our real estate assets.

Of the $2.0 million impairment for the year, approximately $1.4 million was related to our commercial properties Dakota Center and 300 NP, approximately $0.4 million was related to model homes, and approximately $0.2 million was related to goodwill impairment.

The impairment on our commercial property, Dakota Center, was the result of the loan maturing in July and 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 reflects the estimated and actual sales prices for these specific model homes that were sold after the end of each quarter.

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.

During the year ended December 31, 2025, we recognized a non-cash impairment charge of approximately $6.4 million on our real estate assets.

Of the $6.4 million impairment for the year, approximately$6.0 million was related to our commercial properties Shea Cener II and Dakota Center, approximately $0.3 million was related to model homes, and approximately $0.1 million was related to goodwill impairment.

The impairment on Shea Center II was primarily related to suboptimal occupancy levels and the near term conditions of the Denver market conditions, while the new impairment charges for the model homes reflect the estimated and actual sales prices for these specific model homes.

This was the result of an abnormally short hold period, less than two 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, 2025, we sold 20 model homes for approximately $9.8 million and the Company recognized a gain of approximately $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.

During the year ended December 31, 2023, we recognized a non-cash impairment charge of approximately $3.2 million related to goodwill and model homes.

Previously for the year ended December 31, 2024, we recognized a non-cash impairment charge of approximately $2.0 million related to goodwill and model homes.

Of the $2.0 million impairment for the year, approximately $1.4 million was related to our One Park Center property, approximately $0.4 million was related to eight model homes, and approximately $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.

Interest Expense-mortgage notes.

Interest expense, including amortization of deferred finance charges was approximately $6.1 million for the year ended December 31, 2024 compared to approximately $5.0 million for the same period in 2023, an increase of approximately $1.0 million, or 20.9%.

The increase in mortgage interest expense relates to the increase in weighted average interest rate from 5.18% to 5.63% over the same time period.

With the sale of our commercial properties in 2025, we will expect interest expense to decrease.

Interest expense, including amortization of deferred finance charges, was approximately $6.1 million for the year ended December 31, 2025.

This value is unchanged from the $6.1 million in interest expense incurred for December 31, 2024.

As of December 31, 2025 we carried total debt of $92.1 million which reflects a decrease of 9.8% from the year ended December 31, 2024.

Simultaneously, the weighted average of our interest expenses increased from 5.63% as of December 31, 2024 to 6.16% for the year ended December 31, 2025.

We expect these costs to decrease for 2026, as approximately $1.3 million of our current interest expenses were driven by Shea Center II and Dakota Center.

Gain on Sale of Real Estate Assets.

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Income allocated to non-controlling interests.

Income allocated to non-controlling interests for the years ended December 31, 2024 and 2023 totaled approximately $2.5 million, and $3.0 million, and was directly impacted by the sale of 18 and 13 model homes, during the years ended December 31, 2024 and 2023, respectively, held by our Model Home Partnerships.

Gain on deconsolidation of SPAC and remeasurement.

On April 22, 2024, the Company entered into a lockup agreement with Conduit pursuant to which the Company agreed not to transfer or sell 2,700,000 of its 4,015,250 shares of Conduit common stock for a period of one year.

In consideration for entering into the lockup agreement, Conduit issued the Company warrants to purchase 540,000 shares of common stock at an exercise price of $3.12 per share, a two year term and exercisable one year after the date of issue (the "Private CDT Warrants").

The Private CDT Warrants meet the ASC 321 scope exception for derivative instruments and are accounted for as a derivative under ASC 815.

As such, the Private CDT Warrants were recorded at fair value on the date of issuance and subsequently measured at fair value each period, with changes in fair value reported in gain or loss on Conduit marketable securities.

As of April 22, 2024, the Private CDT Warrants were valued at $891,000 based on a Level 3 fair value measurement.

As of December 31, 2024, the Private CDT Warrants fair value was adjusted to zero, which is included in the total Investment in Conduit marketable securities on the December 31, 2024 consolidated balance sheet.

Our investments in Conduit's common stock (2,944,514 shares of CDT) and public common stock warrants (709,000 warrants of CDTTW) presented on the consolidated balance sheets were measured at fair value using Level 1 market prices, 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 as of December 31, 2024.

The combined value of our Investment in Conduit marketable securities, including the Private CDT Warrants, totaled $0.2 million as of December 31, 2024, resulting in a net loss on investment for the year ended December 31, 2024 totaling approximal $17.9 million.

During the year ended December 31, 2023, and in connection with the deconsolidation we recorded a gain of approximately $40.3 million.

Of the total gain recognized on deconsolidation, approximately $34.1 million relates to the remeasurement of our retained investment in Murphy Canyon via the Sponsor shares which converted into shares of Conduit's common stock on September 22, 2023, and approximately $6.2 million relates to the deconsolidation of Murphy Canyon's assets and liabilities as of September 22, 2023.

Since deconsolidating Conduit, on September 22, 2023, our investments in Conduit's common stock and common stock warrants presented on the consolidated balance sheets were measured at fair value totaled approximately $18.3 million as of December 31, 2023, with a cost basis of approximately $7.5 million.

This resulted in net loss on investment for the year ended December 31, 2023 totaling approximal $23.4 million.

During October 2024, the Company paid part of an accrued bonus to the former CFO with shares of CDT common stock.

The total number of CDT common stock shares transferred to our former CFO was 1,045,805 shares at $0.1087 per share with a fair market value of $113,679 at the time of transfer.

After the transfer the Company still owned 2,944,514 shares of CDT common stock, 709,000 CDTTW warrants and 540,000 private warrants.

Since December 31, 2024, CDT has affected a 1-for-100 reverse stock split of the CDT common stock, resulting in our 2,944,514 shares being converted into 29,445 shares.

Income allocated to non-controlling interests for the years ended December 31, 2025 and 2024 totaled approximately $0.7 million, and $2.5 million, respectively, and was directly impacted by the sale of 6 and 18 model homes held by our Model Home Partnerships during the years ended December 31, 2025 and 2024, respectively.

Geographic Diversification Tables

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Our short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of our existing mortgages, completing tenant improvements, paying leasing commissions, and funding dividends to stockholders.

Future principal payments due on our mortgage notes payables during 2025, total approximately $38.8 million, of which $8.3 million is related to model home properties.

During the next 12 months our four commercial property loans, Dakota Center, Research Parkway, Union Town Center, Genesis Plaza and Shea Center II, have mortgage loans with maturity dates, totaling approximately $30.1 million.

The Dakota Center loan matured in July 2024, and will be settled when the property is sold, which is expected to sell in the next 12 months.

Management has begun discussions with various lenders to either restructure, extend or refinance these loans.

Additionally, management may consider selling these properties if we are unsuccessful in extending the maturity dates or are unable to raise additional funds to pay these non-recourse loans in full.

Additional details for maturing loans are as follows:

Dakota Center (Fargo) (July 2024):

We have been in negotiations with the lender and their special servicer of the loan since May 2024 regarding an extension or modification of the non-recourse loan;

however, the lender's final decision was to have the Company sell the property on the open market with a real estate broker.

The current loan balance is approximately $9.1 million, and our book value is approximately $8.3 million, after a $0.7 million impairment taken in Q3 2024.

On October 17, 2024, we also provided an unsolicited offer from Edgewood Properties for $8.0 million, but the lender has asked the Company to conduct a market sale for the property to recover the maximum proceeds to repay the non-recourse loan.

The lender rejected this offer and we are proceeding with the open market sale.

In January 2025, we finalized the broker agreement with CBRE to sell the property.

CBRE has the property listed without a sales price, but has a cashflow model with the target sales price at $9.0 million.

The lender will have final say on approval of a purchase offer and closing price, so there can be no guarantee CBRE will be able to achieve a $9.0 million sales price.

Either way, this is a non-recourse loan and will not affect our future cash flow if it sells for less than the loan amount.

Union Town Center (January 2025) and Research Pkwy (January 2025):

We have listed the properties for sale as of December 31, 2024.

The Company was able to obtain a short term extension with the lenders in order to accommodate the close date for the sale.

The sale took place on February 6, 2025, with a price of $16,950,000 for both UTC and Research Parkway.

Internally, we allocated the purchase price at 80.2% to UTC and 19.8% to Research Parkway, based on total square feet, book value and adjusted book value to the liabilities and assets to be eliminated at the closing.

We received $6.37 million in cash proceeds from the sale and additional funds post-closing from the lender's reserve accounts.

One Park Centre – We have begun exploring refinancing options with our current broker at NorthMarq to pay off the current loan at maturity.

The property’s current occupancy is 85.7% and has positive cash flow.

During the year, we have invested approximately $275,000 in building and tenant improvements for the property.

Genesis Plaza – We have begun exploring refinancing options with our current broker at NorthMarq to pay off the current loan at maturity.

The property’s current occupancy is 95.6% and has positive cash flow.

During the year, we have invested approximately $74,000 in building and tenant improvements for the property, expanded the space for our tenant Meissner and extended the term of their lease to 2035, and reduced the space used by the Company.

On January 1, 2025, Meissner took possession of the expanded space and Genesis Plaza was 100% leased.

Shea Center II - We will begin exploring refinancing options with our current broker at NorthMarq to pay off the current loan at maturity during April and May.

The property’s current occupancy is 68.9% and has positive cash flow.

We are still working to fill the vacant Halliburton space.

During the year ended December 31, 2024, the Company has invested approximately $275,000 in building and tenant improvements for the property.

Future principal payments due on our mortgage notes payables during 2026, total approximately $30.0 million, of which $4.5 million is related to model home properties and approximately $16.4 million is related to our Shea Center II property in Colorado.

Management expects certain model homes will be sold, and that the underlying mortgage notes will be paid off with sales proceeds, while other mortgage notes will be refinanced as the Company has done in the past.

Additional principal payments will be made with cash flows from ongoing operations.

The non-recourse loan for Shea Center matured on January 5, 2026.

On January 14, 2026 the Dakota Center property sold to an unrelated third-party for approximately $5.1 million.

The lender received approximately $4.3 million from the sale of the property, which was applied to settle the net loan balance of approximately $8.9 million.

The Company was not responsible for the remaining balance on this non-recourse loan.

No other commercial property loans mature during 2026.

On January 21, 2026, the Company and NetREIT SC II, LLC, a subsidiary of the Company (the “Borrower” or "Shea Center"), received a notice (the “Default Notice”) from Wells Fargo Bank, National Association (the “Lender”) alleging that the Borrower’s failure to repay in full by January 5, 2026 the indebtedness owed under that certain promissory note dated as of December 24, 2015 issued to The Bancorp Bank (the “Original Lender”) in the original principal amount of $17,727,500 (the “Note”), the related loan agreement, dated as of December 24, 2015 by and between Borrower and the Original Lender (the “Loan Agreement”) and other related agreements (together with the Note and the Loan Agreement, the “Loan Documents”), constituted an event of default under the Loan Documents and alleging further that the Lender has the right to foreclose or partially foreclose certain real and personal property that the Borrower had pledged as security for the Note located in Douglas County, Colorado, known as the “Shea Center II” (the “Property”).

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 include the Company (the “Borrower Parties”) are 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 shall have possession of the Property and shall have 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 by surrendering the property into receivership in accordance with our agreements with the lender.

As a result of both the receivership on Shea Center and the sale of Dakota Center, we expect a net increase to our cash balances in 2026, as both properties placed substantial pressure on their respective segments, with negative or break even cash flows during the year ended December 31, 2025.

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.

Therefore, returning capital to stockholders through a repurchase program is an attractive use of capital currently.

Therefore, returning capital to stockholders through a repurchase program was an attractive use of capital.

On September 15, 2022, 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 expired in September 2023.

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During the year ended December 31, 2023, the Company repurchased 23,041 shares of our Series D Preferred Stock at an average price of approximately $16.06 per share, including a commission of $0.035 per share, and no shares of our Series A Common Stock, for a total cost of $0.4 million for the Series D Preferred Stock.

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 shall expire in December 2025.

During the year ended December 31, 2024, we repurchased 190,640 shares of our Series A Common Stock, for a total cost of $140,416, with an average price of approximately $1.10 per share, including a commission of $0.025 per share.

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 Tender Offer shares repurchased during April 2025 as noted below.

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.

On April 8, 2025, we commenced the Tender Offer, a fixed price self-tender offer to purchase for cash all odd lots plus up to 200,000 shares of the Company’s Series A common stock, par value $0.01 per share, properly tendered and not properly withdrawn prior to the expiration date, subject to the Company’s ability to increase the number of shares accepted for payment in the Tender Offer by up to 2% of the Company’s outstanding common stock (resulting in an increase of up to approximately 28,308 shares) without amending or extending the Tender Offer in accordance with rules promulgated by the SEC, at $6.80 per share, net to the seller in cash, less any applicable withholding taxes and without interest.

The Tender Offer expired at 11:59 pm, New York City time, on May 5, 2025.

Based on the final count by the depositary for the Tender Offer, 214,412 shares of Series A common stock were validly and successfully tendered and not properly withdrawn, including tenders of shares for which the tender was defective but for which the Company waived such defects.

Pursuant to the terms of the Tender Offer, the Company accepted for purchase 214,412 shares of Series A common stock, including 1,209 odd lot shares.

Total cash required to complete the Tender Offer was approximately $1,458,000, excluding fees and expenses related to the Tender Offer.

We believe that the Tender Offer provided an efficient mechanism to provide our stockholders who desired immediate liquidity with the opportunity to tender shares at a favorable price relative to the current market price and without incurring broker’s fees associated with most secondary market sales, while also providing a benefit to those stockholders who did not participate, as such stockholders automatically increased their relative percentage ownership interest in the Company and our future operations, including any liquidity events that we may have in the future.

Another purpose of the Tender Offer was to reduce the number of our issued and outstanding shares and to reduce or eliminate all of our odd lots.

Overall, we believe that the Tender Offer was a prudent use of our financial resources given our business profile, capital structure, assets and liabilities.

There can be no assurance that the Company will refinance loans, take out additional financing or capital will be available to the Company on acceptable terms, if at all.

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The following is a summary of distributions declared per share of our Series A Common Stock and for our Series D Preferred Stock for the years ended December 31, 2025 and 2024.

The Company intends to continue to pay dividends to our common stockholders on a quarterly basis, and on a monthly basis for the Series D Preferred stockholders going forward, but there can be no guarantee the Board of Directors will approve any future dividends.

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.

In accordance with the terms of the Series D Preferred Stock, the unpaid monthly dividends will continue to accrue at $0.19531 per share each month.

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.

The Board has not indicated when it will resume approving dividends on our Series A Common Stock.

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.

Quarter Ended

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Approximately $1.9 million of our cash and restricted cash balance is intended for capital expenditures on existing properties (including deposits held in reserve accounts by our lenders) over the next 12 months.

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 December 31, 2024, all our commercial properties, except 300 NP which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $76.8 million, collateralized by a total of 11 commercial properties with loan terms at issuance ranging from 5 to 10 years.

We intend to use the remainder of our existing cash and cash equivalents for asset/property acquisitions, reduction of principal debt, and general corporate purposes.

As of December 31, 2025, all our commercial properties, except 300 NP which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $67.3 million, collateralized by a total of nine 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 December 31, 2025 was approximately 5.78%, and our debt to estimated market value for our commercial properties was approximately 72.6%.

As noted above, during the next 12 months our four commercial property loans, Dakota Center, Research Parkway, Union Town Center, Genesis Plaza and Shea Center II, have mortgage loans with maturity dates, totaling approximately $30.1 million.

As of December 31, 2024, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $26.1 million, excluding loans eliminated through consolidation, collateralized by a total of 78 Model Homes.

As noted above, our only upcoming maturity date for 2026 is the Shea Center II mortgage loan, which totals a principal balance of approximately $16.4 million.

Subsequent to the year ended December 31, 2025, 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.

The Company has received notification that the Shea Center II property governed by this agreement will be moved into receivership, which will fulfill its obligation for this non-recourse loan.

In the year ended December 31, 2024, the non-recourse loan on the Dakota Center property matured on July 6, 2024.

During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt.

As of December 31, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet.

As of December 31, 2025, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $25.6 million, collateralized by a total of 80 Model Homes.

These loans generally have a term at issuance of three to five years.

As of December 31, 2025, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $320,056 and 7.15%, respectively.

Our debt to estimated market value on all our Model Home Properties is approximately 62.0%, excluding any loans eliminated through consolidation.

Our debt to estimated market value on all our Model Home Properties is approximately 55.6%.

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.

As of December 31, 2023, we had issued two promissory notes to our majority owned subsidiaries, Dubose Model Home Investors 202 LP and Dubose Model Home Investors 204 LP, for the refinancing of two Model Home Properties in Texas and Wisconsin, for approximately $0.5 million with interest rates ranging from 3.0% to 5.55% per annum and maturity dates between August 2024 and November 2025.

These notes payable and notes receivable, including interest expense and interest income related to these promissory notes, are eliminated through consolidation on our financial statements and were paid in full as of December 31, 2024.

Cash Flows for the years ended December 31, 2025 and December 31, 2024

Operating Activities:

Net cash used / provided by operating activities for the years ended December 31, 2024 and 2023 decreased by $2.2 million to approximately $0.7 million used from $1.4 million provided by.

Net cash provided / used by operating activities for the years ended December 31, 2025 and 2024 increased by $1.1 million to approximately $417,870 provided from $0.7 million used.

The change in net cash used in operating activities is mainly due to 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.

This included additional consulting fees, higher proxy solicitation fees and legal fees, which increased by an aggregate of approximately $0.6 million in 2024 as compared to 2023.

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.

With the sale of Dakota Center and the pending loss of our Shea Center property in Q1 2026, we expect operating cash flows to improve.

Investing Activities:

Net cash from investing activities for the year ended December 31, 2025 was approximately $13.5 million compared to cash provided by investing activities of approximately $12.9 million during the same period in 2024.

The change from each period was primarily related to the gross cash withdrawal of approximately $114.1 million during the first quarter of 2023 for SPAC redemptions.

There were no similar transactions during the year ended December 31, 2024.

Proceeds from the sale of real estate assets total approximately $24.8 million, which is up from the same period in 2023, net of selling costs, while cash used in real estate acquisition and capital improvement totaled approximately $12.0 million, for the year ended December 31, 2024, which is down from the same period in 2023.

Proceeds from the sale of real estate assets total approximately $25.6 million, which is up from the same period in 2024, net of selling costs, while cash used in real estate acquisition and capital improvement totaled approximately $12.1 million, for the year ended December 31, 2025, which is similar the same period in 2024.

On July 14, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”) for the purpose of raising approximately $2.05 million in gross proceeds for the Company.

Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering (the “Offering”), (i) 140,000 shares (the “Public Shares”) of its Series A Common Stock and (ii) pre-funded warrants to purchase up to 30,830 shares (the “Pre-Funded Warrant Shares”) of Series A Common Stock (the “Pre-Funded Warrants”).

Each Public Share and accompanying Pre-Funded Warrant were sold together at a combined offering price of $12.00.

The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $0.0001 and were exercised on July 14, 2025 in full.

The closing of the sales of the Securities pursuant to the Purchase Agreement occurred on July 15, 2025.

The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s offering expenses were approximately $1.7 million.

The Company has used and intends to use the net proceeds from the offering for working capital and for other general corporate purposes including to potentially acquire additional properties.

In addition, in connection with the Purchase Agreement, the Company and the Purchaser entered into an Amendment to Series A Common Stock Purchase Warrants (the “Amendment”).

The Amendment amends certain warrants to purchase 200,000 shares of Series A Common Stock purchased by the Purchaser on July 14, 2021 to (i) reduce the exercise price to $12.00 per share from $55 per share and (ii) extend the termination date to July 16, 2030 from July 16, 2026.

Pursuant to the Stock Purchase Agreement, the Company filed a resale registration statement to register the shares of Series A Common Stock underlying such warrants, which registration statement went effective on August 22, 2025.

We currently project that we could spend up to $1.9 million (some of which is held in deposits reserve accounts by our lenders) on capital improvements, tenant improvements and leasing costs for properties within our portfolio during the rest of the year.

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Net cash used in financing activities during the year ended December 31, 2025 was $14.5 million compared to $10.6 million provided by financing activities for the same period in 2024 and was primarily due to the following activities for the year ended December 31, 2025:

Proceeds from mortgage notes payable, net of issuance costs totaled approximately $22.3 million.

Proceeds from the issuance of Series D Preferred Stock, net of offering costs, totaled approximately $1.2 million.

Repayment of mortgage notes payable totaled approximately $27.9 million during the year ended December 31, 2024.

Distributions to noncontrolling interest of approximately $3.4 million during the year ended December 31, 2024.

Dividends paid to Series D Preferred Stockholders of approximately $2.2 million during the year ended December 31, 2024.

Proceeds from mortgage notes payable, net of issuance costs totaled approximately $18.9 million, a decrease of approximately $3.9 million for the same period in 2024.

Proceeds from the issuance of Series A Common Stock, net of offering costs, totaled approximately $1.7 million.

For the year ended December 31, 2024, proceeds from the issuance of common stock totaled an approximate value of $1.2 million.

Repayment of mortgage notes payable totaled approximately $28.9 million during the year ended December 31, 2025, an increase of nearly $1.0 million from the same period in 2024.

Distributions to noncontrolling interest of approximately $1.3 million during the year ended December 31, 2025, a decrease of approximately $2.4 million from the year ended December 31, 2024.

Cash used to repurchase our Series A Common Stock and Series D Preferred Stock totaled approximately $1.9 million.

For the same period in 2024, the Company used $0.2 million to repurchase both Series A Common Stock and Series D Preferred Stock.

Off-Balance Sheet Arrangements

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The Pre-Funded Warrants were exercised in full during August 2021 at a nominal exercise price of $0.10 per share.

The Common Stock Warrants have an exercise price of $5.50 per share, were exercisable upon issuance and will expire five years from the date of issuance.

In connection with this additional offering, we agreed to issue the Placement Agent Warrants to purchase up to 80,000 shares of Series A Common Stock, representing 4.0% of the Series A Common Stock and shares of Series A Common Stock issuable upon exercise of the Pre-Funded Warrants.

The Common Stock Warrants had an exercise price of $55.00 per share, exercisable upon issuance and will expire five years from the date of issuance.

In July 2025 the exercise price was adjusted to $12.00 per share and the term of the warrants extended to July 16, 2030.

In connection with the Series A Common Stock offering in July 2021, we agreed to issue the Placement Agent Warrants to purchase up to 8,000 shares of Series A Common Stock, representing 4.0% of the Series A Common Stock and shares of Series A Common Stock issuable upon exercise of the Pre-Funded Warrants.

The Placement Agent Warrants were issued in August 2021, post exercise of the Pre-Funded Warrants with an exercise price of $62.50 and will expire five years from the date of issuance.

10 unchanged sentences

If all the potential Series A Warrants outstanding at December 31, 2025, 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.

The prevailing inflationary environment has affected U.S.

The current inflationary environment has affected U.S.

consumers and the repercussions may persist.

17 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis