What changed in this filing

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Item 9A. Controls and Procedures

2026-03-27 compared with 2025-03-31 · 413 added, 493 removed, 1187 unchanged (43% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-14(c).

1 unchanged sentence

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

In connection with the preparation and audit of the financial statements as of and for the fiscal year ended December 31, 2024, our disclosure controls and procedures were effective and were operating at a reasonable assurance level.

s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in

Internal Control —

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on our evaluation under the framework in

Integrated Framework, our management concluded that our internal controls over financial reporting were effective as of

December 31, 2024.

This annual report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding our internal control over financial reporting as such report is not required for the Company.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2023, a material weakness was identified in our internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

This material weakness primarily related to a non-recuring significant transaction for income tax provision under ASC 740, Income Taxes , and comprised the following:

We lacked a formal review and approval process in connection with the annual income tax provision, specifically related to REIT and non-REIT subsidiaries and the ownership of Conduit shares received by the Company in the de-SPAC transaction on September 22, 2023.

We did not design adequate internal controls under an appropriate financial reporting framework, including monitoring controls and certain entity level controls with regards to the income tax provision.

We have implemented measures designed to improve our internal control over financial reporting to remediate this material weakness.

The material weakness is considered remediated and our remediation plan has been fully implemented, the applicable controls have operated for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively.

We commenced the remediation plan during 2024 and have documented such plan, followed with testing such controls over time.

We added controls around the calculation and preparation of income tax provisions and expenses, we engaged with third party experts, and continually identified and monitored the taxable status of each subsidiary for annual reporting.

There were no additional changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Furthermore, we do not believe that these controls have been impacted by COVID-19 related circumstances, including remote work arrangements with our employees.

Limitations on the Effectiveness of Controls

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.

Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.

Internal control over financial reporting also can be circumvented by collusion or improper management override.

Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

However, these inherent limitations are known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management’s Report on Internal Control over Financial Reporting

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).

Under the supervision and with the participation of our Management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on our evaluation under the framework in Internal Control — Integrated Framework, our Management concluded that our internal control over financial reporting was effective as of December 31, 2025.

OTHER INFORMATION

41 unchanged sentences

Articles Supplementary classifying and designating an additional 80,000 shares of the Series D Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on June 24, 2024).

Articles of Amendment effecting the reverse stock split (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 16, 2025).

Second Amended and Restated Bylaws of Presidio Property Trust, Inc.

25 unchanged sentences

Underwriting Agreement dated June 20, 2024, by and between the Company and The Benchmark Company, LLC (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K, filed with the Commission on June 24, 2024).

Form of Securities Purchase Agreement dated July 14, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 15, 2025).

Sales Agreement dated October 14, 2025, by and between the Company and The Benchmark Company, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 14, 2025).

Code of Ethics (incorporated by reference to Exhibit 14 of the Company’s Annual Report on Form 10-K filed on March 30, 2021).

Insider Trading Policy, effective September 19, 2022.*

Insider Trading Policy, effective September 19, 2022 and updated December 5, 2025.

Subsidiaries of the Registrant.*

Consent of Independent Registered Public Accounting Firm *

Certificate of the Company’s Chief Executive Officer (Principal Executive Officer) pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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March 27, 2026

March 31, 2025

/s/ Tracie Hager

15 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Presidio Property Trust, Inc (the “Company”) as of December 31, 2024, the related consolidated statements of operations, equity, and cash flows for the year then ended, and the related notes and financial statement Schedule III – Real Estate and Accumulated Depreciation and Amortization (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Presidio Property Trust, Inc.

(the “Company”), as of December 31, 2025 and 2024, the related consolidated statements of operations, equity, and cash flows for the years then ended, and the related notes and financial statement Schedule III – Real Estate and Accumulated Depreciation and Amortization (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the (consolidated) financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Real Estate Assets, net

The Company’s real estate assets, inclusive of real estate assets held for sale, totaled $127.6 million as of December 31, 2024.

The Company’s real estate assets, inclusive of real estate assets held for sale, totaled approximately $108.6 million as of December 31, 2025.

As more fully described in Note 2 to the consolidated financial statements, the Company reviews its real estate assets 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.

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.

For the year ended December 31, 2024, the Company recorded approximately $1.8 million of impairment related to its real estate assets.

We identified the auditing of the Company’s impairment assessment for real estate assets as a critical audit matter.

Auditing the Company’s impairment assessment for real estate assets is especially challenging due to the high degree of auditor judgement, subjectivity, and effort, including the need to involve our valuation specialists, in evaluating management’s identification of indicators of potential impairment for certain real estate assets, and in determining the future cash flows and estimated fair values, where applicable, for certain real estate assets where indicators of impairment were determined to be present.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming an overall opinion on the consolidated financial statements.

Our audit procedures related to the matter included the following, among others:

Evaluating the significant judgments applied in determining whether indicators of impairment were present, including the intended hold period, obtaining evidence to corroborate management’s judgments, and searching for evidence contrary to such judgments.

Determining fair value requires management to make estimates of future cash flows, which are based on a number of inputs and assumptions, including the terminal capitalization rate.

For the year ended December 31, 2025, the Company recorded approximately $6.4 million of impairment related to certain real estate assets.

We identified the auditing of the Company’s impairment assessment for certain real estate assets as a critical audit matter.

Auditing the Company’s impairment assessment for certain real estate assets is especially challenging due to the high degree of auditor judgement, subjectivity, and effort, including the need to involve our valuation specialists, in evaluating management’s estimated fair values for certain real estate assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to the impairment of certain real estate assets included the following, among others:

Testing the mathematical accuracy of the valuation models for certain real estate assets.

Involving our valuation professionals with specialized skills and knowledge in (1) evaluating the reasonableness of the valuation methodology and (2) testing the underlying assumptions such as the market rental rates, leasing assumptions, capitalization rates and discount rates used to estimate future cash flows and, where applicable, fair values for certain real estate assets.

The evaluation included comparison of Company assumptions to independently developed ranges using market data from industry transaction databases and published industry reports.

Evaluating whether the assumptions used by management were consistent with evidence obtained in other areas of the audit.

/s/ Moss Adams

Involving our valuation professionals with specialized skills and knowledge in (1) evaluating the reasonableness of the valuation methodology and (2) assessing the reasonableness of the terminal capitalization rate by comparing to independent market data.

/s/ Baker Tilly US, LLP

Irvine, California

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We have served as the Company’s auditor since 2009.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the board of directors of Presidio Property Trust, Inc.

and Subsidiaries:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Presidio Property Trust, Inc.

and Subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of operations, equity and cash flows, for the years then ended, and the related notes to the consolidated financial statements and schedule in Item 15 (2), Schedule III – Real Estate and Accumulated Depreciation and Amortization (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Baker Tilly US, LLP

Irvine, California

April 15, 2024 (March 31, 2025, as to the effects of the adoption of ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , described in Note 2)

We began serving as the Company's auditor in 2009.

In 2024 we became the predecessor auditor.

Presidio Property Trust, Inc.

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Rental income

$ 16,470,918 $ 18,523,813

Fees and other income

343,790 401,462

Total revenue

16,814,708 18,925,275

Costs and expenses:

Rental operating costs

6,158,052 6,256,077

General and administrative

5,704,830 7,526,675

Depreciation and amortization

4,862,267 5,515,518

Impairment of goodwill and real estate assets

6,443,437 1,969,311

Total costs and expenses

23,168,586 21,267,581

Other income (expense):

Interest expense - mortgage notes

( 6,050,437 ) ( 6,050,196 )

Interest and other income, net

20,881 ( 151,356 )

Gain on sales of real estate, net

5,444,792 3,426,572

Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)

Gain on deconsolidation of SPAC (see footnote 9)

( 188,287 ) ( 17,925,723 )

Income tax (expense) benefit

Total other (loss) income, net

Net (loss) income

( 463,170 ) ( 60,855 )

Total loss, net

( 1,236,221 ) ( 20,761,558 )

( 7,590,099 ) ( 23,103,864 )

Income attributable to noncontrolling interests

Net (loss) income attributable to Presidio Property Trust, Inc.

( 685,586 ) ( 2,524,665 )

Net loss attributable to Presidio Property Trust, Inc.

$ ( 8,275,685 ) $ ( 25,628,529 )

Preferred Stock Series D dividends

Net (loss) income attributable to Presidio Property Trust, Inc.

( 2,295,607 ) ( 2,236,696 )

Net loss attributable to Presidio Property Trust, Inc.

common stockholders

Net (loss) income per share attributable to Presidio Property Trust, Inc.

$ ( 10,571,292 ) $ ( 27,865,225 )

Net loss per share attributable to Presidio Property Trust, Inc.

common stockholders:

Basic & Diluted

$ ( 8.65 ) $ ( 22.50 )

Weighted average number of common shares outstanding - basic & dilutive

1,221,413 1,238,659

See Notes to Consolidated Financial Statements

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890,946 8,909 1,226,507 122,651 182,331,408 ( 131,508,785 ) 50,954,183 10,367,887 61,322,070

Dividends paid to Series A common stockholders

Net (loss) income

— — — — — ( 25,628,529 ) ( 25,628,529 ) 2,524,665 ( 23,103,864 )

Dividends to Series D preferred stockholders

— — — — — ( 2,236,696 ) ( 2,236,696 ) — ( 2,236,696 )

Distributions in excess of contributions received

— — — — — — — ( 3,429,964 ) ( 3,429,964 )

Restricted stock-based compensation

Remeasurement of SPAC shares to redemption value

Accrued excise tax on SPAC redemptions

Reversal of accrued excise tax on SPAC redemptions prior to deconsolidation

— — — — 1,379,080 — 1,379,080 — 1,379,080

Repurchase of Series A Common Stock, at cost

— — ( 19,065 ) ( 1,905 ) ( 138,511 ) — ( 140,416 ) — ( 140,416 )

Repurchase of Series D preferred stock, at cost

( 2,918 ) ( 29 ) — — ( 40,881 ) — ( 40,910 ) — ( 40,910 )

Issuance of preferred stock Series D preferred stock, net of issuance costs

109,054 1,091 — — 1,194,764 — 1,195,855 — 1,195,855

Issuance of Series A Common Stock

— — 8,623 862 1,051,717 — 1,052,579 ( 1,052,579 ) —

Vesting of Restricted Series A Common Stock

— — 65,884 6,588 ( 6,588 ) — — — —

Issuance of stock-based compensation Common Stock

Vesting of restricted stock

— — 16,409 1,640 198,360 — 200,000 — 200,000

Return of stock-based compensation by CEO

— — ( 14,926 ) ( 1,493 ) ( 198,507 ) — ( 200,000 ) — ( 200,000 )

Balance, December 31, 2024

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Net (loss) income

— — — — — ( 8,275,685 ) ( 8,275,685 ) 685,586 ( 7,590,099 )

Dividends to Series D preferred stockholders

— — — — — ( 2,295,607 ) ( 2,295,607 ) — ( 2,295,607 )

Distributions in excess of contributions received

— — — — — — — ( 1,277,913 ) ( 1,277,913 )

Restricted stock-based compensation

— — — — 1,138,585 — 1,138,585 — 1,138,585

Repurchase of Series A Common Stock, at cost

— — ( 16,080 ) ( 161 ) ( 76,931 ) — ( 77,092 ) — ( 77,092 )

Repurchase of Series A Common Stock, Tender Offer

— — ( 214,412 ) ( 21,441 ) ( 1,486,558 ) — ( 1,507,999 ) — ( 1,507,999 )

Par Value adjustment post 1 for 10 reverse split from $0.10 to $0.01

— — 505 ( 96,206 ) 96,206 — — — —

Repurchase of Series D preferred stock, at cost

Issuance of preferred stock Series D preferred stock, net of issuance costs

( 23,346 ) ( 234 ) — — ( 344,269 ) — ( 344,503 ) — ( 344,503 )

Issuance of Series A Common Stock

— — 176,577 1,765 1,694,697 — 1,696,462 — 1,696,462

Vesting of Restricted Series A Common Stock

Issuance of stock-based compensation Common Stock

Return of stock-based compensation by CEO

— — 84,137 842 ( 30,184 ) — ( 29,342 ) — ( 29,342 )

Balance, December 31, 2025

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Cash flows from operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

$ ( 7,590,099 ) ( 23,103,864 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

4,862,267 5,515,518

Stock compensation

Bad debt expense

1,138,585 1,379,080

Gain on sale of real estate assets, net

Gain on deconsolidation of SPAC investment

( 5,444,792 ) ( 3,426,572 )

Employee Bonuses paid with CDT stock

Net loss in Conduit Pharmaceuticals fair value marketable securities

188,287 17,925,723

Net loss (gain) in fair value marketable securities

Net change in fair value SPAC Trust Account

Impairment of goodwill and real estate assets

6,443,437 1,969,311

Amortization of financing costs

281,245 351,291

Amortization of below-market leases

Amortization of deferred leasing costs

( 4,753 ) ( 4,641 )

Straight-line rent adjustment

261,483 ( 152,722 )

Changes in operating assets and liabilities:

355,913 82,575

Deferred tax asset

75,257 48,117

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities for the SPAC

186,636 ( 1,001,301 )

Deferred leasing costs

( 148,148 ) ( 502,946 )

Accrued real estate taxes

Net cash (used in) provided by operating activities

( 187,448 ) 19,390

Net cash provided by (used in) operating activities

417,870 ( 728,060 )

Cash flows from investing activities:

Real estate acquisitions

( 9,444,465 ) ( 9,729,351 )

Additions to buildings and tenant improvements

( 2,703,012 ) ( 2,273,726 )

Investment in marketable securities

Proceeds from sale of marketable securities

Investment of SPAC IPO proceeds into Trust Account

Withdrawals from Trust Account for SPAC taxes

Withdrawals from Trust Account for Redemption of SPAC Shares

13,990 105,206

Proceeds from sales of real estate, net

25,625,377 24,767,052

Net cash provided by investing activities

13,491,890 12,866,819

Cash flows from financing activities:

Proceeds from mortgage notes payable, net of issuance costs

18,942,396 22,272,291

Payment of debt issuance costs

( 424,002 ) ( 335,724 )

Repayment of mortgage notes payable

( 28,862,783 ) ( 27,897,127 )

Payment of deferred offering costs

( 343,514 ) —

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Redemption of SPAC shares

( 1,277,913 ) ( 3,629,964 )

Contributions from noncontrolling interests

Issuance of Series A Common Stock, net of offering costs

Issuance of Series D Preferred Stock, net of offering costs

Repurchase of Series A Common Stock, at cost

( 1,585,091 ) ( 140,416 )

Repurchase of Series D Preferred Stock, at cost

( 344,503 ) ( 40,910 )

Dividends paid to Series D Preferred Stockholders

Dividends paid to Series A Common Stockholders

( 2,295,607 ) ( 2,236,696 )

Net cash used in financing activities

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Net (decrease) increase in cash equivalents and restricted cash

( 614,137 ) 1,526,068

Cash, cash equivalents and restricted cash - beginning of period

Cash, cash equivalents and restricted cash - end of period

8,036,496 6,510,428

$ 7,422,359 $ 8,036,496

Supplemental disclosure of cash flow information:

Interest paid-mortgage notes payable

$ 5,906,234 $ 5,371,017

Income taxes paid

$ 78,848 $ 46,511

Non-cash investing activities:

Paid building and tenant improvements from prior year

$ ( 207,847 ) $ ( 295,567 )

Private warrants from Conduit Pharmaceuticals

$ — $ 642,600

Non-cash financing activities:

Unpaid deferred offering costs

Payment of accrued bonus to ex-CFO with CDT stock

$ — $ 124,357

Distribution of CDT stock to employees

$ — $ 172,421

Unpaid building and tenant improvements

$ 361,261 $ 207,847

Dividends payable - Preferred Stock Series D

$ 190,220 $ 194,784

See Notes to Consolidated Financial Statements

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We were incorporated in the State of California on September 28, 1999, and in August 2010, we reincorporated as a Maryland corporation.

In October 2017, we changed our name from “NetREIT, Inc.” to “Presidio Property Trust, Inc.” Through Presidio Property Trust, Inc., its subsidiaries, and its partnerships, we own 12 commercial properties in fee interest, two of which we own as a partial interest in various affiliates, in which we serve as general partner, member and/or manager, and a special purpose acquisition company (until deconsolidation in September 2023) as noted below.

In October 2017, we changed our name from “NetREIT, Inc.” to “Presidio Property Trust, Inc.” Through Presidio Property Trust, Inc., its subsidiaries, and its partnerships, we own 10 commercial properties in fee interest, two of which we own as a partial interest in various affiliates, in which we serve as general partner, member and/or manager, and 80 model home residential properties as noted below.

The Company or one of its affiliates operates the following partnerships during the periods covered by these consolidated financial statements:

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The Company refers to these entities collectively as the "Model Home Partnerships".

As of December 31, 2025, Dubose Model Home Investors #202, LP, Dubose Model Home Investors #203, LP and Dubose Model Home Investors #206, LP had no remaining assets.

The Company has determined that the limited partnerships in which it owns less than 100% should be included in the Company’s consolidated financial statements as the Company directs their activities and has control of such limited partnerships.

Unit-based information used herein (such as references to square footage or property occupancy rates) is unaudited.

We have elected to be taxed as a REIT under Sections

860 of the Internal Revenue Code of

1986, as amended (the “Code”), for federal income tax purposes.

To maintain our qualification as a REIT, we are required to distribute at least

90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels, and diversity of stock ownership.

Provided we maintain our qualification for taxation as a REIT, we are generally

not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities.

We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), for federal income tax purposes.

To maintain our qualification as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels, and diversity of stock ownership.

Provided we maintain our qualification for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities.

If we fail to maintain our qualification as a REIT in any taxable year and are unable to avail ourselves of certain savings provisions set forth in the Code, all our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax.

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Future principal payments due on mortgage notes payables, during the year ended December 31, 2026 total approximately $ 30.0 million of which $ 4.5 million is related to model home properties.

Mortgage Notes Payable for additional information on the Dakota Center loan that matured on July 6, 2024.

Mortgage Notes Payable for additional information on the Dakota Center and Shea Center II loans.

Management expects certain model home properties can be sold, and that the underlying mortgage notes will be paid off with sales proceeds while other mortgage notes can be refinanced, as the Company has historically been able to do in the past with all model home properties.

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Concentration of credit risk with respect to tenant receivables is limited due to the large number of tenants comprising the Company’s rental revenue.

We have five commercial properties located in Colorado, four in North Dakota, one in Southern California, one in Texas and one in Maryland.

Our model home properties are concentrated in Texas with a few model homes in Florida and Arizona.

We had one tenant account for 6.07 % of total rental income for the year ended December 31, 2024 .

On December 31, 2022, the lease for our largest tenant at that time, Halliburton Energy Services, Inc.

("Halliburton"), expired.

Halliburton was located in our Shea Center II property in Colorado and did not renew the lease.

We placed approximately $ 1.1 million in a reserve account with our lender to cover future mortgage payments, if necessary, in connection with Halliburton's vacant space, none of which has been used as of December 31, 2024 .

This reserve amount is included in "Cash, cash equivalents and restricted cash" on the consolidated balance sheet.

Our management team is working to fill the 45,535 square foot space and has leased approximately 54% of the space as of February 2025 and has reviewed various proposals for the remaining 46%.

The following table sets forth certain information with respect to our top 10 tenants at our Office/Industrial and Retail Properties.

As of December 31, 2024 Tenant

Number of Leases

Annualized Base Rent

% of Total Annualized Base Rent

John Hopkins University

1 724,453 6.07 %

Finastra USA Corporation

1 543,600 4.55 %

KLJ Engineering LLC

1 536,080 4.49 %

MasTec North America, Inc.

1 371,106 3.11 %

1 342,692 2.87 %

Wells Fargo Bank, NA

1 300,838 2.52 %

Republic Indemnity of America

1 278,831 2.34 %

Nova Financial & Investment Corporation

1 275,071 2.30 %

Meissner Commercial Real Estate Services

1 270,015 2.26 %

Fredrikson & Byron P.A.

1 249,270 2.09 %

$ 3,891,956 32.60 %

( 1 ) Nova Financial & Investment Corporation was subleasing to OnPoint Medical Group Holdings, LLC (“OnPoint”), until their lease expired in January 2025.

Since October 2024, OnPoint had also been directly leasing a 2,543 square foot space in our Shea Center building.

In January 2025, OnPoint took over 11,831 square foot space from Nova Financial & Investment Corporation, signing an additional 3 -year lease for that space.

( 2 ) Genesis Plaza's occupancy at December 31, 2024 was at 95.6 %.

During the year, the Company invested approximately $74k in building and tenant improvements for the property, expanded the space for 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.

We have three commercial properties located in Colorado, four in North Dakota, one in Southern California, one in Texas and one in Maryland.

Our model home properties are concentrated in Texas with a few model homes in Tennessee and Arizona.

We had one tenant account for 6.90 % of base rental income for commercial properties for the year ended December 31, 2025 .

Conversely, one of our homebuilders accounts for approximately 15.9 % of our total revenue for the year ended December 31, 2025 , and accounted for 56 out of 80 of our model home leases as of December 31, 2025.

SIGNIFICANT ACCOUNTING POLICIES

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All significant intercompany balances and transactions have been eliminated in consolidation.

The consolidated financial statements also include the accounts of Murphy Canyon up until September 22, 2023, when it completed its business combination.

Murphy Canyon was a special purpose acquisition company ("SPAC") for which we served as the financial sponsor (as described herein), and which was deemed to be controlled by us as a result of our 65 % equity ownership stake, the overlap of three of our executive officers as executive officers of Murphy Canyon, and significant influence that we exercised over the funding and acquisition of new operations for an initial business combination (see Note 2, Variable Interest Entity).

All intercompany balances, prior to deconsolidation and loss of control on September 22, 2023, have been eliminated in consolidation.

The Company classifies the noncontrolling interests in the NetREIT Partnerships as part of consolidated net (loss) income in 2025 and 2024 and has included the accumulated amount of noncontrolling interests as part of equity since inception in February 2010.

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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, 2024 , three commercial properties, Union Town Center, Research Parkway, and Dakota Center met the criteria to be classified as "held for sale", and 9 model homes were classified as "held for sale", but are not considered discontinued operations or a strategic shift in our operations.

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.

The below tables include other non-real estate assets and liabilities related to real estate held for sale as of December 31, 2025 and December 31, 2024 .

As of December 31, 2025

Non real estate assets related to real estate held for sale

Cash equivalents and restricted cash

1,988,360 — 1,988,360

Deferred leasing costs

98,248 — 98,248

Other Assets, net

348,997 — 348,997

Total other assets

$ 2,435,605 $ — $ 2,435,605

Non real estate liabilities related to real estate held for sale

Accounts payable and accrued liabilities

276,827 — 276,827

Accrued real estate taxes

197,035 — 197,035

Total other liabilities

$ 473,862 $ — $ 473,862

December 31, 2024

Non real estate assets related to real estate held for sale

Cash equivalents and restricted cash

1,749,905 — 1,749,905

Deferred leasing costs

326,923 — 326,923

Other Assets, net

658,061 — 658,061

$ 2,734,889 $ — $ 2,734,889

Non real estate liabilities related to real estate held for sale

Accounts payable and accrued liabilities

482,628 — 482,628

Accrued real estate taxes

367,229 — 367,229

Total liabilities

$ 849,857 $ — $ 849,857

Impairments of Real Estate Assets.

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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.

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.

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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 year ended December 31, 2024 , we recognized non-cash impairment charges of approximately $ 1.8 million, with approximately $ 0.4 million related to model homes and approximately $ 1.4 million related to our commercial properties Dakota Center and 300 NP.

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 decided to impair the property’s book value, in accordance with ASC 360 - 10.

As such, for the year ended December 31, 2024, we recorded an impairment charge of approximately $ 0.7 million.

The impairment on 300 NP, totaling approximately $ 0.7 million, for the year ended December 31, 2024, related to changing cap rates in the area and low historical occupancy.

This property is not listed for sale and has no debt.

During the year ended December 31, 2025 , we recognized non-cash impairment charges of approximately $ 6.4 million, with approximately $ 0.3 million related to model homes and approximately $ 6.0 million related to our commercial properties.

The approximately $ 3.5 million of 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.

During the year ended December 31, 2025, the Company impaired Shea Center II for a total of approximately $ 2.5 million after low property occupancy triggered a cash management event under the terms of the loan agreement.

Intangible Assets .

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Indefinite-lived assets are not amortized.

Amortization expense of intangible assets that are not deemed to have an indefinite useful life was approximately and , respectively, for the years ended December 31, 2024 and 2023 and is included in depreciation and amortization in the accompanying consolidated statements of operation.

Amortization expense of intangible assets that are not deemed to have an indefinite useful life was approximately $ 0 and $ 0.3 million, respectively, for the years ended December 31, 2025 and 2024 and is included in depreciation and amortization in the accompanying consolidated statements of operation.

The Company is required to perform a 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.

For the year ended December 31, 2024, we have recorded an impairment charge to the goodwill of NTR Property Management for approximately $ 0.2 million.

For the year ended December 31, 2025, we have recorded an impairment charge to the goodwill of NTR Property Management for approximately $ 72,000 .

See Fair Value Measurements below for additional information.

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At December 31, 2025 and 2024 , unamortized deferred financing costs related to mortgage notes payable were approximately $ 0.7 million and $ 0.7 million.

For the years ended December 31, 2024 and 2023 , total amortization expense related to the mortgage notes payable deferred financing costs was approximately $ 0.4 million and $ 0.3 million, respectively.

For the years ended December 31, 2025 and 2024 , total amortization expense related to the mortgage notes payable deferred financing costs was approximately $ 281,245 and $ 351,291 , respectively.

Amortization of deferred financing costs are included in interest expense in the accompanying consolidated statements of operations.

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Deferred offering costs represent legal, accounting and other direct costs related to our offerings.

As of December 31, 2024 and 2023 , we have incurred approximately zero and $ 5,000 , respectively, in deferred offering costs as of the end of each period related to our registration statement on Form S- 3.

As of December 31, 2025 and 2024 , we have incurred approximately $ 279,603 and zero , respectively, in deferred offering costs as of the end of each period related to our registration statement on Form S- 3.

Income Taxes.

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As of December 31, 2025 , we did not hold any marketable securities, excluding our investments in Conduit's common stock and common stock warrants.

As of 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 consolidated balance sheets within other assets were measured at fair value using Level 1 market prices and totaled approximately $ 45,149 , with a cost basis of approximately $ 40,315 .

As of 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 consolidated balance sheets within other assets were measured at fair value using Level 1 market prices and totaled approximately zero , with a cost basis of approximately zero .

There were no financial liabilities measured at fair value as of December 31, 2025 and December 31, 2024 .

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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 Pharmaceuticals 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 , and is included in the total Investment in Conduit Pharmaceuticals marketable securities on the December 31, 2024 consolidated balance sheet.

Our investments in Conduit's common stock (CDT) and public common stock warrants (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 Pharmaceuticals marketable securities, including the Private CDT Warrants, totaled $ 0.2 million as of December 31, 2024 .

Our investments in Conduit's common stock and public common stock warrants presented on the consolidated balance sheet were measured at fair value using Level 1 market prices as of December 31, 2023 , and totaled approximately $ 18.3 million.

During the nine months ended September 30, 2025, we sold all of our remaining shares of CDT on the open market for a total of $ 13,990 .

As of December 31, 2025 and December 31, 2024, the Private CDT Warrants fair value, using Level 3 inputs, was zero for both periods, and is included in the total Investment in Conduit Pharmaceuticals marketable securities on the consolidated balance sheets.

Our investments in Conduit's public common stock warrants (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 $ 3,900 and $ 0.2 million as of December 31, 2025 and December 31, 2024, respectively.

The adjustments to the fair value of our investment in Conduit Pharmaceuticals marketable securities are recorded in net loss in Conduit Pharmaceuticals marketable securities on our consolidated statement of operations.

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Impairment Loss

Goodwill for Dubose Model Homes

$ - $ - $ 1,123,000 $ 1,123,000 $ -

Goodwill for NTR Property Management

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Impairment Loss

Goodwill for Dubose Model Homes

$ - $ - $ 1,123,000 $ 1,123,000 $ -

Goodwill for NTR Property Management

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Placement Agent Warrants

80,000 80,000

Series A Warrants

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In addition, in computing the dilutive effect of convertible securities, the Numerator is adjusted to add back the after-tax amount of interest recognized in the period associated with any convertible debt.

The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net earnings per share.

The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net loss per share.

For the year ended December 31, 2025 , the basic and diluted net loss per share was $ 8.65 , since all potentially dilutive securities were determined to be anti-dilutive, and for the year ended December 31, 2024 the basic and diluted net earnings per share are equivalent at $ 22.50 per share because the Company had incurred a net loss attributable to common stockholders causing any potentially dilutive securities to be anti-dilutive.

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Effective January 1, 2018, we adopted the guidance of ASC 610 - 20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610 - 20” ), which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business.

Generally, our sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610 - 20.

Asset sales are generally recognized when control of the asset being sold is transferred to the buyer.

As the assets are sold, their costs and related accumulated depreciation, if any, are derecognized with resulting gains or losses reflected in net income.

ASC 610 - 20 refers to the revenue recognition principles under ASU No.

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Revenue Recognition and Accounts Receivables .

We recognize minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured and record amounts expected to be received in later years as deferred rent receivable.

We recognize minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is probable and record amounts expected to be received in later years as deferred rent receivable.

The cumulative difference between lease revenue recognized under the straight-line method and contractual lease payments are recorded as deferred rent receivable within other assets the consolidated balance sheets.

Additionally, we recognize transaction fees associated with the leasing of our model homes on a straight-line basis over the term of the related leases and are included within rental income on our consolidated statement of operations.

If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or by us.

When we are the owner of the tenant improvements, rental revenue begins when the tenant takes possession or has control of the physical use of the leased space and any tenant improvement allowance, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed.

When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term.

Tenant improvement ownership is determined based on various factors, including, but not limited to:

whether the lease stipulates how a tenant improvement allowance may be spent;

whether the amount of a tenant improvement allowance is in excess of market rates;

whether the tenant or landlord retains legal title to the improvements at the end of the lease term;

whether the tenant improvements are unique to the tenant or general-purpose in nature;

whether the tenant improvements are expected to have any residual value at the end of the lease.

The Company’s lease revenue is impacted by the Company’s determination of whether improvements to the property, whether made by the Company or by the tenant, are landlord assets.

The determination of whether an improvement is a landlord asset requires judgment.

In making this judgment, the Company’s primary consideration is whether an improvement would be utilizable by another tenant upon the then-existing tenant vacating the improved space.

If the Company has funded an improvement that it determines not to be landlord assets, then it treats the cost of the improvement as a lease incentive.

For certain leases, the Company also makes significant assumptions and judgments in determining the lease term.

The lease term impacts the period over which the Company determines and records lease payments and also impacts the period over which it amortizes lease-related costs.

The Company considers all relevant factors that create an economic incentive for the lessee and uses judgment to determine if those factors, considered together, signify that the lessee is reasonably certain to exercise the option.

We record property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred.

Additional rent where we pay the associated costs directly to third -party vendors and are reimbursed by our tenants are recognized and recorded on a gross basis, with the associated expense recognized in property expenses or real estate taxes.

Because the timing and pattern of transferring rental revenue and related operating expense reimbursements to the lessee are the same, and our leases are classified as operating leases, we treat rental revenue and tenant recovery revenue as a single combined lease component.

Accordingly, operating expense reimbursements are reported within Rental Income on the Company’s consolidated statement of operations.

We make estimates of the collectability of our tenant receivables related to base rents, including deferred rent receivable, expense reimbursements and other revenue or income.

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When a tenant is in bankruptcy, we will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments.

Fees and other income primarily include amounts recorded in connection with transient daily parking and miscellaneous amounts that fall within the scope of ASC Topic 606, Revenue from Contracts with Customers, and are recognized as revenue at the point in time when control of the goods or services transfers to the customer and our performance obligation is satisfied.

Variable Interest Entity.

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We consolidate any VIE of which we are the primary beneficiary.

The Company was involved in the formation of an entity considered to be a VIE, prior to September 22, 2023, when Murphy Canyon completed its business combination.

The Company evaluated the consolidation of this entity as required pursuant to ASC Topic 810 relating to the consolidation of such VIE.

The Company’s determination of whether it is the primary beneficiary of the VIE is based in part on an assessment of whether or not the Company and its related parties have the power to direct activities of the VIE and are exposed to the majority of the risks and rewards of the entity.

Following the completion of the Murphy Canyon IPO in January 2022, we determined that Murphy Canyon was a VIE in which we had a variable interest because we participated in its formation and design, manage the significant activities, and Murphy Canyon did not have enough equity at risk to finance its activities without additional subordinated financial support.

We have also determined that Murphy Canyon's public stockholders did not have substantive rights, and their equity interest constituted temporary equity, outside of permanent equity, in accordance with ASC 480 - 10 - S99 - 3A.

As such, we have concluded that, prior to the business combination, we were the primary beneficiary of Murphy Canyon as a VIE, as we had the right to receive benefits or the obligation to absorb losses of the entity, as well as the power to direct a majority of the activities that significantly impacted Murphy Canyon's economic performance.

Since we were the primary beneficiary, Murphy Canyon was consolidated into our consolidated financial statements.

See Note 9 Investment in Conduit Pharmaceuticals for additional details regarding Murphy Canyon.

Shares Subject to Possible Redemption .

Given that the shares of Murphy Canyon Class A common stock issued to investors in its IPO were issued with other freestanding instruments (i.e., public warrants which were classified as permanent equity as described below), the proceeds and initial carrying value of the Class A common stock classified as temporary equity was allocated in accordance with ASC 470 - 20.

The Murphy Canyon Class A common stock was subject to ASC 480 - 10 - S99.

In addition, because it was probable that the equity instrument would become redeemable, we had the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it became probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occurred and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period.

We elected to recognize the accretion resulting from changes in redemption value immediately during the three months ended March 31, 2022, and every quarter since then, until September 22, 2023 as noted above.

See Note 9 Investment in Conduit Pharmaceuticals for additional details regarding Murphy Canyon.

In accordance with the Inflation Reduction Act of 2022, the Company accrues the expected excise tax obligation at the end of each reporting period as a cost of redeeming any shares as of that date.

In connection with the vote to approve the Charter Amendment Proposal for the SPAC, holders of 11,037,272 shares of SPAC Class A Common Stock properly exercised their right to redeem their shares of Class A Common Stock for the aggregate redemption amount of $ 114,068,280 .

As such the SPAC had recorded a 1 % excise tax liability in the amount of $ 1,140,683 during January 2023.

The liability did not impact the statements of operations or statement cash flows and is an offset against additional paid in capital, to the extent available, and accumulated deficit.

On September 22, 2023, Murphy Canyon completed its business combination with Conduit Pharma and shareholders and debtholders of Conduit Pharma were issued 65,000,000 shares of Conduit common stock.

The excise tax liability recorded in connection with the January 2023 redemptions was reversed in full by the issuance of Conduit shares on September 22, 2023.

Immaterial Error Corrections .

During the second quarter of 2024, management determined that its prior treatment of accruing restricted compensation expense as a liability and included in accounts payable and accrued liabilities on the consolidated balance sheets should be treated differently.

Management determined that the restricted stock compensation should be treated as equity and included in additional paid in capital in the Company’s accompanying consolidated balance sheet for the prior years in accordance with ASC 718.

Compensation - Stock Compensation .

Accordingly, the Company’s accompanying consolidated balance sheets and consolidated statements of changes in equity as of December 31, 2022 and December 31, 2023, respectively, and for the three months ended March 31, 2023, June 30, 2023, and March 31, 2024, respectively, reflects an adjustment to include restricted stock compensation.

On the balance sheet as of December 31, 2023, accounts payable and accrued liabilities reflects a reduction of $ 21,189 and additional paid-in capital reflects an increase of $ 21,189 .

On the consolidated statements of changes in equity, the three months ended March 31, 2023, June 30, 2023 and September 30, 2023 reflect the addition of restricted stock compensation of $ 232,106 , $ 228,657 , and $ 270,564 , respectively, and the three months ended March 31, 2024 includes restricted stock compensation of $ 317,077 .

The corrections did not affect Consolidated Statements of Operations or Consolidated Statements of Cash Flows in any prior periods.

During the third quarter of 2024, management determined that the consolidated statements of cash flows for the nine months ended September 30, 2023 and the year ended December 31, 2023, overstated the amount of cash outflows for building and tenant improvements as a portion of those additions were in accounts payable at the end of each period.

For the nine months ended September 30, 2023 and the year ended December 31, 2023, $ 850,918 and $ 295,567 , respectively, should have been disclosed as a supplemental disclosure of cash flow information as unpaid building and tenant improvements.

Additionally, management has determined that debt financing costs for the year ended December 31, 2023 totaling $ 246,557 should be reclassified from accounts payable and accrued liabilities to payment of debt financing costs under cash flows from financing activities on the consolidated statement of cash flows.

Thereby, increasing net cash provided by operating activities and reducing net cash provided by financing activities by $ 246,557 .

The net effect of adjusting unpaid building and tenant improvements and debt financings costs amounts to a $ 49,010 decrease to operating cash flows for the year ended December 31, 2023.

These errors impact the consolidated statement of cash flows and do not affect the consolidated balance sheets, consolidated statement of operations and consolidated statements of changes in equity.

As such, the Company’s consolidated statement of cash flows for the nine months ended September 30, 2023, reflects an adjustment to reduce cash outflows for unpaid building and tenant improvements.

For the nine months ended September 30, 2023, net cash provided by operating activities, as previously reported, of $ 488,137 was reduced by $ 850,918 and net cash provided by investing activities, as previously reported, of $ 128,168,785 was increased by $ 850,918 .

Additionally, the $ 295,567 of unpaid building and tenant improvements that were recorded in accounts payable as of December 31, 2023, and paid in January 2024, are included in the statement of cash flows for the year ended December 31, 2024 .

The effect of correcting the errors in operating and investing cash flows for unpaid building and tenant improvements for the three months ended March 31, 2024 was $ 48,207 and for the six months ended June 30, 2024 was $ 204,054 , which will be reflected in the Company’s interim financial statements the next time these periods are presented.

During the fourth quarter of 2024, management determined that its prior treatment of including amortization of model home transactions fees in fees and other income should be reclassified to rental income on the consolidated statement of operations.

For the years ended December 31, 2024 and 2023 the total fees reclassified amounted to $ 757,704 and $ 649,166 , respectively.

There was no change to total revenues in either period.

Reclassifications .

Certain prior year balance sheet, statement of operations and statement of cash flows accounts have been reclassified to conform with the current year presentation.

The reclassifications did not affect net income in the prior year's consolidated statement of operations.

Warrant Instruments SPAC.

Murphy Canyon accounted for warrants in accordance with the guidance contained in ASC 480 and FASB ASC 815, “Derivatives and Hedging”.

Under ASC 815 - 40 and ASC 840 warrants that meet the criteria for equity treatment are recorded in stockholder’s equity.

The warrants are subject to re-evaluation of the proper classification and accounting treatment at each reporting period.

If the warrants no longer meet the criteria for equity treatment, they will be recorded as a liability and remeasured each period with changes recorded in the statements of operations.

The warrants meet the criteria for classification as equity because they were not exercisable until after the SPAC business combination, which occurred on September 22, 2023, at which point the common shares are no longer redeemable and because they are indexed to Murphy Canyon's common stock and meet the other criteria for equity classification.

See Note 9 Commitments and Contingencies for additional details regarding Murphy Canyon / Conduit.

Subsequent Events.

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We have adopted ASU 2023 - 09 and have updated our financial statement disclosures accordingly;

In November 2023, FASB issued Accounting Standards Update ASU 2023 - 07, Segment Reporting , establishing improvements to reportable segments disclosures to enhance segment reporting under Topic 280.

This ASU aims to change how public entities identify and aggregate operating segments and apply quantitative thresholds to determine their reportable segments.

This ASU also requires public entities that operate as a single reportable segment to provide all segment disclosures in Topic 280, not just entity level disclosures.

The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and the amendments should be applied retrospectively to all periods presented in the financial statements.

We have adopted ASU 2023 - 07 and have updated our segment financial statement disclosures accordingly.

there was no material impact to our financial statement.

In March 2024, the SEC issued final climate-disclosure rules to enhance and standardize climate‐related disclosures by public companies.

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On April 4, 2024, the SEC voluntarily stayed the rules pending judicial review as a result of litigation.

In November 2024, FASB issued Accounting Standards Update ASU 2024 - 03, Income Statement — Reporting Comprehensive, Income — Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses (“ASU 2024 - 03” ).

On March 27, 2025, the SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions.

However, the Eighth Circuit may still rule on the legal challenges to the rules, and if so could decide to uphold the rules in whole or in part or remand them to the SEC for further consideration.

In November 2024, the FASB issued Accounting Standards Update ASU 2024 - 03, Income Statement — Reporting Comprehensive, Income — Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses (“ASU 2024 - 03” ).

This ASU is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).

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We have not yet adopted ASU 2024 - 03 and are currently evaluating the impact on our financial statement disclosures.

In December 2025, the FASB issued Accounting Standards Update 2025 - 11 - Interim Reporting (Topic 270 ), which focuses on improving interim reporting guidance by clarifying requirements and enhancing navigability for entities preparing interim financial statements under GAAP.

This aims to improve the guidance in Topic 270, Interim Reporting, by enhancing the clarity and navigability of the required interim disclosures.

This introduces the Disclosure Principle, requiring entities to disclose events that have a material impact on the entity since the end of the last annual reporting period.

Additionally, ASU 2025 - 11 creates a comprehensive list of required interim disclosures, consolidating them into Topic 270 rather than having them dispersed across various Codification Topics.

For public entities, the update is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

For all other entities, it is effective for interim reporting periods within annual reporting periods beginning after December 15, 2028.

Early adoption is permitted for all entities.

While we are currently evaluating the impact of this pronouncement, we do not expect it will have a material impact on our consolidated financial statements.

RECENT REAL ESTATE TRANSACTIONS

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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 :

During year ended December 31, 2024 , we disposed of the following properties:

• 22 model homes for approximately $ 11.7 million and the Company recognized a gain of approximately $ 3.2 million.

• 51 model homes for approximately $ 24.8 million net of sales costs, and the Company recognized a gain of approximately $ 3.4 million.

REAL ESTATE ASSETS

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The primary types of properties the Company invests in are office, industrial, retail, and triple-net leased model home properties.

We have five commercial properties located in Colorado, four in North Dakota, one in Southern California, one in Texas and one in Maryland.

Our model home properties are located in three states.

As of December 31, 2025 , the Company owned or had an equity interest in:

Eight office buildings and one industrial building (“Office/Industrial Properties”);

Three retail shopping centers (“Retail Properties”);

One retail shopping center (“Retail Property”);

80 model home residential properties (“Model Homes” or “Model Home Properties”), leased back on a triple-net basis to homebuilders, which are owned by five affiliated limited partnerships and one wholly-owned corporation, all of which we control.

During the third quarter of 2024, all of the model homes in Dubose Model Home Investors #202 and #206, LP had been sold.

As of December 31, 2025, all of the model homes in Dubose Model Home Investors #202, #203, and #206, LP had been sold.

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

• Eight office buildings and one industrial building,

• Three retail shopping centers, and

• 78 model homes.

A summary of the properties owned by the Company, including their lease intangibles, as of December 31, 2025 and 2024 is as follows:

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Colorado Springs, CO

8,922,943 8,918,742

West Fargo Industrial

3 unchanged sentences

Colorado Springs, CO

2,220,284 2,266,173

One Park Center

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$ 108,649,704 $ 127,596,500

Genesis Plaza is owned by

two tenants-in-common, NetREIT Genesis and NetREIT Genessis II, each of which own

43 %, respectively, and we beneficially own an aggregate of

92.0 %, based on our ownership of each entity.

100 % ownership of NetREIT Genesis and

81.5 % ownership of NetREIT Genesis II, and we have control of both entities.

2024, the Company completed a minority ownership conversion option as result of a death in a noncontrolling trust within NetREIT Genesis II.

The Company issued the trust

86,232 shares of SQFT Series A Common Stock in exchange for their

36.4 % ownership in NetREIT Genesis II, as per the original exchange agreement.

The non-recourse loan on the Dakota Center property matured on

July 6, 2024.

October 2024, management has agreed with the lender to sell the property to settle the loan balance.

Due to the uncertainties in the Fargo market, we have impaired the property’s book value and recorded an impairment charge of approximately

$ 0.7 million as of

September 30, 2024.

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

December 31, 2024 , the property was included in the real estate assets held for sale, net on the consolidated balance sheet.

Any purchase offers will be subject to lender approval.

Grand Pacific Center, Bismarck, ND, was removed from held-for-sale after signing a major lease with KLJ Engineering on

December 7, 2022 for approximately

33,296 usable square feet, a term of

122 months, and starting annualized rent of

KLJ Engineering moved into the building during

December 2023, with rent that commenced on

February 28, 2024.

September 30, 2024, Union Town Center and Research Parkway were listed for sale, and included in the real estate assets held for sale, net on the consolidated balance sheet as of

December 31, 2024 .

The sale of UTC and Research Parkway took place in

February 2025, to a single buyer for a combined sales price of

$ 16.95 million, and the Company recorded a combined gain of approximately

$ 4.0 million.

During the year ended

December 31, 2023, we recorded a

$ 2.0 million impairment charge for One Park Center that reflects management’s revised estimate of the fair market value based on sales comparable of like properties in the same geographical area as well as an evaluation of future cash flows or an executed purchase sale agreement.

No additional impairment was deemed necessary during the year ended

December 31, 2024 .

December 31, 2022, the lease for our largest tenant, Halliburton, expired.

Halliburton was located in our Shea Center II property in Colorado, and made up approximately

$ 536,080 of our annual base rent.

Halliburton did

not renew the lease and we placed approximately

$ 1.1 million in a reserve account with our lender to cover future mortgage payments, if necessary,

none of which has been used as of

December 31, 2024.

A portion of the proceeds from the sale of Highland Court were used in like-kind exchange transactions pursued under Section

1031 of the Code for the acquisition of our Mandolin property.

Mandolin is owned by NetREIT Palm Self-Storage LP, through its wholly owned subsidiary NetREIT Highland LLC, and the Company is the sole general partner and owns

61.3 % of NetREIT Palm Self-Storage LP.

( 8 ) Includes Model Homes listed as held for sale as of December 31, 2024 .

During the year ended December 31, 2024 , we recorded an impairment charge for model homes totaling $ 0.4 million, which reflects the estimated sales prices for these specific model homes.

Genesis Plaza is owned by two tenants-in-common, NetREIT Genesis and NetREIT Genessis II, each of which own 57 % and 43 %, respectively, and we beneficially own an aggregate of 92.0 %, based on our ownership of each entity.

We have 100 % ownership of NetREIT Genesis and 81.5 % ownership of NetREIT Genesis II, and we have control of both entities.

During July 2024, the Company completed a minority ownership conversion option as result of a death in a noncontrolling trust within NetREIT Genesis II.

The Company issued the trust 86,232 shares of SQFT Series A Common Stock in exchange for their 36.4 % ownership in NetREIT Genesis II, as per the original exchange agreement.

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.

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

During July 2025, the lender approved a purchase offer from a third party for $ 5,125,000 .

In connection with the approved sale, we have impaired the property’s book value and recorded an impairment charge of approximately $ 3.5 million for the year ended December 31, 2025 .

The sale was completed on January 14, 2026.

During February 2025, Union Town Center and Research Parkway were sold to a single buyer for a combined total of approximately $ 15.9 million, net of selling costs, and recognized a net gain of approximately $ 4.5 million, net of closing costs.

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.

A portion of the proceeds from the sale of Highland Court were used in like-kind exchange transactions pursued under Section 1031 of the Code for the acquisition of our Mandolin property.

Mandolin is owned by NetREIT Palm Self-Storage LP, through its wholly owned subsidiary, NetREIT Highland LLC, and the Company is the sole general partner and owns 61.3 % of NetREIT Palm Self-Storage LP.

Includes Model Homes listed as held for sale as of December 31, 2025 and December 31, 2024.

During the year ended December 31, 2025 , we recorded impairment charges for model homes of approximately $ 0.3 million, which reflects the estimated sales prices for these specific model homes;

for the same period in 2024, we recorded $ 0.4 million in impairment.

The short hold period, less than two years, and the builder changing their model style after we purchased the homes, contributed to the lower-than-expected sales price.

As of December 31, 2025 , we had model home properties held for sale in Alabama, Arizona, Tennessee, and Texas.

As of December 31, 2024 , we had model home properties held for sale in Arizona, Florida, and Texas.

For the years ended December 31, 2025 and 2024 , depreciation and amortization expense, excluding amortization of deferred leasing cost, totaled approximately $ 4.4 million and $ 5.0 million, respectively.

As of December 31, 2025 and 2024 , construction in progress for tenant and building improvements totaled approximately $ 1.1 million and $ 0.4 million, respectively.

LEASE INTANGIBLES

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$ 3,467,798 $ ( 3,463,694 ) $ 4,104 $ 3,776,654 $ ( 3,756,877 ) $ 19,777

$ 3,776,654 $ ( 3,756,877 ) $ 19,777 $ 4,110,139 $ ( 4,072,836 ) $ 37,303

At December 31, 2025 and 2024 , there were no net lease intangible assets and accumulated amortization related to the lease intangible assets included in real estate assets held for sale.

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$ 1,591,206 $ 2,126,609

Accounts receivable, net

463,194 694,869

Prepaid expenses, deposits and other

477,738 406,494

Accounts receivable, net

391,281 463,194

Notes receivable

316,374 316,374

Deferred offering costs

Right-of-use assets, net

39,468 64,026

Deferred offering costs

Investment in marketable securities (not including Conduit)

Total other assets

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The writer of an option has no control over the time when it may be required to fulfill its obligation before the sold option expires, and once an option writer has received an exercise notice, it must deliver the underlying security in exchange for the strike price.

As of December 31, 2024 , we did not own common shares of any publicly traded REITs and no written covered call options in any of those same REITs.

As of December 31, 2023 , we owned common shares and options of 3 different publicly traded REITs and an immaterial amount of covered call options in zero of those same REITs.

The gross fair market value on our publicly traded REIT securities was $ 45,149 , with covered call options totaling $ 0 .

As of December 31, 2023 , the net fair value of our publicly traded REIT securities was $ 45,149 based on the December 31, 2023 closing prices.

As of December 31, 2025 and December 31, 2024 , we did not own common shares of any publicly traded REITs and no written covered call options in any of those same REITs.

MORTGAGE NOTES PAYABLE

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Research Parkway (3)

1,526,860 1,588,742 Fixed

3.94 % 1/5/2025

- 1,526,860 Fixed N/A N/A

Arapahoe Service Center

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Union Town Center (3)

7,709,746 7,870,468 Fixed

4.28 % 1/5/2025

- 7,709,746 Fixed N/A N/A

One Park Centre

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The non-recourse loan on the Dakota Center property matured on July 6, 2024.

Management has been in negotiations with the lender and their special servicer of the loan in modifying and/or extending the loan or possibly selling the building.

We have not been able to come to an agreement regarding a situation in which the loan is modified or extended.

As such, in October 2024, we have offered the property for sale in conjunction with the lender’s approval in attempts to make the lender whole, although there is no guarantee we will be able to do so.

The loan is considered non-recourse and we will not be required to make up the difference if the property sells for less than the loan balance.

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.

During July 2025, the lender approved a purchase offer from a third party for $ 5,125,000 .

The property was subsequently sold as of January 2026.

Real Estate Assets above for further discussion on impairment of the property.

( 3 ) On June 20, 2024, the Company, through its subsidiary, refinanced the mortgage loan on our West Fargo Industrial properties, and entered into a loan agreement for approximately $ 5.75 million, a term of five years, with an interest rate of 7.14 %.

The loan agreement has a Debt Service Coverage Ratio ("DSCR") minimum of 1.20 to 1.00 as calculated by Lender, in which:

(a) the numerator is the Underwritten Net Cash Flow, and (b) the denominator is the annual Debt Service, tested at the end of each fiscal quarter.

( 4 ) On May 5, 2023, the Company, through its subsidiary, refinanced the mortgage loan on our Grand Pacific Center property and entered into a construction loan related to the tenant improvement associated with the KLJ Engineering LLC lease to occupy 33,296 square feet of the building.

The refinanced loan is for approximately $ 3.8 million, a term of 10 years, with an interest rate of 6.35 %, for the first 60 months.

The interest rate is subject to reset in year five on June 10, 2028.

The construction loan is for approximately $ 2.7 million, a term of 10 years, and will begin amortizing in year three, with an interest rate of 6.35 %, for the first 60 months.

The interest rate is subject to reset in year five on June 10, 2028.

During the third quarter of 2024, we had fully drawn down the loan amount of approximately $ 2.7 million on the construction loan.

( 5 ) As of December 31, 2024 , there were 9 model homes included as real estate assets held for sale.

These properties were sold during February 2025 and their loan balances were paid in full.

Subsequent to the year ended December 31, 2025, the Company received a 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.

As of December 31, 2025 , there were five model homes included as real estate assets held for sale.

Our model homes have stand-alone mortgage notes at interest rates ranging from 5.94 % to 8.0 % per annum as of December 31, 2025.

( 6 ) These mortgage loans mature within the next twelve months and management is reviewing various options for the loan maturity, including but not limited to refinancing, restructuring and or selling these properties.

As we get closer to the loan maturity date, the Company will finalize our plans.

Union Town Center and Research Parkway have been listed for sale, and included in the real estate assets held for sale, net on the consolidated balance sheet as of December 31, 2024 .

These properties were sold to a single buy in February 2025 and their loans were paid in full.

The loan agreement between NetREIT Model, Homes, Inc.

(“NRMH”) and their Lender has a covenant for a Fixed Charge Coverage Ratio, (“FCCR”) as defined for NRMH as of any date (a) the sum of (i) EBITDA for the period ended as of such date minus (ii) Distributions for the period ended as of such date divided by (b) the sum of (ii) Principal Payments Paid for the period ended as of such date plus (iii) Interest Expense for period ended as of such date.

(“NRMH”) and its lender has a covenant for a Fixed Charge Coverage Ratio, (“FCCR”) as defined for NRMH as of any date that equals (a) the sum of (i) EBITDA for the period ended as of such date minus (ii) distributions for the period ended as of such date divided by (b) the sum of (ii) principal payments paid for the period ended as of such date plus (iii) interest expense for period ended as of such date.

The FCCR is to be no less than 1.10 to 1.00, tested at the end of each fiscal quarter.

As of December 31, 2025 , NRMH was in compliance with this covenant.

The Company and stand along subsidiaries have other various quarterly and annual reporting requirements to the individual property lenders and is in compliance with all material conditions and covenants on those mortgage notes payable as of December 31, 2024 .

The Company and standalone subsidiaries have other various quarterly and annual reporting requirements to the individual property lenders and is in compliance with all material conditions and covenants on those mortgage notes payable as of December 31, 2025 with the exception of Dakota Center's loan maturity and Shea Center's DSCR coverage.

Scheduled principal payments of mortgage notes payable were as follows as of December 31, 2025 :

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The loan matures on August 17, 2050.

We have used the funds for general corporate purposes to alleviate economic injury caused by the COVID- 19 pandemic, which economic injury included abating or deferring rent to certain tenants (primarily retail tenants).

We have used the funds for general corporate purposes to alleviate economic injury caused by the COVID- 19 pandemic, which economic damage included abating or deferring rent to certain tenants (primarily retail tenants).

As of December 31, 2025 and 2024 , the principal balance on SBA loan was approximately $ 140,674 and $ 144,089 , respectively.

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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.

The SPAC raised $ 132,250,000 in capital investment to acquire one or more businesses.

We, through our wholly-owned subsidiary, owned approximately 23.5 % 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).

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 warrants were evaluated using the guidance in ASC 480 "Distinguishing Liabilities from Equity" and we concluded that the warrants are indexed to Murphy Canyon's common stock and meet the criteria to be classified in stockholders' equity.

The Murphy Canyon IPO of 13,225,000 units of common stock and warrants, closed on February 7, 2022, raising gross proceeds for Murphy Canyon of $ 132,250,000 , including the exercise in full by the underwriters of their over-allotment option.

In connection with the IPO, we purchased, through the Sponsor, 754,000 placement units (the "placement units") at a price of $ 10.00 per unit, for an aggregate purchase price of $ 7,540,000 .

These proceeds were deposited in a trust account established for the benefit of the Murphy Canyon public shareholders and are included in Investments held in Trust.

In connection with the initial public offering, Murphy Canyon incurred $ 7,738,161 in issuance costs, including $ 2,645,000 of underwriting discounts and commission, $ 4,628,750 of deferred underwriting fees and $ 464,411 of other offering costs.

These costs were allocated to temporary and permanent equity and offset against the proceeds.

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.

The Company has committed to providing additional funds if needed to make such a deposit for the extension.

In connection with the stockholders' vote at the special meeting, 11,037,272 shares of common stock were tendered for redemption, which were redeemed in February 2023.

Approximately $ 114.1 million in cash was removed from the Trust Account to pay such stockholders and, accordingly, after giving effect to such redemptions, income tax withdraws of $ 200,050 and adding $ 155,403 in extension payments, the balance in the Trust Account was approximately $ 23.3 million.

After the redemptions, there were 2,187,728 shares of SPAC Class A common stock subject to possible redemption.

On January 27, 2023, the merger agreement was amended to provide for only one class of authorized common stock of the SPAC following the business combination, instead of both authorized Class A common stock and Class B common stock as set forth in the original merger agreement.

On May 11, 2023, the merger agreement was further amended to provide for (i) removal of the provision that indicates that no tax opinion would be delivered in connection with the closing, (ii) a closing obligation that that the SPAC either (a) be exempt from the provisions of Rule 419 promulgated under the Securities Act of 1933, as amended, other than through its net tangible assets or (b) have at least $ 5,000,001 of net tangible assets either immediately prior to or upon consummation of the merger, and (iii) extension of the outside date for the closing of the merger from May 31, 2023 to February 7, 2024.

The investments held in Trust for the SPAC Class A common stockholders generated approximately $ 1.2 million of income during the nine months ended September 30, 2023, and was included in interest and other income (expense), net on our consolidated statement of operations.

As of September 22, 2023, the Trust account balance had been deconsolidated along with the other Conduit assets and liabilities.

As of immediately prior to the consummation of the SPAC's business combination, which occurred on September 22, 2023, the Company, through its subsidiary, had loaned the SPAC $ 1.0 million to fund its trust account and for operating expenses.

The loan was non-interest bearing, unsecured and was repaid in full upon the SPAC's business combination on September 22, 2023.

The notes payable and notes receivable related to the SPAC were eliminated through consolidation on our financial statements.

On September 22, 2023, the SPAC 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, assuming all warrants owned by the Company were exercised and as of September 30, 2024, we currently own less than 1 % of Conduit's common stock, assuming all warrants owned by the Company are exercised.

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.

Following the completion of the Murphy Canyon IPO in February 2022, we determined that Murphy Canyon is a Variable Interest Entity ("VIE") in which we had a variable interest because Murphy Canyon did not have enough equity at risk to finance its activities without additional subordinated financial support.

Since the business combinations with Conduit on September 22, 2023, we have determined that Conduit's (formally Murphy Canyon) public stockholders have substantive rights and we no longer have control of Conduit's activity.

Since we are no longer the controlling party, or have a majority of the issued and outstating common stock, the Company deconsolidated Conduit from our consolidated financial statements.

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.

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

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 Pharmaceuticals 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 Pharmaceuticals 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.

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.

As of December 31, 2024, the Company, through our wholly-owned subsidiary Murphy Canyon Acquisition Sponsor, LLC (the "Sponsor"), owned 2,944,514 shares ("CDT") of Conduit, a publicly traded company, 709,000 public common stock warrants ("CDTTW") and 540,000 of Conduit private warrants, with a combined value of approximately $ 0.2 million.

On January 22, 2025, Conduit filed a certificate of amendment to the Company’s Second Amended and Restated Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effectuate a 1 -for- 100 reverse stock split (the “Conduit Reverse Stock Split”) of the outstanding shares of Conduit’s common stock.

The Conduit Reverse Stock Split became effective on January 24, 2025 at 5:00 p.m., Eastern Time (the “Effective Time”) and the new CDT shares began trading on The Nasdaq Global Market on a split-adjusted basis on January 27, 2025 at market open under the existing ticker symbol, “CDT.” As of the Effective Time, every 100 shares of the Conduit's issued and outstanding common stock was combined into one share of common stock.

After the Conduit Reverse Stock Split, our remaining shares of CDT totaled 29,445 , with the fractional shares being paid out in cash, totaling $ 0.63 .

During May 2025, the Company sold all the remaining shares of CDT common stock for $ 13,990 .

As of December 31, 2025 we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $ 3,900 .

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.

COMMITMENTS AND CONTINGENCIES

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As of December 31, 2025 , approximately $ 1.2 million is estimated for such capital expenditures on existing properties, net of any construction financing, during the rest of the year.

Activist stockholder activities could adversely affect our business because responding to proxy contests and reacting to other actions by activist stockholders can be costly and time-consuming, disrupt our operations and divert the attention of management and our employees.

We have or in the future may retain the services of various professionals to advise us on activist stockholder matters, including legal, financial, strategic and communication advisors, the costs of which may negatively impact our future financial results.

In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist stockholders' initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, business partners, and employees, and cause our stock price to experience periods of volatility or stagnation.

On March 13, 2024, a stockholder activist group announced its intention to file a preliminary proxy statement and accompanying WHITE universal proxy card with the Securities and Exchange Commission to be used to solicit votes for the election of director nominees at our next annual meeting of stockholders.

On May 9, 2024, the Company entered into a cooperation agreement with this stockholder group pursuant to which Elena Piliptchak was appointed to our board of directors, effective immediately, as a Class III director with a term expiring at Presidio's 2026 Annual Meeting of Stockholders.

In connection with this appointment, our board of directors has been increased from six to seven directors.

Pursuant to the agreement, the stockholder group agreed to withdraw the director nominations it had previously submitted and support our board's slate of directors at the 2024 Annual Meeting of Stockholders, which was held on June 27, 2024.

The stockholder group has also agreed to certain customary standstill provisions and voting commitments.

We have evaluated this contingency and have determined a material loss is not probable or estimable at this time.

Below is a 5 -year minimum base rent schedule for our commercial properties, excluding any variable payments:

Future minimum base rent for the Years Ended December 31,

Commercial Properties

$ 9,346,275 $ 2,097,845 $ 11,444,120

6,844,085 298,038 7,142,123

5,136,062 — 5,136,062

3,745,388 — 3,745,388

2,859,924 — 2,859,924

$ 27,931,734 $ 2,395,883 $ 30,327,617

From time to time, we may become involved in various lawsuits or legal proceedings which arise in the ordinary course of business.

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The Company has used these proceeds for general corporate and working capital purposes, including acquiring additional properties.

Below are some of the key terms of the Series D Preferred Stock:

On June 20, 2024, the Company entered into an underwriting agreement with The Benchmark Company, LLC, pursuant to which the Company issued and sold in an underwritten public offering 109,054 shares of the Company’s Series D Preferred Stock.

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The offering closed on June 24, 2024, generating gross proceeds of approximately $ 1.74 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

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

The Company has used the net proceeds from the offering for general corporate and working capital purposes, including the acquisition of additional properties.

Below are some of the key terms of the Series D Preferred Stock:

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Common Stock.

As of December 31, 2025, neither Mr.

Heilbron nor Mr.

Katz owned more than 9.8 % of our outstanding shares of common stock.

Effective on May 19, 2025, the Company amended its charter by filing Articles of Amendment with the State Department of Assessments and Taxation of Maryland in order to effect a 1 -for- 10 reverse stock split of its outstanding shares of common stock (the “Reverse Stock Split”).

As a result of the Reverse Stock Split, every 10 shares of the Company’s common stock issued or outstanding were automatically reclassified into one new share of common stock, par value $ 0.10 per share, subject to the treatment of fractional shares as described below, without any action on the part of the holders.

All historical share and per-share amounts reflected throughout the accompanying consolidated financial statements and other financial information in this Annual Report on Form 10 -K have been retroactively adjusted to reflect the 2025 Reverse Stock Split as if the split occurred as of the earliest period presented.

The Reverse Stock Split did not affect the number of authorized shares of common stock.

No fractional shares were issued in connection with the Reverse Stock Split.

Stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split were rounded up to the nearest whole share.

All equity awards and warrants outstanding immediately prior to the Reverse Stock Split were proportionately adjusted to reflect the Reverse Stock Split.

Effective immediately after the Reverse Stock Split, the Company decreased the par value of the shares of Series A Common Stock from $ 0.10 per share back to $ 0.01 per share.

On July 12, 2021, the Company entered into a securities purchase agreement with a single U.S.

institutional investor for the purchase and sale of 1,000,000 shares of its Series A Common Stock, Common Stock Warrants to purchase up to 2,000,000 shares of Series A Common Stock and Pre-Funded Warrants to purchase up to 1,000,000 shares of Series A Common Stock.

Each share of Common Stock and accompanying Common Stock Warrants were sold together at a combined offering price of $ 5.00 , and each share of Common Stock and accompanying Pre-Funded Warrants were sold together at a combined offering price of $ 4.99 .

The Pre-Funded Warrants were exercised in full during August 2021 at a nominal exercise price of $ 0.01 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.

The Company is authorized to issue up to 100,000,000 shares of Series A Common Stock, 1,000 shares of Series B Common Stock, and 9,000,000 shares of Series C Common Stock (collectively, the "Common Stock") each with $ 0.01 par value per share.

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The Company's charter contains restrictions on the ownership and transfer of the Common Stock that prevents one person from owning more than 9.8 % of the outstanding shares of common stock.

The Board of Directors approved our CEO, Jack Heilbron, and CIO, Gary Katz, an exception to the 9.8 % ownership limit and established an excepted holder limit permitting each of Jack Heilbron and Gary Katz to beneficially or constructively own up to 19 % of the outstanding shares of our common stock, including warrants, subject to compliance with Article VII of the Company’s charter.

The Board of Directors granted our CEO, Jack Heilbron, and CIO, Gary Katz, an exception to the 9.8 % ownership limit and established an excepted holder limit permitting each of Jack Heilbron and Gary Katz to beneficially or constructively own up to 19 % of the outstanding shares of our common stock, including warrants, subject to compliance with Article VII of the Company’s charter.

As of December 31, 2025, neither Mr.

Heilbron nor Mr.

Katz owned more than 9.8 % of our outstanding shares of common stock.

The Reverse Stock Split did not affect the number of authorized shares of common stock.

No fractional shares were issued in connection with the Reverse Stock Split.

Stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split were rounded up to the nearest whole share.

All equity awards and warrants outstanding immediately prior to the Reverse Stock Split were proportionately adjusted to reflect the Reverse Stock Split.

Effective immediately after the Reverse Stock Split, the Company decreased the par value of the shares of Series A Common Stock from $ 0.10 per share back to $ 0.01 per share.

On July 12, 2021, the Company entered into a securities purchase agreement with a single U.S.

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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 Warrant.

The Placement Agent Warrants were issued in August 2021, post exercise of the Pre-Funded Warrants with an exercise price of $ 6.25 and will expire five years from the date of issuance.

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.

The Company evaluated the accounting guidance in ASC 480 and ASC 815 regarding the classification of the Pre-Funded Warrant, Common Stock Warrants, and Placement Agent Warrants as equity or a liability and ultimately determined that it should be classified as permanent equity.

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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 P.M., 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.

Cash Dividends.

For the year ended December 31, 2024 , the Company did not declare and pay a Series A Common Stock cash dividend.

For the year ended December 31, 2023 , the Company declared and paid Series A Common Stock cash dividends of approximately $ 1.2 million.

For the years ended December 31, 2025 and December 31, 2024 , the Company did not declare and pay a Series A Common Stock cash dividend.

For the years ended December 31, 2025 and December 31, 2024 , the Company declared and paid Series D Preferred Stock cash dividends of approximately $ 2.2 million and $ 2.1 million, respectively.

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, 2024 and 2023 .

The Company intends to continue to pay dividends to our common stockholders on a quarterly basis, and 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 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 December 31, 2024 .

Series A Common Stock

Quarter Ended

Distributions Declared

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 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.

Series D Preferred Stock

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Upon our IPO, the value of non-vested shares granted is generally calculated based on the closing price of our common stock on the date of the grant.

During our Annual Stockholders meeting, held on May 26, 2022, the Company's 2017 Incentive Award Plan was amended to increase the available shares for issuance from 1.1 million to 2.5 million and at our Annual Stockholders meeting, held on June 1, 2023, the Company's 2017 Incentive Award Plan was amended to increase the available shares for issuance from 2.5 million to 3.5 million and add an evergreen provision to, on April 1 st and October 1 st of each year, automatically increase the maximum number of shares of common stock available under the plan to 15% of the Company’s outstanding shares of common stock, if on such date 3,500,000 (as adjusted for any reverse splits) is less than 15% of the Company’s then-outstanding shares of common stock.

During our Annual Stockholders meeting, held on May 26, 2022, the Company's 2017 Incentive Award Plan was amended to increase the available shares for issuance from 1.1 million to 2.5 million and at our Annual Stockholders meeting, held on June 1, 2023, the Company's 2017 Incentive Award Plan was amended to increase the available shares for issuance from 2.5 million to 3.5 million and add an evergreen provision to, on April 1 st and October 1 st of each year, automatically increase the maximum number of shares of common stock available under the plan to 15% of the Company's outstanding shares of common stock, if on such date 3,500,000 (as adjusted for any reverse splits) is less than 15% of the Company's then-outstanding shares of common stock.

During our Annual Meeting of Stockholders, held on June 1, 2023, the Company's 2017 Incentive Award Plan was amended to increase the available shares for issuance from 250,000 to 350,000 and add an evergreen provision to, on April 1 st and October 1 st of each year, automatically increase the maximum number of shares of common stock available under the plan to 15% of the Company's outstanding shares of common stock, if on such date 350,000 (as adjusted for any reverse splits) is less than 15% of the Company's then-outstanding shares of common stock.

At the Company’s 2025 Annual Meeting of Stockholders, held on June 2, 2025, the Company’s 2017 Incentive Award Plan was amended and restated to (i) increase the number of shares available for issuance thereunder to 450,000 from 350,000 shares of common stock and (ii) revise the plan’s evergreen provision to, on April 1st and October 1st of each year, automatically increase the maximum number of shares of common stock available under the plan to 15% of the Company’s outstanding shares of common stock, if on such date 450,000 shares constitute less than 15% of the Company’s then-outstanding shares of common stock.

A summary of the activity for the Company’s restricted stock was as follows:

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Common Shares

Weighted-Average Grant Date Fair Value

Balance at December 31, 2024

117,081 $ 12.34

97,685 $ 6.11

Adjusted for reverse split, net

( 84,080 ) $ 10.32

( 26,579 ) $ 9.73

Balance at December 31, 2025

The non-vested restricted shares outstanding as of December 31, 2024 , will vest over the next one to four years.

104,108 $ 8.79

The non-vested restricted shares outstanding as of December 31, 2025 , will vest over the next one to two years.

As of December 31, 2025 , there were approximately 23,000 shares available to grant under the Company's 2017 Incentive Award Plan.

Removed from the Granted and Vested totals noted above are 149,253 shares of common stock that were granted to the CEO in connection to his annual bonus in March 2024, as set by the Board of Directors, that vested immediately.

These 149,253 shares were voluntarily returned to the Company in December 2024 by the CEO so they could be distributed to the employees as part of their annual grants in 2025.

Share-based compensation expense was approximately $ 1.4 million and $ 1.0 million for the years ended December 31, 2024 and 2023 , respectively.

Of the shares vested for the year ended December 31, 2025, 26,579 were forfeited to cover payroll taxes.

Share-based compensation expense was approximately $ 1.1 million and $ 1.4 million for the years ended December 31, 2025 and 2024 , respectively, as part of our general and administrative costs.

As of December 31, 2025 , future unrecognized stock compensation related to unvested shares totaled approximately $ 0.9 million.

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Quarterly the Company reviews and test for non-cash impairments, as required by GAAP, on all our properties (i.e.

Office/Industrial properties, Retail properties, and Model Home segments);

Office/Industrial Properties, Retail Properties, and Model Home Properties);

however, the CODM does not consider those non-cash impairments with evaluating the segment’s cash operations and NOI.

The CODM uses NOI to evaluate and assess each segments' performance and in deciding how to allocate resources.

For Model Home performance the CODM also includes the gain or loss on sale of real estate assets net of any impairments, because they believe that is a major component in the operating success of the segment and part of the business model for Model Homes.

For Model Home performance the CODM also includes the gain or loss on sale of real estate assets net of any impairments, because we believe that is a major component in the operating success of the segment and part of the business model for Model Homes.

The gain on sale of model homes resulted in cash flows to the Company that the CODM can decide on how to allocate to future operations.

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This includes the loss on Conduit marketable securities.

The following tables compare the Company's segment activity to its results of operations and financial position as of and for years ended December 31, 2025, and 2024:

For the Year Ended December 31, 2025

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— — — ( 188,287 ) ( 188,287 )

Gain on deconsolidation of SPAC (see footnote 9)

Gain on sales of real estate, net

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— — — ( 17,925,723 ) ( 17,925,723 )

Gain on deconsolidation of SPAC (see footnote 9)

— — — 40,321,483 40,321,483

Gain on sales of real estate, net

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$ 122,052,874 $ 142,569,650

Includes lease intangibles and the land purchase option related to property acquisitions.

Includes lease intangibles.

Includes land, buildings and improvements, cash, cash equivalents, and restricted cash, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.

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Capital expenditures and tenant improvements, retail

217,121 150,522

Acquisition of operating properties, net

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INCOME TAX PROVISION

The Company is operated as, and has elected to be taxed as, a REIT under Sections 856 to 860 of the Code.

As a REIT, the Company is generally not subject to corporate level income taxes on REIT taxable income that is distributed to its shareholders.

The Company accounts for income taxes under the asset and liability method under which it recognizes deferred income taxes, net of valuation allowances, if any, for the estimated future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and its tax bases and net operating loss and tax credit carryforwards.

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Total current income tax expense (benefit)

12,737 10,982

Deferred income tax expense (benefit)

40,279 ( 289,480 )

Deferred income tax expense

424,119 40,279

Total deferred income tax expense (benefit)

Total deferred income tax expense

457,880 48,118

Change in Valuation Allowance

Total income tax (benefit) expense

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$ 4,979 21.0 % $ 103,369 21.0 %

State and local income tax, net of federal income tax effect

3,797 16.0 % — 0.0 %

Deconsolidation adjustment

Re-rate of state deferreds

21,383 90.2 % 48,564 9.9 %

True Up Adjustment

REIT minimum state and local income tax

20,468 86.3 % — 0.0 %

Total income tax (benefit) expense

Other - Other investment write off

382,622 1613.8 % — 0.0 %

Other - True-up adjustments

7,115 30.0 % — 0.0 %

Other - Partnership basis true-up

22,806 96.2 % ( 91,078 ) - 18.5 %

Total income tax expense

$ 463,170 1954 % $ 60,855 12.4 %

The pretax income in our TRS for the years ended December 31, 2025 and 2024 totaled approximately $ 24,000 and $ 492,000 , respectively.

The tax effects of temporary differences which give rise to significant portions of deferred tax assets are as follows as of December 31:

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145,680 243,662

Start up costs

54,974 24,543

Basis difference in investments

Net operating loss

Total deferred tax asset

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Deferred Tax Liabilities

Basis difference in investments

Net deferred tax assets

223,388 298,644

Valuation allowance

Net deferred tax assets (liability)

$ 223,388 $ 298,644

As of December 31, 2025, the Company had net operating loss carryforwards of $ 321,111 for federal, $ 36,361 for state income tax purposes.

The Company's state loss carryforwards will begin to expire starting in 2041 if not utilized.

Management assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

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Such objective evidence provides support for no valuation allowance to be recorded for the year ended December 31, 2025.

The Company files income tax returns in the U.S.

federal jurisdiction and various state jurisdictions.

The Company is no longer subject to U.S.

federal, state, and local or non-U.S.

income tax examinations by tax authorities for years before 2020.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

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The adoption of this ASU only impacted disclosures with no impact on the Company's consolidated financial statements.

Cash Taxes Paid (net of refunds)

RELATED PARTY TRANSACTIONS

During the years ended December 31, 2024 and 2023 , the Company leased a portion of its corporate headquarters to a company that is owned 100 % by the CEO, which is Puppy Toes, Inc.

Note that Centurion Counsel is another entity that pays rent to the Company and it is consolidated into Puppy Toes, Inc.

This is a continuation of the same related party transaction from 2020, which began in 2019 when we moved our corporate headquarters to Genesis Plaza.

Puppy Toes, Inc has leased space from the Company since November 2008.

Rent billed to these entities from the Company totaled $ 11,442 and $ 10,752 , for the years ended December 31, 2024 and 2023 , and is included in the rent paid by Presidio Property Trust to Genesis Plaza.

Additionally, we received full payroll reimbursement for employee services relate to Centurion Counsel and Puppy Toes, Inc.

During the years ended December 31, 2025 and 2024, the Company leased portions of its corporate headquarters to Puppy Toes, Inc., a company owned by the Chief Executive Officer and his wife, and to Centurion Counsel, Inc., which is owned by Puppy Toes, Inc.

Rent billed to these entities from the Company totaled $ 13,645 and $ 11,442 for the years ended December 31, 2025 and 2024, respectively.

Additionally, we receive full payroll reimbursement for employee services provided to Centurion Counsel and Puppy Toes, Inc.

during the years ended December 31, 2025 and 2024, which totaled approximately $ 73,678 and $ 141,429 , respectively.

These reimbursements were at cost and were not marked up or discounted.

As of December 31, 2024 and 2023, we had a reimbursement receivable balance of approximately $ 12,376 and $ 52,879 , which were paid in full during January 2025 and January 2024, respectively.

As of December 31, 2025 and December 31, 2024, we had reimbursement receivable balances of approximately $ 1,524 and $ 12,376 , which were paid in full during January 2025 and January 2026, respectively.

We recognized payments made to Mr.

Dubose, who previously served as President of NetREIT Advisors, LLC and Dubose Advisors, LLC;

Chief Financial Officer of NetREIT Dubose Model Home REIT, Inc.;

and as a Director of the Company.

Dubose is also the father-in-law of Mr.

Hightower who now serves on our Board of Directors.

For the years ended December 2025 and 2024, the Company paid Mr.

Dubose $ 67,504 and $ 293,139 , respectively.

For the year ended December 31, 2024, these payments were a combination of Consulting payments totaling $ 191,250 , and distributions and return of capital in his Trust’s investments in DMH#203, DMH#204, DMH#205, DMH#206 and DMH#207 totaling $ 101,889 .

For the year ended December 31, 2025, these payments were a combination of Consulting payments totaling $ 50,000 , and distributions and return of capital in his Trust’s investments in DMH#205 and DMH#207 totaling $ 17,504 .

We also recognized payments made to Mr.

Heilbron, CEO of Presidio Property Trust, for his investment in DMH#207, LP.

These payments were a combination of distributions and capital returns from DMH#207 LP.

For the years ending December 31, 2025 and 2024, the payments were $ 1,323 and $ 4,604 , respectively.

We recognized a payment of $ 11,880 made to Jim Durfey, Board of Director for Presidio Property Trust.

This payment was paid from Puppy Toes, a company owned by Presidio Property Trust’s Chief Executive Officer.

This payment was for purchasing 18,000 shares of SQFT stock from Jim Durfey

SUBSEQUENT EVENTS

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not identify any subsequent events that would have required adjustment or disclosure in the financial statements other than disclosed below.

The sale of UTC and Research Parkway took place in

February 2025, to a single buyer, for a combined sales price of

$ 16.95 million, where the Company netted approximately

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

The commercial properties were purchased between

2015 for approximately

$ 14.1 million, with a combined book value of approximately

$ 11.6 million prior to the sale, and the Company recorded a combined gain of approximately

$ 4.0 million.

March 2025, the Company has sold

five model homes for a total of approximately

$ 2.4 million.

The homes were purchased between

2023 with a total acquisition price of approximately

$ 2.2 million.

The Board of Directors has suspended the Company’s monthly dividend on its 9.375 % Series D Cumulative Redeemable Perpetual 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.

The Company estimates that suspension of the dividend will preserve approximately $ 2.3 million in cash on an annualized basis.

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.

On January 21, 2026, the Company received a notice that the Company'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 in the original principal amount of $ 17,727,500 , the related loan agreement, dated as of December 24, 2015 by and between the Company and Bancorp Bank.

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.

January 14, 2026, the Company sold Dakota Center for

$ 5,125,000 .

The remaining loan balance was released as a part of the discounted payoff agreement with the lender.

March 2026, we sold

five model homes in Texas for approximately

$ 2.5 million and recorded a gain of approximately

$ 0.1 million on sales.

These sales included the final home for

Presidio Property Trust, Inc.

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63,877 9,528 82,989 92,517 22,425 9,528 107,985 117,513 40,652 9,408 67,453

Union Town Center, Colorado Springs, CO

7,710 1,750 9,462 11,212 534 1,750 9,996 11,746 2,823 - 8,923 12/14

Research Parkway, Colorado Springs, CO

1,527 408 2,442 2,850 ( 36 ) 408 2,406 2,814 593 - 2,221 08/16

Mandolin, Houston, TX

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4,692 1,249 6,795 8,252 - 1,249 5,834 7,083 313 33 6,737 07/15 2023

Model Homes-DMH LP #205

1,442 407 2,004 2,411 - 407 2,004 2,411 252 - 2,159 2019 - 2020 2019 - 2020

Model Homes-DMH LP #206

- - - - - - - - - - -

Model Homes-DMH LP #207

5,615 1,457 6,795 8,252 - 1,457 6,795 8,252 191 - 8,061 07/15 2023

Model Homes-NMH Inc.

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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 9A. Controls and Procedures