Wheeler Real Estate Investment Trust, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the notes thereto included in this Form 10-K. All share and share-related information presented in this Form 10-K, including our consolidated financial statements, has been retroactively adjusted to reflect the decreased number of shares resulting from the Reverse Stock Splits, unless otherwise noted. For more detailed information regarding the basis of presentation for the following information, you should read the notes to the audited consolidated financial statements included in this Form 10-K. Company Overview We are a Maryland corporation focused on owning, leasing and operating income producing grocery-anchored centers, neighborhood centers, community centers and free-standing retail properties. We have targeted properties located within developed areas, commonly referred to as in-fill, that are surrounded by communities that have strong demographics and dynamic, diversified economies that will continue to generate jobs and future demand for commercial real estate. Our primary target markets include the Mid-Atlantic, Southeast and Northeast. Our portfolio is comprised of sixty-five properties, including sixty-two retail shopping centers and three undeveloped land parcels. Eighteen of these properties are located in South Carolina, eleven in Georgia, ten in Virginia, seven in Pennsylvania, five in North Carolina, two in New Jersey, two in Florida, two in Connecticut, two in Kentucky, two in Tennessee, one in Massachusetts, one in Alabama, one in Maryland, and one in West Virginia. The Company’s portfolio had total gross rentable space of approximately 7,019,000 square feet and a leased level of approximately 94.3% at December 31, 2025. The consolidated financial statements included in this Form 10-K include Cedar. We have determined that this acquisition is not a variable interest entity, as defined under the consolidation topic of the Financial Accounting Standards Board (the "FASB"), Accounting Standards Codification ("ASC") and we evaluated such entity under the voting model and concluded we should consolidate the entity. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. Recent Trends and Activities 2025 Significant Circumstances and Transactions Since January 1, 2024, the Company has invested approximately $39.6 million in its properties. The Company's asset dispositions were executed, in part, to capitalize on the value created through those investments. Additionally, the Company 13 executed a series of capital management and financing transactions designed to support its strategic objective of redeploying capital generated from these asset dispositions to enhance cash flow. These transactions included entering into short‑term and intermediate‑term credit arrangements to provide liquidity utilizing proceeds from asset sales to reduce borrowings, make investments and completing repurchases of outstanding Cedar Preferred Stock. Dispositions The following properties were sold during the year ended December 31, 2025 (in thousands): Disposal Date Property Contract Price Gain (Loss) Net Proceeds November 6, 2025 Tri-County Plaza - Royston, Georgia $ 5,125 $ 1,399 $ 4,775 November 3, 2025 Fieldstone Marketplace - New Bedford, Massachusetts 12,200 235 10,600 October 31, 2025 Carll's Corner - Bridgeton, New Jersey 3,657 (15) 2,784 October 29, 2025 South Philadelphia Land Parcel - Philadelphia, Pennsylvania 4,400 1,306 3,455 October 16, 2025 Lake Murray - Lexington, South Carolina 4,560 555 4,189 June 26, 2025 Winslow Plaza - Sicklerville, New Jersey 8,650 3,784 7,854 May 15, 2025 Devine Street - Columbia, South Carolina 7,100 1,054 6,758 May 1, 2025 Amscot Building - Tampa, Florida 600 348 523 March 13, 2025 Oregon Avenue - Philadelphia, Pennsylvania 3,000 80 2,765 March 6, 2025 South Lake - Lexington, South Carolina 1,900 (1,010) 1,633 February 11, 2025 Webster Commons - Webster, Massachusetts 14,500 6,618 13,907 The Company recorded impairment charges for the year ended December 31, 2025 of $2.5 million on Carll's Corner. Assets Held for Sale As of December 31, 2025, Moncks Corner, located in Moncks Corner, South Carolina, Darien Shopping Center, located in Darien, Georgia, Ridgeland, located in Ridgeland, South Carolina, and an outparcel at St. George Plaza, located in St. George, South Carolina, have been classified "assets held for sale" in the accompanying consolidated balance sheet. June 2024 Term Loan and Paydown On June 28, 2024, the Company entered into a term loan agreement (the "June 2024 Term Loan") with Guggenheim Real Estate, LLC, for $25.5 million at a fixed rate of 6.80% with interest-only payments due monthly. Commencing on August 10, 2029, until the maturity date of July 10, 2034, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount outstanding at that time. The June 2024 Term Loan's proceeds were used to refinance four loans, including paying $0.4 million in loan prepayment premiums. The June 2024 Term Loan is collateralized by Cypress Shopping Center, Conyers Crossing, Chesapeake Square, Sangaree Plaza and Tri-County Plaza. On November 6, 2025, the Company made a $3.1 million principal payment on the June 2024 Term Loan with the sale of Tri-County Plaza and paid a $0.6 million loan prepayment premium. October 2022 Cedar Term Loan Paydown On October 28, 2022, Cedar entered into a term loan agreement with Guggenheim Real Estate, LLC, (the "October 2022 Cedar Term Loan"). Upon the 2024 disposition of a vacant land parcel at Brickyard Plaza, the Company paid down approximately $0.4 million to release the land parcel from collateral. Upon the 2025 disposition of Webster Commons, the Company paid down approximately $9.1 million to release the property from collateral and paid a $0.5 million loan prepayment premium. June 2022 Term Loan with Paydowns On June 17, 2022, the Company entered into a term loan agreement with Guggenheim Real Estate, LLC (the “June 2022 Term Loan”). On March 6, 2025, the Company made a $1.0 million principal payment on the June 2022 Term Loan with the sale of South Lake and paid a $20 thousand loan prepayment premium. On October 16, 2025, the Company made a 14 $1.9 million principal payment on the June 2022 Term Loan with the sale of Lake Murray and paid a $52 thousand loan prepayment premium. April 2025 Cedar Bridge Loan On April 4, 2025, Cedar entered into a bridge loan agreement with KeyBank National Association for $10.0 million (the "April 2025 Cedar Bridge Loan"). The interest rate under the April 2025 Cedar Bridge Loan is the term SOFR rate plus the applicable margin of 1.30%. Interest payments are due monthly, and any outstanding principal is due at maturity. In August 2025, the maturity date was extended from January 4, 2026 to February 15, 2028. The April 2025 Cedar Bridge Loan is guaranteed by both Cedar and the Operating Partnership. Upon the 2025 dispositions of Carll's Corner and Fieldstone Marketplace, the Company paid down approximately $4.0 million of the April 2025 Cedar Bridge Loan. The cash pledged as collateral is in an interest bearing account held by the Operating Partnership included in "restricted cash" on the Company's consolidated balance sheets as of December 31, 2025. Winslow Plaza Payoff On June 26, 2025, the Company paid the remaining loan balance of $4.2 million on the Winslow Plaza loan in conjunction with the Winslow Plaza disposition and paid a $28 thousand loan prepayment premium. August 2025 Cedar Credit Facility On August 15, 2025, Cedar entered into a credit facility agreement with KeyBank National Association to draw up to $20.0 million (the "August 2025 Cedar Credit Facility") pursuant to which a loan advance may be made no more frequently than once per calendar month. The interest rate under the August 2025 Cedar Credit Facility for each draw is at the Company's option of either a base rate, daily simple SOFR or term SOFR, plus an applicable margin. Interest payments are due monthly, and any outstanding principal is due at maturity on August 15, 2027. The total outstanding principal under the August 2025 Credit Facility must be reduced to no greater than $10.0 million by February 15, 2027.The August 2025 Cedar Credit Facility was collateralized by three properties, consisting of Carll's Corner, Fieldstone Marketplace and South Philadelphia Parcels, and is guaranteed by Cedar and WHLR. Upon the 2025 dispositions of a South Philadelphia land parcel, Carll's Corner and Fieldstone Marketplace, they were released from collateral and the Company paid down approximately $10.3 million of the August 2025 Cedar Credit Facility. Although the August 2025 Cedar Credit Facility provides for total borrowings of up to $20.0 million, the Company did not have access to the full commitment as of December 31, 2025. Availability under the facility is subject to certain covenants and conditions established at origination, including requirements tied to projected asset sales and projected net sales proceeds. Reverse Stock Splits On June 20, 2025, in accordance with the Maryland General Corporation Law (the "MGCL"), our Board of Directors declared monthly reverse stock splits from August 21, 2025 to December 31, 2026 advisable, and directed that they be submitted to the Company’s stockholders for consideration. The Company’s stockholders approved monthly reverse stock splits from August 21, 2025 to December 31, 2026 at the annual meeting held on August 20, 2025. The January 2025 Reverse Stock Split, the March 2025 Reverse Stock Split, the May 2025 Reverse Stock Split, the September 2025 Reverse Stock Split, the November 2025 Reverse Stock Split, and the January 2026 Reverse Stock Split were effected on January 27, 2025, March 26, 2025, May 26, 2025, September 22, 2025, November 28, 2025 and January 16, 2026 respectively, at the reverse stock split ratios of one-for-four, one-for-five, one-for-seven, one-for-five, one-for-two and one-for-three, respectively. The par value of each share of Common Stock remained unchanged after each such reverse stock split. No fractional shares were issued in connection with any Reverse Stock Split. Stockholders who would have otherwise been issued a fractional share of the Company’s Common Stock as a result of each such reverse stock split instead received a cash payment in lieu of such fractional share in an amount equal to the applicable fraction multiplied by the closing price of the Company’s Common Stock on Nasdaq on each effective date thereof, without any interest. Exchanges of Series B Preferred Stock and Series D Preferred Stock for Common Stock During the year ended December 31, 2025, the Company has issued an aggregate amount of 465,770 shares of its Common Stock to unaffiliated holders of its securities in exchange for a total of 642,274 shares of its Series B Preferred Stock 15 and a total of 488,074 shares of its Series D Preferred Stock, retiring $36.2 million in preferred stock liquidation value. The Company intends to continue to exchange shares of its Common Stock for its Series B Preferred Stock and/or its Series D Preferred Stock with the holders thereof as opportunities arise as an additional strategy to reduce the outstanding number of each security, enhance the Company's financial stability and optimize its capital allocation. The fair market value of the Common Stock issued in exchange for Preferred Stock was less than the carrying value of the Preferred Stock retired in those transactions resulting in $9.6 million for the year ended December 31, 2025, recognized as a deemed contribution within accumulated deficit in the consolidated balance sheet, with such deemed contributions included as a component of net loss attributable to common shareholders. Series D Preferred Stock - Redemptions During the year ended December 31, 2025, the Company processed redemptions of an aggregate of 375,289 shares of Series D Preferred Stock from the holders thereof. Accordingly, the Company issued 147,900 shares of Common Stock in settlement of an aggregate redemption price of approximately $15.3 million. At December 31, 2025, the Company had received requests to redeem 700 shares of Series D Preferred Stock with respect to the January 2026 Holder Redemption Date. As such, the redemption of these shares of the Series D Preferred Stock is considered certain at December 31, 2025 and the liquidation value associated with these shares of $30 thousand is presented as a liability in the accompanying consolidated balance sheet. Convertible Notes During the year ended December 31, 2025, the Company issued an aggregate of 17,882 shares of its Common Stock to settle conversion requests of the holders of the Convertible Notes comprising an aggregate principal amount of $1.5 million, which resulted in an aggregate net loss on conversion of Convertible Notes of $0.9 million. As of December 31, 2025, the Conversion Price for the Convertible Notes was approximately $5.69 per share of the Company’s Common Stock (approximately 4.40 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted). Subsequent to year-end, as a result of the February 2026 Series D Preferred Stock redemptions the Conversion Price was further adjusted for the Convertible Notes to approximately $2.60 per share of the Company’s Common Stock (approximately 9.62 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted). Interest expense on the Convertible Notes consists of the following (in thousands, except for shares): Years ended December 31, Series B Preferred Stock number of shares (1) Series D Preferred Stock number of shares (1) Convertible Note interest at 7% coupon Fair value adjustment Interest expense 2025 — 107,522 $ 2,107 $ 1,752 $ 3,859 2024 — 187,410 $ 2,163 $ 1,970 $ 4,133 (1) Shares issued as interest payment on Convertible Notes. Subscription Agreement, Issuance of Series D Preferred Stock and Noncontrolling Interest Contributions Starting in October 2025 the Company entered into four subscription agreements with certain investors pursuant to which the Company issued an aggregate 27,000 shares of its Series D Preferred Stock in consideration for an aggregate 54,000 shares of Cedar Series C Preferred Stock held by such investors. Immediately following the closing of each transaction, the Company contributed the acquired Cedar Series C Preferred Stock to Cedar Realty Trust, Inc. and those shares were retired. Management evaluated the transactions under ASC 845, Nonmonetary transactions, and determined that the fair value of the Series D Preferred Stock issued was approximately the fair value of the Cedar Preferred Stock received as consideration. No gain or loss was recognized as a result of this exchange. The fair value of the Cedar Preferred Stock received and retired is compared to its carrying value, and as a result the Company recognized $0.4 million in deemed distributions included as a component of net loss attributable to common shareholders. 16 Noncontrolling Interests - Consolidated Subsidiary During the year ended December 31, 2025, Cedar repurchased and retired 1,925,472 shares of Cedar Series C Preferred Stock in a series of repurchase transactions. The shares of Cedar Series C Preferred Stock were repurchased for an aggregate of $31.3 million. During the year ended December 31, 2025, Cedar repurchased and retired 592,372 shares, respectively, of Cedar Series B Preferred Stock through a tender offer. The shares of Cedar Series B Preferred Stock were repurchased for an aggregate of $10.6 million. The repurchase of the noncontrolling interests caused the recognition of $16.5 million in deemed distributions during the year ended December 31, 2025. See Liquidity and Capital Resources below, and Note 10 to the accompanying audited consolidated financial statements for additional details. Related Party Transactions Management and Leasing Services for Cedar The Company performs property management and leasing services for Cedar, a subsidiary of the Company. During the years ended December 31, 2025 and 2024, Cedar paid the Company $0.7 million and $1.4 million, respectively, for these services. Related party amounts due to the Company from Cedar for financing and real estate taxes, management fees, leasing commissions and Cost Sharing Agreement (as defined below) allocations were $11.3 million and $9.5 million as of December 31, 2025 and 2024, respectively, and have been eliminated for consolidation purposes. Investment in Stilwell Activist Investments, L.P As of December 31, 2025, the net asset value of the Company’s investment in Stilwell Activist Investments, L.P., a Delaware limited partnership (“SAI”) was $24.4 million, which includes $20.5 million from subscriptions. There was a $10.0 million subscription in December 2025 and $10.5 million of subscriptions prior to 2025. The initial subscription was approved by the disinterested directors of the Company, and, after the formation of the Related Person Transactions Committee (the “RPT Committee”), by the RPT Committee. For the year ended December 31, 2025, the Company recorded $2.4 million in unrealized holding gains through other comprehensive income, net of investment fees. For the year ended December 31, 2025, the investment fees were $0.6 million. See Note 4 to the accompanying audited consolidated financial statements for additional details. Preferred Dividends At September 21, 2025, the annual dividend rate increased by 1.25% of the liquidation preference per annum to 16.0%, including the default rate, the maximum rate per the Company's Articles Supplementary. The total cumulative dividends in arrears for Series D Preferred Stock is $25.6 million as of December 31, 2025 ($16.95 per share). New Leases and Leasing Renewals The following table presents selected lease activity statistics for our properties: 17 Years Ended December 31, 2025 2024 Property Data (1) : Number of retail shopping centers owned and leased, end of period 62 72 Aggregate gross leasable area, end of period 7,018,837 7,660,979 Renewals (2) : Leases renewed with rate increase (sq feet) 642,385 768,286 Leases renewed with rate decrease (sq feet) — 43,360 Leases renewed with no rate change (sq feet) 157,808 157,504 Total leases renewed (sq feet) 800,193 969,150 Leases renewed with rate increase (count) 135 156 Leases renewed with rate decrease (count) — 3 Leases renewed with no rate change (count) 10 11 Total leases renewed (count) 145 170 Options exercised (count) 33 34 Weighted average on rate increases (per sq foot) $ 1.51 $ 1.36 Weighted average on rate decreases (per sq foot) $ — $ (0.86) Weighted average rate (per sq foot) $ 1.21 $ 1.04 Weighted average change over prior rates 11.7 % 9.5 % New Leases (2) (3) : New leases (sq feet) 252,374 230,953 New leases (count) 44 55 Weighted average rate (per sq foot) $ 13.05 $ 14.45 Weighted average change of new leases over prior rates 26.4 % 21.4 % (1) Excludes the undeveloped land parcels. (2) Lease data presented is based on average rate per square foot over the renewed or new lease term. (3) The Company does not include ground leases entered into for the purposes of new lease square feet and weighted average rate (per square foot) on new leases. Critical Accounting Estimates and Policies The following discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included in this Form 10-K, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 18 The critical accounting estimates and policies summarized in this section are discussed in further detail in the notes to the consolidated financial statements appearing elsewhere in this Form 10-K. We believe that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results. Revenue Recognition Principal components of our total revenues include base and percentage rents and tenant reimbursements. The Company combines lease and nonlease components in lease contracts, which includes combining base rent and tenant reimbursement revenue. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Certain lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent) which we recognize when the tenants achieve the specified targets as defined in their lease agreements. Although we periodically review the valuation of the asset/liability resulting from the straight-line accounting treatment of our leases in light of any changes in lease terms, financial condition or other factors concerning our tenants, they are subject to uncertainty. These assessments are inherently sensitive as they are based on the judgment of management and information available at the time of evaluation. Rents and Other Tenant Receivables We record a tenant receivable for amounts due from tenants such as base rents, tenant reimbursements and other charges allowed under the lease terms. We periodically review tenant receivables for collectability and determine the need for an allowance for the uncollectible portion of accrued rents and other accounts receivable based upon customer creditworthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels and current economic trends. We consider a receivable past due once it becomes delinquent per the terms of the lease; our standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. Acquired Properties and Lease Intangibles We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values. Identifiable intangibles include amounts allocated to acquired out-of-market leases, tenant relationships, the value of in-place leases and ground. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Such amounts are based on estimates and forecasts which, by their nature, are highly subjective and may result in future changes in the event forecasts are not realized. Impairment of Long-Lived Assets We periodically review investment properties for impairment on a property-by-property basis or whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, with an evaluation performed at least annually. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. We measure any impairment of investment property when the estimated undiscounted future operating income before depreciation and amortization, plus its residual value, is less than the carrying value of the property. To the extent impairment has occurred, we charge to income the excess of carrying value of the property over its estimated fair value. We estimate fair value using unobservable data such as operating income, estimated capitalization rates or multiples, leasing prospects and local market information. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 and 3 inputs. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 19 The Company may decide to sell properties. Properties classified as held for sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. When the carrying value exceeds the fair value, less estimated costs to sell, an impairment expense is recognized. The Company estimates fair value, less estimated closing costs, based on similar real estate sales transactions. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 and 3 inputs. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants and convertible notes, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. The assumptions used in these fair value estimates are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Series D Preferred Stock The Series D Preferred Stock was initially classified as mezzanine equity because the redemption provisions were conditional upon the occurrence of an event that was not certain. The Series D Preferred Stock was valued at net proceeds plus accrued and unpaid dividends. In 2023, this event became certain and in accordance with ASC 480, the Series D Preferred Stock was revalued at the redemption price which includes undeclared dividends, representing liquidation value. The adjustment to liquidation value was recognized in accumulated deficit as an adjustment to redemption value. Additionally, in accordance with ASC 480, as holders exercise their redemption rights the Series D Preferred Stock becomes mandatorily redeemable and the liquidation value of their exercise is classified as a liability. Liquidity and Capital Resources At December 31, 2025, our consolidated cash, cash equivalents and restricted cash totaled $48.6 million compared to consolidated cash, cash equivalents and restricted cash of $60.7 million at December 31, 2024. Cash flows from (used in) operating activities, investing activities and financing activities were as follows (in thousands): Years Ended December 31, Changes 2025 2024 Dollars Percent Operating activities $ 21,132 $ 25,988 $ (4,856) (18.7) % Investing activities $ 32,137 $ 15,480 $ 16,657 107.6 % Financing activities $ (65,356) $ (20,559) $ (44,797) (217.9) % Operating Activities Net cash provided by operating activities, before net changes in operating assets and liabilities, was $25.9 million and $29.4 million for 2025 and 2024, respectively, primarily due to (1) a decrease of $3.3 million in NOI of related to properties not defined as Same-Property (as defined below), (2) an increase of $0.9 million in corporate general and administrative expense, (3) an increase of $0.4 million in cash paid for interest expense and (4) an increase of $0.1 million in other expense, partially offset by (5) an increase of $1.0 million in Same-Property NOI (as defined below) and (6) an increase of $0.5 million in interest income. Investing Activities Our cash flows from investing activities increased $16.7 million, primarily due to (1) the $59.2 million in net proceeds from the sale of 10 retail shopping centers and one land parcel sold in 2025 compared to three retail shopping centers and three 20 land parcels sold in 2024 resulting in net proceeds of $38.5 million and (2) the decrease in capital expenditures of $5.4 million, partially offset by (3) a $10.0 million investment subscription with SAI in 2025 compared to $0.5 million in 2024. Financing Activities Our cash flows used in financing activities were $65.4 million during the year ended December 31, 2025, compared to cash flows used in financing activities of $20.6 million for the comparable period in 2024. Financing activities during the year ended December 31, 2025 primarily consist of: Cash inflows: • $15.3 million loan proceeds a result of the August 2025 Cedar Credit Facility; and • $10.0 million loan proceeds a result of the April 2025 Cedar Bridge Loan. Cash outflows: • $41.9 million repurchase of noncontrolling interests; • $15.3 million payment on August 2025 Credit Facility; • $9.1 million payment on October 2022 Cedar Term Loan related to the sale of Webster Commons; • $6.6 million for distributions paid on noncontrolling interests; • $4.2 million payment on Winslow Plaza loan related to the sale of Winslow Plaza; • $4.0 million payment on April 2025 Cedar Bridge Loan; • $3.1 million payment on June 2024 Term Loan related to the sale of Tri-County; • $1.8 million scheduled loan principal payments on debt; • $1.9 million payment on June 2022 Term Loan related to the sale of Lake Murray; • $1.3 million for loan prepayment premiums; • $1.0 million payment on June 2022 Term Loan related to the sale of South Lake; and • $0.5 million payments for deferred financing costs. Financing activities during the year ended December 31, 2024 primarily consist of: Cash inflows: • $3.9 million 2024 loan refinancing activities, net; • $5.2 million draw on Cedar Revolving Credit Agreement; and • $2.5 million draw on Timpany Plaza Loan Agreement. Cash outflows: • $11.5 million repurchase of noncontrolling interests; • $10.4 million for distributions paid on noncontrolling interests; • $1.6 million payments for deferred financing costs; • $5.2 million payment on Cedar Revolving Credit Agreement; • $1.4 million scheduled loan principal payments on debt; • $1.3 million repurchase of debt securities; • $0.4 million payment on October 2022 Cedar Term Loan related to the sale of Brickyard Plaza land parcel; and • $0.4 million loan prepayment premiums. The Company continues to endeavor to manage its debt prudently with the objective of achieving a conservative capital structure and minimizing leverage within the Company. Our debt balances, excluding unamortized debt issuance costs, consisted of the following (in thousands) : 21 December 31, 2025 2024 Fixed-rate notes $ 476,875 $ 499,531 Variable-rate lines of credit 5,966 — Total debt $ 482,841 $ 499,531 The weighted average interest rate and term of our fixed-rate debt were 5.5% and 6.6 years, respectively, at December 31, 2025. The weighted average interest rate and term of our fixed-rate debt were 5.5% and 7.5 years, respectively, at December 31, 2024. We have $6.5 million of debt maturing during the year ending December 31, 2026. While we anticipate being able to refinance all the loans at reasonable market terms upon maturity, our inability to do so may materially impact our financial position and results of operations. See Note 6 to the accompanying audited consolidated financial statements for additional mortgage indebtedness details. Material Cash Requirements, Contractual Obligations and Commitments Our expected material cash requirements for the year ended December 31, 2025 and thereafter are comprised of (i) contractually obligated expenditures; (ii) other essential expenditures; (iii) other investments; and (iv) the repurchases of noncontrolling interests. The primary liquidity needs of the Company, in addition to the funding of our ongoing operations, at December 31, 2025 are $6.5 million in principal and regularly scheduled payments due in the year ended December 31, 2026 as described in Note 6 to the accompanying audited consolidated financial statements. In addition, the Company has $0.4 million outstanding construction commitments at December 31, 2025. In addition to liquidity required to fund debt payments and construction commitments, we may incur some level of capital expenditures during the year for our existing properties that cannot be passed on to our tenants. To meet these future liquidity needs, the Company: • had $23.7 million in cash and cash equivalents at December 31, 2025; • had $25.0 million held in lender reserves, which included $6.0 million to secure the April 2025 Cedar Bridge Loan, as well as amounts reserved for the purpose of tenant improvements, lease commissions, real estate taxes and insurance at December 31, 2025; and • intends to use cash generated from operations during the year ended December 31, 2026. In 2024 and 2025, the Company repurchased and retired a total of 2,770,778 shares of Cedar Series C Preferred Stock and 592,372 shares of Cedar Series B Preferred Stock, which carried an aggregate liquidation value of $84.1 million, for approximately $53.4 million, including fees and expenses, and for 27,000 shares of Series D Preferred Stock. These repurchases were funded by asset sales, the April 2025 Cedar Bridge Loan and issuance of Series D Preferred Stock. The shares retired in 2024 and 2025 will reduce future annual dividend payments by $5.6 million. The Company intends to continue repurchasing its Cedar Series B Preferred Stock and Cedar Series C Preferred Stock as both series are currently trading at a discount to their liquidation value, presenting a strategic opportunity to buy back shares at favorable prices. By reducing the number of shareholders eligible for dividend payments, the Company believes it can offset the net operating income lost from the recent sales of certain properties as it seeks to enhance its financial stability, strengthen its balance sheet, optimize its capital allocation and maximize shareholder value. Additionally, the Company plans to undertake measures to grow its operations and increase liquidity through delivering space currently leased but not yet occupied, backfilling vacant anchor spaces, replacing tenants who are in default of their lease terms, increasing future lease revenue through tenant improvements partially funded by restricted cash, disposition of non-core assets in the ordinary course of business and refinancing properties. In order to continue qualifying as a REIT, the Company is required to distribute at least 90% of its "REIT taxable income," as defined in the Code. Future dividend declarations will continue to be at the discretion of the Board of Directors, and will depend on the cash flow and financial condition of the Company, capital requirements, annual distribution requirements under the REIT provisions of the Code, and such other factors as the Board of Directors may deem relevant. The Company 22 intends to continue to operate its business in a manner that will allow it to qualify as a REIT for U.S. federal income tax requirements. Our success in executing on our strategy will dictate our liquidity needs going forward. If we are unable to execute in these areas, our ability to grow may be limited without additional capital. Convertible Notes The Convertible Notes could have the effect of causing, if interest is paid in the future in shares of Series D Preferred Stock, substantial dilution of the Series D Preferred Stock and reduction in the value of any Series D Preferred Stock. In addition, depending on the prices at which the ongoing monthly redemptions of Series D Preferred Stock occur, the conversion price for the Convertible Notes could be repeatedly adjusted downwards, which has caused, and could continue to cause, significant downward pressure on the value of the Company’s Common Stock. Series D Preferred Stock As of December 31, 2025, the outstanding Series D Preferred Stock had an aggregate liquidation preference of approximately $37.6 million, with aggregate accrued and unpaid dividends in the amount of approximately $25.6 million, for a total liquidation value of $63.2 million. O n a monthly basis, each holder of Series D Preferred Stock has the right, at such holder’s option, to request that the Company redeem any or all of such holder’s shares of Series D Preferred Stock. As the holders of the Series D Preferred Stock continue to exercise their redemption rights on a monthly basis, the Company will continue to pay the aggregate redemption price in shares of our Common Stock. The Company does not believe it is in its interests to liquidate assets or incur indebtedness to fund cash redemptions of the Series D Preferred Stock and, accordingly, it has no intention of doing so. Therefore, the Company intends to continue to settle redemptions of the Series D Preferred Stock in Common Stock. We believe that the issuance of Common Stock to settle redemptions in Common Stock will continue to result in a substantial dilution of the outstanding Common Stock. Recent Accounting Pronouncements See Note 2 to the accompanying audited consolidated financial statements of this Annual Report on Form 10-K. 23 Results of Operations Comparison of 2025 to 2024 (in thousands) Years Ended December 31, Changes 2025 2024 Dollars Percent Revenues $ 99,445 $ 104,574 $ (5,129) (4.9) % Property operating expense 33,044 35,286 (2,242) (6.4) % Net operating income 66,401 69,288 (2,887) Depreciation and amortization (22,944) (25,316) 2,372 9.4 % Impairment charges (2,880) (1,195) (1,685) (141.0) % Corporate general & administrative (11,709) (10,796) (913) (8.5) % Gain on disposal of properties, net 14,354 5,550 8,804 158.6 % Interest income 964 460 504 109.6 % Unrealized gain on investment securities, net - related party — 840 (840) n/a Interest expense (33,758) (32,602) (1,156) (3.5) % Net changes in fair value of derivative liabilities 4,742 (8,332) 13,074 156.9 % Loss on conversion of Convertible Notes (902) (412) (490) (118.9) % Gain on preferred stock redemptions 1,523 4,716 (3,193) (67.7) % Other expense (928) (1,489) 561 37.7 % Income tax expense (26) (1) (25) (2,500.0) % Net Income $ 14,837 $ 711 $ 14,126 Revenues were lower primarily as a result of (1) a decrease of $6.7 million in rental revenues and tenant reimbursements, net of credit adjustments on operating lease receivables, attributable to properties that were sold in 2024 and 2025, (2) a decrease of $0.4 million in market lease amortization and straight line rent, partially offset by (3) an increase of $2.1 million in rental revenues and tenant reimbursements, net of credit adjustments on operating lease receivables, attributable to Same-Properties (as defined below). Property operating expenses were lower primarily as a result of (1) a decrease of $3.3 million in operating expenses attributable to properties that were sold in 2024 and 2025, partially offset by (2) an increase of $0.6 million in grounds and landscaping, primarily due to an increase in snow removal, (3) an increase of $0.3 million in real estate taxes and insurance and (4) an increase of $0.1 million in utilities. Depreciation and amortization were lower primarily as a result of properties sold in 2024 and 2025. Impairment was recorded for Carll's Corner, located in Bridgeton, New Jersey, and an outparcel at St. George Plaza, located in St. George Plaza in 2025 and Oregon Avenue, located in Philadelphia, Pennsylvania in 2024. Corporate general and administrative expenses were higher primarily as a result of (1) an increase of $0.6 million in salaries, (2) an increase of $0.4 million in corporate administration, partially offset by (3) a decrease of $0.1 million in advertising. Gain on disposal of properties, net related to the sale of 10 retail shopping centers and one land parcel sold in 2025 compared to three retail shopping centers and three land parcels sold in 2024. Interest income was higher primarily as a result of higher restricted cash balances, including restricted cash pledged as collateral for the April 2025 Cedar Bridge Loan. Interest expense increased 3.5%. Below is a comparison of the components which make up interest expense (in thousands): 24 December 31, Changes 2025 2024 Dollars Percent Property debt interest - excluding Cedar debt $ 17,275 $ 17,118 $ 157 0.9 % Convertible Notes interest (1) 3,859 4,133 (274) (6.6) % Loan prepayment premium 1,256 368 888 241.3 % Amortization of deferred financing costs 2,694 2,673 21 0.8 % Variable-rate lines of credit (2) 551 — 551 n/a Property debt interest - Cedar 8,123 8,310 (187) (2.3) % Total Interest Expense $ 33,758 $ 32,602 $ 1,156 3.5 % (1) Includes the fair value adjustment for the paid-in-kind interest. (2) Includes the April 2025 Cedar Bridge Loan and the August 2025 Cedar Credit Facility. Property debt interest inclusive of Cedar debt was relatively flat, a result of (1) an increase of $0.6 million due to an increase in the overall average interest rate and (2) a decrease of $0.6 million in the average principal property debt balance. Net changes in the fair value of derivative liabilities was a $4.7 million gain for the year ended December 31, 2025, which represents a non-cash adjustment from a change in the fair value, primarily related to the conversion rate on the Convertible Notes relative to market trade prices of the Convertible Notes and Common Stock. See Note 7 to the accompanying audited consolidated financial statements for additional details. Gain on Preferred Stock redemptions is a result of the fair market value of the Common Stock issued on redemptions of the Company's Series D Preferred Stock compared to the Series D Preferred Stock's carrying value. During the years ended December 31, 2025 and 2024, the Company realized a gain of $1.5 million and $4.7 million in the aggregate, respectively. Other expense represents expenses which are non-operating in nature. Other expenses were $0.9 million for the year ended December 31, 2025, which primarily consisted of capital structure costs, including the registration of our Common Stock to issue in settlement of Series D Preferred Stock redemptions, expenses incurred in connection with the Reverse Stock Splits and redemptions of the Series D Preferred Stock by holders thereof. Other expenses were $1.5 million for the year ended December 31, 2024, which primarily consisted of capital structure costs, including repurchase of Convertible Notes and legal and other expenses incurred for the 2024 Reverse Stock Splits, the registration of our Common Stock to issue in settlement of Series D Preferred Stock redemptions and redemptions of the Series D Preferred Stock by holders thereof. Same-Property Net Operating Income Same-property net operating income ("Same-Property NOI") is a widely-used non-GAAP financial measure for REITs. The Company believes that Same-Property NOI is a useful measure of the Company's property operating performance. The Company defines Same-Property NOI as property revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because Same-Property NOI excludes above (below) market lease amortization, straight-line rents, general and administrative expenses, depreciation and amortization, gain or loss on sale or capital expenditures and leasing costs and impairment charges, it provides a performance measure, that when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from operating income. The Company uses Same-Property NOI to evaluate its operating performance since Same-Property NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. Properties are included in Same-Property NOI if they are owned and operated for the entirety of both periods being compared ("Same-Property"). Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from Same-Property NOI. The most directly comparable GAAP financial measure is consolidated operating income. Same-Property NOI should not be considered as an alternative to consolidated operating income prepared in accordance with GAAP or as a measure of liquidity. Further, Same-Property NOI is a measure for which there is no standard industry definition and, as such, it is not consistently defined or reported on among the Company's peers, and thus may not provide an adequate basis for comparison among REITs. 25 The following table is a reconciliation of Same-Property NOI from operating income (the most directly comparable GAAP financial measure, in thousands): Years Ended December 31, 2025 2024 Operating Income $ 43,222 $ 37,531 Add (deduct): Gain on disposal of properties, net (14,354) (5,550) Corporate general & administrative 11,709 10,796 Impairment charges 2,880 1,195 Depreciation and amortization 22,944 25,316 Straight-line rents (1,895) (1,334) Above (below) market lease amortization, net (2,466) (3,434) Other non-property revenue (945) (1,043) NOI related to properties not defined as Same-Property (900) (4,242) Same-Property Net Operating Income $ 60,195 $ 59,235 Total Same-Property NOI was $60.2 million and $59.2 million for the years ended December 31, 2025 and 2024, respectively, representing an increase of 1.6% due to a 2.3% increase in property revenue, partially offset by a 3.7% increase in property expenses. Funds from Operations We use funds from operations ("FFO"), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts ("Nareit") in its March 1995 White Paper (as amended in November 1999, April 2002 and December 2018). As defined by Nareit, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate-related depreciation and amortization (excluding amortization of loan origination costs), plus impairment of real estate-related long-lived assets and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results. We believe the computation of FFO in accordance with Nareit's definition includes certain items that are not indicative of the results provided by our Operating Portfolio and affect the comparability of our period-over-period performance. These items include, but are not limited to, legal settlements, non-cash amortization on loans and acquisition costs. Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs. A reconciliation of net income to FFO available for common stockholders and AFFO is shown in the table below (in thousands): 26 Years Ended December 31, 2025 2024 Net income $ 14,837 $ 711 Depreciation and amortization of real estate assets 22,944 25,316 Impairment charges 2,880 1,195 Gain on disposal of properties, net (14,354) (5,550) FFO 26,307 21,672 Preferred stock dividends - undeclared (6,640) (8,267) Dividends on noncontrolling interests preferred stock (6,067) (10,295) Preferred stock accretion adjustments 87 87 FFO available to common stockholders and common unitholders 13,687 3,197 Other non-recurring and non-cash expenses 1,256 368 Unrealized gain on investment securities, net - related party — (840) Net changes in fair value of derivative liabilities (4,742) 8,332 Loss on conversion of Convertible Notes 902 412 Gain on Preferred Stock redemptions (1,523) (4,716) Straight-line rental revenue, net straight-line expense (1,970) (1,402) Deferred financing cost amortization 2,694 2,673 Paid-in-kind interest 3,859 4,133 Above (below) market lease amortization, net (2,466) (3,434) Recurring capital expenditures tenant improvement reserves (1,404) (1,532) AFFO $ 10,293 $ 7,191 Weighted Average Common Shares 106,902 64 FFO per Common Share $ 128.03 $ 49,953.13 AFFO per Common Share $ 96.28 $ 112,359.38 Other non-recurring and non-cash expenses are costs of the Company that we believe will not be incurred on a go-forward basis. Other non-recurring expenses were $1.3 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively, a result of loan prepayment premiums. Macroeconomic Considerations Evolving macroeconomic conditions, including global macroeconomic challenges such as changes in trade policies, sanctions, treaties, tariffs, regulatory requirements, uncertainty in the markets, economic instability and fluctuations in inflation and interest rates, may affect our business. Substantially all of the Company’s leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes, insurance and many of the operating expenses it incurs. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. However, s ignificant inflation rate increases over a prolonged period of time may have a material adverse impact on the Company’s business. Conversely, deflation could lead to downward pressure on rents and other sources of income. Fluctuations in interest rates and governmental tariff-related measures could significantly impact our Operating Portfolio and overall financial performance. Interest rate increases could result in higher incremental borrowing costs for the Company and our tenants. The duration of the Company's indebtedness and our relatively low exposure to floating rate debt have mitigated the direct impact of inflation and interest rate increases. In a low or stable interest rate environment, we may benefit from lower borrowing costs, enabling strategic investments, acquisitions, or capital returns to shareholders. Additionally, we monitor market conditions to adjust our capital allocation accordingly, maintain a disciplined financial approach and seek to optimize returns while managing exposure to interest rate volatility. The degree and pace of inflation and interest rate changes have had and may continue to have impacts on our business. Changes in tariffs could lead to construction 27 cost variances for the Company, additional tenant costs, which may affect rental rates, and shifts in tenant mix that may impact the Company's operating income. Recent Tax Law Update On July 4, 2025, President Trump signed the OBBBA into law. The OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017. Such extensions included the permanent extension of the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers. The OBBBA also increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries (the permissible value of taxable REIT subsidiary securities that a REIT may hold) from 20% to 25% of the value of the REIT’s total assets for taxable years beginning after December 31, 2025. The Company is currently evaluating this legislation to determine its potential impact on the Company’s consolidated financial statements and related disclosures. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item. Item 8. Financial Statements and Supplementary Data. The information required by this Item 8 is incorporated by reference to our Financial Statements beginning on page 45 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.