Presidio Property Trust Inc

March 31, 2025

1. ORGANIZATION AND BASIS OF PRESENTATION

***Organization.**Presidio Property Trust, Inc. ("we", "our", "us" or the "Company") is an internally-managed real estate investment trust ("REIT"), with holdings in office, industrial, retail and model home properties. 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 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 a special purpose acquisition company (until deconsolidation in September 2023)*as noted below.

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

The Company has determined that the limited partnerships, in which it owns less than100%, 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 Sections856 through860 of the Internal Revenue Code of1986, as amended (the "Code"), for federal income tax purposes. To maintain our qualification as a REIT, we are required to distribute at least90% 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 generallynot 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. We are subject to certain state and local income taxes.

We, together withone of our entities, have elected to treat certain subsidiaries as a taxable REIT subsidiary (a "TRS") for federal income tax purposes. Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our commercial tenants, and holding assets that we cannot hold directly. A TRS is subject to federal and state income taxes. The Company has concluded that there areno significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed any significant interest or penalties for tax positions by any tax jurisdictions.

Liquidity.The Company's anticipated future sources of liquidity mayinclude existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings, and the sale of equity or debt securities. Future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements on our commercial buildings, paying lease commissions (to the extent they arenot covered by lender-held reserve deposits), and the payment of dividends to our stockholders. The Company is also seeking investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity. If necessary, the Company mayseek other short-term liquidity alternatives, such as bridge loans, refinancing property loans or a bank line of credit depending on the credit environment. See note11 Stockholders' Equity for additional information on sale of securities.

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Short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of existing mortgages, completingtenant improvements on our commercial buildings, paying leasing commissions, distributions to noncontrolling interests, and funding dividends, if any, to stockholders. Future principal payments due on mortgage notes payable, during the lastthree quarters of2025 and in the year ending* December 31, 2026total approximately$27.8 million and $18.4 million, respectively, of which$6.7 million in2025* and $1.7 million in2026 are related to model home properties. See Note7. Mortgage Notes Payable for additional information on the Dakota Center loan that matured on* July 6, 2024.*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. Additional principal payments will be made with cash flows from ongoing operations.

As the Company continues its operations, it* mayre-finance or seek additional financing. However, there can beno* assurance that any such re-financing or additional financing will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company doesnot obtain additional funding, it will most likely be required to reduce its plans and/or certain discretionary spending, which could have a material adverse effect on the Company's ability to achieve its intended business objectives. Management believes that the combination of working capital on hand and the ability to refinance commercial and model home mortgages will fund operations through at least the nexttwelve months from the date of the issuance of these unaudited interim financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

There have beenno significant changes to the Company’s accounting policies since it filed its audited financial statements in the2024 year end Annual Report. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended* December 31, 2024*, included in the Company’s2024 year end Annual Report.

Basis of Presentation.The accompanying consolidated financial statements have been prepared by the Company's management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form10-Q and Article8 of Regulation S-X. Certain information and footnote disclosures required for annual consolidated financial statements have been excluded pursuant to rules and regulations of the SEC. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of our financial position as of March 31, 2025, and* December 31, 2024*, as well as results of our operations, and cash*** flows as of, and for thethree months ended March 31, 2025and2024*, respectively. However, the results of operations for the interim periods arenot necessarily indicative of the results that* maybe expected for the year ending December 31, 2025*, due to real estate market fluctuations, available mortgage lending rates and other unknown factors. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the2024 year end Annual Report. The consolidated balance sheet*** as of December 31, 2024** *has been derived from the audited consolidated financial statements included in the2024 year end Annual Report.

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Principles of Consolidation. The accompanying consolidated financial statements include the accounts of Presidio Property Trust, Inc. and its subsidiaries, NetREIT Advisors, LLC and Dubose Advisors LLC (collectively, the “Advisors”), and NetREIT Dubose Model Home REIT, Inc. The consolidated financial statements also include the results of the NetREIT Partnerships and the Model Home Partnerships. As used herein, references to the “Company” include references to Presidio Property Trust, Inc., its subsidiaries, and the partnerships. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company classifies the noncontrolling interests in the NetREIT Partnerships as part of consolid ated net (loss) income in2025 and2024 and has included the accumulated amount of noncontrolling interests as part of equity since inception in* February 2010.If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interest will be remeasured, with the gain or loss reported in the consolidated statements of operations. Management has evaluated the noncontrolling interests and determined that they donot* contain any redemption features.

Use of Estimates. The consolidated financial statements were prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include private warrants, the allocation of purchase price paid for property acquisitions between the components of land, building and intangible assets acquired including their useful lives, valuation of long-lived assets, and the allowance for doubtful accounts, which is based on an evaluation of the tenants’ ability to pay. Actual results could differ from those estimates.

***Real Estate Assets and Lease Intangibles.***Land, buildings and improvements are recorded at cost, including tenant improvements and lease acquisition costs (including leasing commissions, space planning fees, and legal fees). The Company capitalizes any expenditure that replaces, improves, or otherwise extends the economic life of an asset, while ordinary repairs and maintenance are expensed as incurred. The Company allocates the purchase price of acquired properties between the acquired tangible assets and liabilities (consisting of land, buildings, tenant improvements, and long-term debt) and identified intangible assets and liabilities (including the value of above-market and below-market leases, the value of in-place leases, unamortized lease origination costs and tenant relationships), in each case based on their respective fair values.

The Company allocates the purchase price to tangible assets of an acquired property based on the estimated fair values of those tangible assets, assuming the property was vacant. Estimates of fair value for land, building and building improvements are based on many factors, including, butnot limited to, comparisons to other properties sold in the same geographic area and independentthird-party valuations. In estimating the fair values of the tangible assets, intangible assets, and liabilities acquired, the Company also considers information obtained about each property as a result of its pre‑acquisition due diligence, marketing and leasing activities.

The value allocated to acquired lease intangibles is based on management’s evaluation of the specific characteristics of each tenant’s lease. Characteristics considered by management in allocating these values include, but arenot limited, to the nature and extent of the existing business relationships with the tenant, growth prospects for developing new business with the tenant, the remaining term of the lease, the tenant’s credit quality, and other factors.

The value attributable to the above-market or below-market component of an acquired in-place lease is determined based upon the present value (using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of rents that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above or below-market leases are amortized on a straight-line basis as an increase or reduction of rental income over the remaining non-cancelable term of the respective leases. Amortization of above and below-market rents resulted in a net increase in rental income of approximately $1,022 and $1,244 in each period for thethree months ended* March 31, 2025and2024*.

The value of in-place leases and unamortized lease origination costs are amortized to expenses over the remaining term of the respe ctive leases, which range from less than a year toten years. The amount allocated to acquired in-place leases is determined based on management’s assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased.

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The amount allocated to unamortized lease origination costs is determined by what the Company would have paid to athird-party to secure a new tenant reduced by the expired term of the respective lease. The amount allocated to tenant relationships is the benefit resulting from the likelihood of a tenant renewing its lease. Amortization expense related to these assets was approximately $4,382 and $4,382 during each period for thethree months ended* March 31, 2025and2024*, respectively.

Deferred Leasing Costs.Costs incurred in connection with successful property leases are capitalized as deferred leasing costs and amortized to leasing commission expense on a straight-line basis over the terms of the related leases which generally range fromone tofive years. Deferred leasing costs consist of third-party leasing commissions. Management re-evaluates the remaining useful lives of leasing costs as the creditworthiness of the tenants and economic and market conditions change. If management determines the estimated remaining life of the respective lease has changed, the amortization period is adjusted. At March 31, 2025 and December 31, 2024, the Company had net deferred leasing costs of approxima tely $1.4 million and $1.7 million, respectively. Total amortization expense for the three months ended March 31, 2025, was approximately $134,776. Total amortization expense for thethree months ended* March 31, 2024*, was approximately $124,822.

Cash, Cash Equivalents and Restricted Cash.At March 31, 2025 and December 31, 2024, we had approximately $12.0 million and $8.0 million in cash, cash equivalents and restricted cash, respectively, of which approximately $4.0 million and $5.0 million represented restricted cash, respectively. The Company considers all short-term, highly liquid investments that are both readily convertible to cash and have an original maturity ofthree months or less at the date of purchase to be cash equivalents. Items classified as cash equivalents include money market funds and short-term bonds. Cash balances in individual banks* mayexceed the federally insured limit of$250,000* by the Federal Deposit Insurance Corporation (the "FDIC").No losses have been experienced related to such accounts. At* March 31, 2025* and* December 31, 2024*, the Company had approximately $5.3 million and $1.0 million, respectively, in deposits in financial institutions that exceeded the federally insurable limits. Restricted cash consists of cash held in escrow by lenders pursuant to certain loan agreements, which are for payment of property taxes, insurance, leasing costs, future debt payments, and capital expenditures.

Real Estate Held for Sale and Discontinued Operations. We generally reclassify assets to "held for sale" when the disposition has been approved, it is available for immediate sale in its present condition, we are actively seeking a buyer, and the disposition is considered probable withinone year. Additionally, real estate sold during the current period is classified as “real estate assets held for sale” for all prior periods presented in the accompanying consolidated financial statements. Mortgage notes payable related to the real estate sold during the current period are classified as “mortgage notes payable related to properties held for sale” for all prior periods presented in the accompanying consolidated financial statements. Additionally, we record the operating results related to real estate that has been disposed of as discontinued operations for all periods presented if the operations have been eliminated and represent a strategic shift and we willnot have any significant continuing involvement in the operations of the property following the sale. As of* March 31, 2025*,one commercial property, Dakota Center, and10 model homes were classified as "held for sale".

Deferred Offering Costs. Deferred offering costs represent legal, accounting and other direct costs related to our offerings. As of* March 31, 2025* and* December 31, 2024*, we have incurred approximately $60,000 andzero, respectively, in deferred offering costs.

***Impairments of Real Estate Assets.*We regularly review for impairment on a property-by-property basis. Impairment is recognized on a property held for use when the expected undiscounted cash flows for a property are less than the carrying amount at which time the property is written-down to fair value. Impairment is recognized on a property held for sale when the fair value less costs to sell is less than the carrying amount. 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. Actual results could be significantly different from the estimates. Although our strategy is to hold our properties over the long-term, if our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss maybe recognized to reduce the property to fair value and such loss could be material.

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 thethree months ended* March 31, 2025and2024*, we recognized non-cash impairment charges of approximately $26,943 and $0.1 million, respectively, related to model homes.

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The new impairment charges for the model homes, during thethree months ended* March 31, 2025*, reflects the estimated sales prices for these specific model homes in* Apriland May 2025as a result of an abnormally short hold period, less thantwo* years, on model homes purchased in2022. As noted below in footnote3 -Recent Real Estate Transactions, during thethree months ended* March 31, 2025*, we sold 6 model homes for approximately $2.8 million, net of sales costs, and the Company recognized a net gain of approximately $0.2 million.

Fair Value Measurements. Certain assets and liabilities are required to be carried at fair value, or if long-lived assets are deemed to be impaired, to be adjusted to reflect this condition. The guidance requires disclosure of fair values calculated under each level of inputs within the following hierarchy:

When available, we utilize quoted market prices from independentthird-party sources to determine fair value and classify such items in Level1 or Level2**. In instances where the market for a financial instrument isnot active, regardless of the availability of a nonbinding quoted market price, observable inputs mightnot be relevant and could require us to make a significant adjustment to derive a fair value measurement.

Additionally, in an inactive market, a market price quoted from an independentthird-party* mayrely more on models with inputs based on information available only to that independentthird*-party. When we determine the market for a financial instrument owned by us to be illiquid or when market transactions for similar instruments donot appear orderly, we use several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establish a fair value by assigning weights to the various valuation sources. As of* March 31, 2025*, we didnot hold any marketable securities, excluding our investments in Conduit's common stock and common stock warrants. As of* December 31, 2024*, our marketable securities (excluding our investments in Conduit's common stock and common stock warrants), held at athird party broker, presented on the consolidated balance sheets within other assets were measured at fair value using Level1 market prices and totaled approximately zero, with a cost basis of approximatelyzero. There wereno financial liabilities measured at fair value as of* March 31, 2025* and* December 31, 2024**.*

On* April 22, 2024,the Company entered into a lockup agreement with Conduit pursuant to which the Company agreednot* to transfer or sell 2,700,000 of its 4,015,250 shares of Conduit common stock for a period ofone year. In consideration for entering into the lockup agreement, Conduit issued the Company a warrant ("Private CDT Warrants") to purchase 540,000 shares of common stock at an exercise price of $3.12 per share, with atwo year term and exercisableone year after the date of issue. The Private CDT Warrants meet the ASC321, Investments - Equity Securities ("ASC321") scope exception for derivative instruments and are accounted for as a derivative under ASC815, Derivatives and Hedging ("ASC815"). 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 Level3* fair value measurement, and subsequently adjusted tozero during thethird quarter of2024. As of* March 31, 2025*, the Private CDT Warrants fair value was still at zero, and is included in the total Investment in Conduit Pharmaceuticals marketable securities on the* March 31, 2025* 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 Level1 market prices, taking into account the adoption of ASU2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, and totaled approximately $29,519 as of* March 31, 2025*. The combined value of our Investment in Conduit Pharmaceuticals marketable securities, including the Private CDT Warrants, totaled $29,519 as of* March 31, 2025*. Our investments in Conduit's common stock and public common stock warrants presented on the consolidated balance sheet were measured at fair value using Level1 market prices as of* December 31, 2024*, and totaled approximately $0.2 million. 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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Earnings per share (“EPS”).The EPS on common stock has been computed pursuant to the guidance in FASB ASC Topic260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted stock, which contains rights to receive non-forfeitable dividends, as participating securities requiring thetwo-class method of computing net income per share of common stock. In accordance with thetwo-class method, earnings per share have been computed by dividing the net income less net income attributable to unvested restricted shares by the weighted average number of shares of common stock outstanding less unvested restricted shares. Diluted earnings per share is computed by dividing net income by the weighted average shares of common stock and potentially dilutive securities outstanding in accordance with the treasury stock method.

Dilutive common stock equivalents include the dilutive effect of in-the-money stock equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common stock equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common stock shares are considered anti-dilutive and thus are excluded from the calculation. Securities that are excluded from the calculation of weighted average dilutive common stock, because their inclusion would have been antidilutive, are:

***Variable Interest Entity.*We determine whether an entity is a Variable Interest Entity ("VIE") and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. Our determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether we participated in the design of the entity and the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk basedfirst on a qualitative analysis, and then a quantitative analysis, if necessary.

We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. A reporting entity is determined to be the primary beneficiary if it holds a controlling financial interest in the VIE. Determining which reporting entity, if any, has a controlling financial interest in a VIE is primarily a qualitative approach focused on identifying which reporting entity has both: (i) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.

We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance, including, butnot limited to, the ability to direct operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion continually. We consolidate any VIE of which we are the primary beneficiary.

Immaterial Error Corrections. During thesecond quarter of2024, 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 ASC718. Compensation - Stock Compensation. Accordingly, the Company’s accompanying consolidated balance sheets and consolidated statements of changes in equity as of* December 31, 2023,and for thethree* months ended* March 31, 2024,*respectively, reflects an adjustment to include restricted stock compensation.

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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, thethree* months ended* March 31, 2024includes restricted stock compensation of $317,077. The corrections didnot* affect Consolidated Statements of Operations or Consolidated Statements of Cash Flows in any prior periods.

During thefourth quarter of2024, 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 thethree months ended* March 31,*2024, the total fees reclassified amounted to $220,620. There wasno change to total revenues in either period.

During thethird quarter of2024, management determined that the consolidated statements of cash flows for thenine months ended* September 30, 2023and 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 thethree* months ended* March 31, 2024*, $247,360 should have been disclosed as a supplemental disclosure of cash flow information as paid building and tenant improvements from a prior year and adjusted accounts payable. Additionally, payment of debt issuance costs included in accounts payable, totaling $18,131, should have been under cash flows from financing activities. These errors impact the consolidated statement of cash flows and donot 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 thethree months ended* March 31, 2024*, reflects an adjustment to reduce net cash used in operating activities by $265,491, a decrease in net cash provided by financing activities by $247,360 and an increase in cash used in financings activities by$18,131.

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 didnot affect net income in the prior year's consolidated statement of operations.

***Subsequent Events.***We evaluate subsequent events up until the date the consolidated financial statements are issued.

Recently Issued and Adopted Accounting Pronouncements. In* December 2023,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")2023-09, Income Taxes, to enhance income tax disclosures, provide more information about tax risks and opportunities present in worldwide operations, and to disaggregate existing income tax disclosures. The guidance is effective for annual periods beginning after December 15, 2024on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. We have adopted ASU2023*-09 and have updated our financial statement disclosures accordingly.

In* November 2023,FASB issued Accounting Standards Update ASU2023*-07, Segment Reporting, establishing improvements to reportable segments disclosures to enhance segment reporting under Topic280. 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 Topic280, not just entity level disclosures. The guidance will be effective for fiscal years beginning after* December 15, 2023and interim periods within fiscal years beginning after December 15, 2024and the amendments should be applied retrospectively to all periods presented in the financial statements. We have adopted ASU2023*-07 and have updated our segment financial statement disclosures accordingly.

In* March 2024,the SEC issued final climate-disclosure rules to enhance and standardize climate‐related disclosures by public companies. With regards to financial statements, the rules requires disclosure of (i) capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, subject to applicableone* percent and de minimis disclosure thresholds; (ii) capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates (RECs) if used as a material component of a company's plans to achieve its disclosed climate-related targets or goals; and (iii) if the estimates and assumptions the company uses to produce the financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted. The rules are effective for annual periods beginning* January 1, 2025and are to be applied prospectively. On April 4, 2024,*the SEC voluntarily stayed the rules pending judicial review as a result of litigation.

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In* November 2024,FASB issued Accounting Standards Update ASU2024*-03, Income Statement—Reporting Comprehensive, Income—Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses (“ASU2024-03”). 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). The amendments in this ASU are effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027.Early adoption is permitted. In January 2025,this was updated by ASU2025*-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Clarifying the Effective Date. The amendment in this Update amends the effective date of Update2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after* December 15, 2026,and interim periods within annual reporting periods beginning after December 15, 2027.Early adoption of Update2024*-03 is permitted. We havenot yet adopted ASU2024-03 and are currently evaluating the impact on our financial statement disclosures.

3. RECENT REAL ESTATE TRANSACTIONS

Acquisitions during thethree months ended March 31, 2025*******:***

Acquisitions during thethree months ended March 31, 2024*:***

Dispositions during thethree months ended March 31, 2025*******:***

Dispositions during the three months ended March 31, 2024*****:***

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4. REAL ESTATE ASSETS

The Company owns a diverse portfolio of real estate assets. The primary types of properties the Company invests in are office, industrial, retail, and triple-net leased model home properties. We have three commercial properties located in Colorado, four in North Dakota, one in Southern California, one in Texas andone in Maryland. Our model home properties are located infour states. As of* March 31, 2025*, the Company owned or had an equity interest in:

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

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For thethree months ended* March 31, 2025*, depreciation expense totaled approximately $1.1 million. For thethree months ended* March 31, 2024*, depreciation expense totaled approximately $1.2 million.

5. LEASE INTANGIBLES

The following table summarizes the net value of other intangible assets acquired and the accumulated amortization for each class of intangible asset:

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At* March 31, 2025*, and* December 31, 2024*, there wereno gross lease intangible assets and accumulated amortization related to the lease intangible assets included in real estate assets held for sale.

The net value of acquired intangible liabilities was approximately $7,047 and $8,625 relating to below-market leases at* March 31, 2025* and* December 31, 2024*, respectively.

Future aggregate approximate amortization expense for the Company's lease intangible assets is as follows:

6. OTHER ASSETS

Other assets consist of the following:

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7. MORTGAGE NOTES PAYABLE

Mortgage notes payable consist of the following:

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The loan agreement between NetREIT Model, Homes, Inc. (“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 (i) principal payments paid for the period ended as of such date plus (ii) interest expense for period ended as of such date. The FCCR is to beno less than 1.10 to1.00, tested at the end of each fiscal quarter. As of* March 31, 2025*, NRMH was in compliance with this covenant. The Company and standalone subsidiaries have other various quarterly and annual reporting requirements to the individual property lenders and the Company is in compliance with all material conditions and covenants on those mortgage notes payable as of* March 31, 2025*, with the exception for Dakota Center's loan maturity.

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

8. NOTES PAYABLE

On* April 22, 2020,the Company received an Economic Injury Disaster Loan of $10,000 from the Small Business Administration ("SBA") to provide economic relief during the COVID-19 pandemic. This loan advance isnot* required to be repaid, hasno stipulations on use, and has been recorded as fees and other income in the consolidated statements of operations during fiscal2020. On* August 17, 2020,we received an additional Economic Injury Disaster Loan ("EIDL") of $150,000, for which principal and interest payments are deferred fortwelve* months from the date of issuance, and interest accrues at3.75% per year. The loan matures on* August 17, 2050.We have used the funds for general corporate purposes to alleviate economic damage caused by the COVID-19 pandemic, which economic injury included abating or deferring rent to certain tenants (primarily retail tenants). As of March 31, 2025* and* December 31, 2024*, the principal balance on the SBA loan was approximately $143,229 and $144,089, respectively.

During2023, we had issuedone promissory note to our majority owned subsidiary, Dubose Model Home Investors202 LP, for the refinancing ofone model home property in Texas, for approximately $0.3 million with an interest rate of 5.55% per annum and original maturity date of* August 15, 2024,which was extended for another year with an interest rate of 8.0% per annum. This note payable and note receivable, including interest expense and interest income related to this promissory note, is eliminated through consolidation on our financial statements. This property was subsequently sold in October 2024,and the loan was paid in full. As of March 31, 2025*, there wereno other notes payable.

9. INVESTMENT IN CONDUIT PHARMACEUTICALS

Sponsorship of Special Purpose Acquisition Company. 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 Pharmaceuticals Inc ("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 a1*-for-100 reverse stock split (the “Reverse Stock Split”) of the outstanding shares of Conduit’s common stock. The Reverse Stock Split became effective on* January 24, 2025at5:00* p.m., Eastern Time (the “Effective Time”) and the new CDT shares began trading on The Nasdaq Global Market on a Reverse Stock Split-adjusted basis on* January 27, 2025at market open under the existing ticker symbol, “CDT.” As of the Effective Time, every100* shares of the Conduit's issued and outstanding common stock was combined intoone share of common stock. After the Reverse Stock Split, our remaining shares of CDT totaled 29,431, with the fractional shares being paid out in cash, totaling $0.63.

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As of* March 31, 2025*, we held 29,431 shares of CDT,709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $29,519. Conduit's common stock (CDT) and public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level1 and Level3 market prices, taking into account the adoption of ASU2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

10. COMMITMENTS AND CONTINGENCIES

The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties. As of * March 31, 2025* , approximately $1.8 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* mayretain the services of various professionals to advise us on activist stockholder matters, including legal, financial, strategic and communication advisors, the costs of which maynegatively 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 mayresult 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 SEC 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's2026* Annual Meeting of Stockholders. In connection with this appointment, our board of directors has been increased fromsix toseven 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 the2024 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 isnot* probable or estimable at this time.

***Litigation.*From time to time, we maybecome involved in various lawsuits or legal proceedings which arise in the ordinary course of business. Neither the Company nor any of the Company's properties are presently subject to any material litigation nor, to the Company's knowledge, is there any material threatened litigation.

Environmental matters.The Company monitors its properties for the presence of hazardous or toxic substances. While there can beno assurance that a material environmental liability doesnot exist, the Company isnot currently aware of any environmental liability with respect to the properties that would have a material effect on the Company's financial condition, results of operations and cash flow. Further, the Company isnot aware of any environmental liability or any unasserted claim or assessment with respect to an environmental liability that the Company believes would require additional disclosure or recording of a loss contingency.

Financial Markets. The Company monitors concerns over economic recession, interest rate increases, policy priorities of the U.S. presidential administration, trade wars, labor shortages, and inflation, any of which* maycontribute to increased volatility and diminished expectations for the economy and markets. Additionally, the economic and geopolitical ramifications of the military conflicts in the Middle East and Ukraine, including sanctions, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, could impact commercial real estate fundamentals and result in lower occupancy, lower rental rates, and declining values in our real estate portfolio and in the collateral securing our loan investments. We havenot* currently experienced a direct material impact to our Company or operations; however, we will continue to monitor the financial markets for events that could impact our commercial real estate properties.

11. STOCKHOLDERS' EQUITY

**Preferred Stock.The Company is authorized to issue up to 1,000,000 shares of Preferred Stock (the "Preferred Stock"). The Preferred Stock maybe issued from time to time inone or more series. The Board of Directors is authorized to fix the number of shares of any series of the Preferred Stock, to determine the designation of any such series, and to set the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each series of Preferred Stock.

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On* June 15, 2021,the Company completed its secondary offering of 800,000 shares of our Series D Preferred Stock for cash consideration of $25.00 per share to a syndicate of underwriters led by The Benchmark Company, LLC, as representative, resulting in approximately $18.1 million in net proceeds, after deducting the underwriting discounts and commissions and the offering expenses paid by the Company. The Company granted the underwriters a 45-day option to purchase up to an additional 120,000 shares of Series D Preferred Stock to cover over-allotments, which they exercised on June 17, 2021,*resulting in approximately $2.7 million in net proceeds, after deducting the underwriting discounts and commissions and the offering expenses paid by the Company. In total, the Company issued 920,000 shares of Series D Preferred Stock with net proceeds of approximately $20.5 million, after deducting the underwriting discounts and commissions and the offering expenses paid by the Company and deferred offering costs. The Series D Preferred Stock is listed for trading on The Nasdaq Capital Market under the symbol SQFTP. The Company has used these proceeds for general corporate and working capital purposes, including acquiring additional properties.

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. The shares of Series D Preferred Stock were sold to the public at a price of $16.00 per share. The Company agreed to an underwriting discount of 7% of the public offering price of the shares of Series D Preferred Stock sold in the offering. 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. Below are some of the key terms of the Series D Preferred Stock:

Dividends:

Holders of shares of the Series D Preferred Stock are entitled to receive cumulative cash dividends at a rate of 9.375% per annum of the $25.00 per share liquidation preference (equivalent to $2.34375 per annum per share). Dividends will be payable monthly on the15th day of each month (each, a "Dividend Payment Date"), provided that if any Dividend Payment Date isnot a business day, then the dividend that would otherwise have been payable on that Dividend Payment Date* may*be paid on the next succeeding business day without adjustment in the amount of the dividend.

Voting Rights:

Holders of shares of the Series D Preferred Stock will generally haveno voting rights. However, if the Company doesnot pay dividends on the Series D Preferred Stock foreighteen or more monthly dividend periods (whether ornot consecutive), the holders of the Series D Preferred Stock (voting separately as a class with the holders of all other classes or series of the Company's preferred stock it* may*issue upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series D Preferred Stock in the election referred to below) will be entitled to vote for the election oftwo additional directors to serve on the Company's Board of Directors until the Company pays, or declares and sets apart funds for the payment of, all dividends that it owes on the Series D Preferred Stock, subject to certain limitations.

In addition, the affirmative vote of the holders of at leasttwo-thirds of the outstanding shares of Series D Preferred Stock (voting together as a class with all other series of parity preferred stock the Company* may*issue upon which like voting rights have been conferred and are exercisable) is required at any time for the Company to (i) authorize or issue any class or series of its stock ranking senior to the Series D Preferred Stock with respect to the payment of dividends or the distribution of assets on liquidation, dissolution or winding up or (ii) to amend any provision of the Company charter so as to materially and adversely affect any rights of the Series D Preferred Stock or to take certain other actions.

Liquidation Preference:

In the event of the Company's voluntary or involuntary liquidation, dissolution or winding up, the holders of shares of Series D Preferred Stock will be entitled to be paid out of the assets the Company has legally available for distribution to its stockholders, subject to the preferential rights of the holders of any class or series of its stock the Company* mayissue ranking senior to the Series D Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of$25.00* per share, plus any accumulated and unpaid dividends to, butnot including, the date of payment, before any distribution of assets is made to holders of the Company's common stock or any other class or series of the Company's stock it* may*issue that ranks junior to the Series D Preferred Stock as to liquidation rights.

In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the Company's available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series D Preferred Stock and the corresponding amounts payable on all shares of other classes or series of the Company's stock that it issues ranking on parity with the Series D Preferred Stock in the distribution of assets, then the holders of the Series D Preferred Stock and all other such classes or series of stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

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Redemption:

Commencing on or after* June 15, 2026,the Company mayredeem, at its option, the Series D Preferred Stock, in whole or in part, at a cash redemption price equal to $25.00 per share, plus any accumulated and unpaid dividends to, butnot* including the redemption date. Prior to* June 15, 2026,upon a Change of Control (as defined in the Articles Supplementary), the Company mayredeem, at its option, the Series D Preferred Stock, in whole or part, at a cash redemption price of$25.00* per share, plus any accumulated and unpaid dividends to, butnot including the redemption date. The Series D Preferred Stock hasno stated maturity, willnot be subject to any sinking fund or other mandatory redemption, and willnot be convertible into or exchangeable for any of our other securities.

In accordance with the terms of the Series D Preferred Stock, the Series D monthly dividend has been approved by the Board of Directors through* March 31, 2025in the amount of $0.19531 per share payable on the15th* of every month to stockholders of record of Series D Preferred Stock as of the last day of the prior month. Total dividends paid to Series D Preferred stockholders during thethree months ended* March 31, 2025* were approximately $0.6 million. Total dividends paid to Series D Preferred stockholders during thethree months ended* March 31, 2024* were approximately $0.5 million.

Common Stock.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. Each class of Common Stock has identical rights, preferences, terms, and conditions except that the holders of Series B Common Stock arenot entitled to receive any portion of Company assets in the event of the Company's liquidation. No shares of Series B or Series C Common Stock have been issued. Each share of Common Stock entitles the holder toone vote. Shares of our Common Stock arenot subject to redemption and donot have any preference, conversion, exchange, or preemptive rights. The Company's charter contains restrictions on the ownership and transfer of the Common Stock that preventsone person from owning more than 9.8% of the outstanding shares of common stock. 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* March 31, 2025,*neither Mr. Heilbron nor Mr. Katz owned more than 9.8% of our outstanding shares of common stock.

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.

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. The Company evaluated the accounting guidance in ASC480* and ASC815 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. As of* March 31, 2025*, none of the Common Stock Warrants and Placement Agent Warrants have been exercised.

Genesis Plaza is owned bytwo 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 78,215 shares of SQFT Series A Common Stock in exchange for their 36.4% ownership in NetREIT Genesis II, as per the original exchange agreement at $9.30 per share.

Stock Repurchase Program. While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. Therefore, returning capital to stockholders through a repurchase program is an attractive use of capital currently. In* November 2023,the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock which expired in November 2024.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 thethree* months ended* March 31, 2025*, we didnot repurchase any shares of our Series A Common Stock.

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During thethree months ended* March 31, 2025*, the Company repurchased 12,844 shares of our Series D Preferred Stock at an average price of approximately $15.18 per share, including a commission of $0.035 per share, for a total cost of $194,971 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.

Tender Offer.On April 8, 2025,we commenced a fixed price self-tender offer to purchase for cash all odd lots plus up to 2,000,000 shares of the Company’s Series A common stock, par value $0.01 per share, properly tendered andnot properly withdrawn prior to the expiration date, subject to the Company’s ability to increase the number of shares accepted for payment in the offer by up to 2% of the Company’s outstanding common stock (resulting in an increase of up to approximately 283,080 shares) without amending or extending the offer in accordance with rules promulgated by the SEC, at$0.68 per share, net to the seller in cash, less any applicable withholding taxes and without interest (the “Offer”). The Offer expired at11:59 P.M., New York City time, on May 5, 2025.Based on the final count by the depositary for the Offer,2,144,116 shares of Class A common stock were validly and successfully tendered andnot 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 Offer, the Company accepted for purchase 2,144,116 shares of Class A common stock, including 12,086 odd lot shares. Total cash required to complete the tender offer was approximately $1,458,000, excluding fees and expenses related to the 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 didnot 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 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 Offer was a prudent use of our financial resources given our business profile, capital structure, assets and liabilities.

Cash Dividends on Common Stock and Preferred Stock.For thethree months ended March 31, 2025and2024 the Company didnot declare a cash dividend on shares of Series A Common Stock. For thethree months ended* March 31, 2025and2024*, the Company declared and paid approximately $0.6 million and $0.5 million, respectively, in cash dividends on shares of Series D Preferred Stock. Cash permitting, the Company intends to continue to pay dividends on a monthly basis to holders of our Series D Preferred Stock going forward, but there can beno guarantee the Board of Directors will approve any future dividends. The Company hasnot decided when it will resume dividends to our common stockholders on a quarterly basis. The following is a summary of distributions declared per share of our Series A Common Stock and for our Series D Preferred Stock for thethree months ended* March 31, 2025and2024*.

Series A Common Stock

Series D Preferred Stock

Partnership Interests.Through the Company, its subsidiaries, and its partnerships, we own 10 commercial properties in fee interest, two of which we own partial interests in through our holdings in various affiliates in which we serve as general partner, member and/or manager. Each of the limited partnerships is referred to as a "DownREIT." In each DownREIT, we have the right, through put and call options, to require our co-investors to exchange their interests for shares of our Common Stock at a stated price after a defined period (generallyfive years from the date theyfirst invested in the entity's real property), the occurrence of a specified event or a combination thereof. The Company is a limited partner infive partnerships and sole stockholder inone corporation, which entities purchase and leaseback model homes from homebuilders.

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12. SHARE-BASED INCENTIVE PLAN

The Company maintains a restricted stock incentive plan for the purpose of attracting and retaining officers, employees, and non-employee board members. Share awards generally vest in equal annual installments over athree-to-ten-year period from date of issuance. Non-vested shares have voting rights and are eligible for any dividends paid on shares of common stock. The Company recognized compensation cost for these fixed awards over the service vesting period, which represents the requisite service period, using the straight-line method. Prior to our IPO, the value of non-vested shares was calculated based on the offering price of the shares in the most recent private placement offering of $20.00, adjusted for stock dividends since granted and assumed selling costs, which management believed approximated fair market value as of the date of grant. 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's2017* 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's2017* 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 1st and October 1st of each year, automatically increase the maximum number of shares of common stock available under the plan to15%* of the Company's outstanding shares of common stock, if on such date 3,500,000 (as adjusted for any reverse splits) is less than15% of the Company's then-outstanding shares of common stock.

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

The non-vested restricted shares outstanding as of* March 31, 2025*, will vest over the nextone tothree years. As of* March 31, 2025*, there were approximately 63,797 shares available to grant underthe Company's2017 Incentive Award Plan. Share-based compensation expense was approximately $0.2 million and $0.5 million for thethree months ended* March 31, 2025and2024*, respectively. As of* March 31, 2025**,* future unrecognized stock compensation related to unvested shares totaled approximately $1.3 million.

13. SEGMENTS

The Company’s reportable segments consist ofthree types of real estate properties for which the Company’s chief operating decision maker (CODM), which is our Chief Executive Officer ("CEO"), as the CEO has the final decision when allocating capital and personnel to the various segments, internally evaluate operating performance and financial results: Office/Industrial Properties, Model Home Properties and Retail Properties. The Company also has certain corporate-level activities including accounting, finance, legal administration, and management information systems which arenot considered separate operating segments. There isno material inter-segment activity.

The CODM evaluates the performance of our segments based upon an internal net operating income (“NOI”), which is a non-GAAP supplemental financial measure on a quarterly basis as disclosed in the10-Qs and10-Ks. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI* may**not* be comparable to that of other real estate companies as they* mayhave different methodologies for computing this amount. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements, parking income, and other operating income, net of provision for bad debt) less rental operating costs (property operating expenses, real estate taxes, insurance, utilities, repairs and maintenance, and asset management fees) excluding interest expense. NOI excludes certain items that arenot* considered to be controllable in connection with the management of an asset such as non-property income & expenses, depreciation & amortization, real estate acquisition fees & expenses, non-cash impairments and corporate general & administrative expenses. Quarterly, the Company reviews and tests for non-cash impairments, as required by GAAP, on all our properties (i.e., Office/Industrial Properties, Retail Properties, and Model Home Properties); however, the CODM doesnot consider those non-cash impairments with evaluating the segment’s cash operations and NOI.

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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 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.

The following tables compare the Company’s segment activity and NOI and adjusted NOI for Model Home income to its results of operations and financial position as of and for thethree months ended* March 31, 2025and2024* respectively. The line items listed in the below NOI tables include the significant expense considered by the CODM for cash allocations on future investments. The Other Non-Segment & Consolidating Items represent corporate activity, the investment in Conduit Pharmaceutical, and other eliminating items for consolidation. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but isnot considered a reportable segment. 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 thethree months ended* March 31, 2025*, and* March 31, 2024*:

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Since a significant portion of the total operating expense for Retail and Office/Industrial are recouped as part of recovery revenue, the CODM looks at NOI as a whole when reviewing the segments. For the Model Home segment, the properties are leased on a triple net basis and the tenants are responsible for a significant portion of the operating expenses. Therefore, the CODM focuses on Model Home revenue, any impairments and the gain on sale of model homes.

The CODM reviews on a regular basis the GAAP performance of each segment, including the significant segment expenses reported for GAAP shown in the table below. Our significant segment expenses include consolidated expense categories presented in our consolidated statements of operations, as well as rental operating costs. This information is provided to the CODM and factors into the CODM’s decision making for company-wide strategy. The following tables compare the Company’s segment activity and to its results of GAAP operations and financial position as of and for thethree months ended* March 31, 2025and2024*, respectively. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but isnot considered a reportable segment as noted above.

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14. INCOME TAX PROVISION

We have elected to be taxed as a REIT under the Internal Revenue Code of1986, as amended, commencing with the taxable year ended* December 31, 2000.As a REIT, U.S. federal income tax law generally requires us to distribute annually at least90%* of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than100% of our net taxable income. We are also subject to U.S. federal, state and local income taxes on our domestic taxable REIT subsidiaries ("TRS") based on the tax jurisdictions in which they operate.

During thethree months ended* March 31, 2025and2024*, we recorded a current income tax provision(benefit) of $25,409 and $79,565, respectively, related to activities of our taxable REIT subsidiaries. There was a $0.3 million and $0.3 million income tax asset related to the operating activities of our TRS entities as of* March 31, 2025* and* December 31, 2024*, respectively.

We have calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the projected full fiscal year to the TRS pretax income or loss excluding unusual or infrequently occurring discrete items for the reporting period, and have accounted for the REIT's federal refunds and minimum state income taxes as a discrete item in the reporting period.

In* December 2023,the FASB issued ASU2023*-09 "Improvements to Income Tax Disclosures" ("ASU2023-09"). ASU2023-09 intends to improve the transparency of income tax disclosures. ASU2023-09 is effective for fiscal years beginning after* December 15, 2024and is to be adopted on a prospective basis with the option to apply retrospectively. The Company adopted the disclosures on a prospective basis, which didnot* create a material impact to our consolidated financial statements.

15. RELATED PARTY

During thethree months ended* March 31, 2025* andthree months ended* March 31, 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 $3,378 and $2,688, respectively.

Additionally, we received full payroll reimbursement for employee services provided to Centurion Counsel and Puppy Toes, Inc. during thethree months ended* March 31, 2025and2024*, which totaled approximately $23,640 and $35,916, respectively. These reimbursements were at cost and werenot marked up or discounted. As of* March 31, 2025* and* December 31, 2024*, we had reimbursement receivable balances of approximately $9,811 and $12,376 which were paid in full during* April 2025and January 2024,*respectively.

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During thethree months ended* March 31, 2024,the Company used the services of a former officer and director, Larry Dubose, for consulting on our Model Home Partnerships, and the setup of Dubose Model Home Investors#207.* The Company paid Mr. Dubose a total of $131,250 in consulting payments for thethree months ended* March 31, 2024.Additionally, a trust controlled by Mr. Dubose is an investor in many of our Model Home Partnerships, and as such received pro-rata distributions and return of capital payments during thethree* months ended* March 31, 2024,totaling $67,262. During thethree* months ended* March 31, 2025,*the Company paid Mr. Dubose $12,500 in consulting fees and $3,780 in pro-rata distributions and return of capital payments. Mr. Dubose is the father-in-law of Steve Hightower, the President of our Model Home Division and a director.

For the fiscal year ended* December 31, 2024,the Company paid to Mr. Dubose, inclusive of the payments made in the quarter ended March 31, 2024described above, $191,250. Through his ownership of a trust that is an investor in many of our Model Home Partnerships, Mr. Dubose received pro-rata distributions and return of capital payments of $101,889 during the year ended December 31, 2024,inclusive of pro-rata distributions and return of capital payments received in thethree* months ended* March 31, 2024*described above.

16. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date the financial statements were issued. Based upon this review, except as disclosed below, the Company didnot identify any subsequent events that would have required adjustment or disclosure in the financial statements other than those disclosed below.

On* April 7, 2025,the Company declared, a dividend on its9.375%* Series D Cumulative Redeemable Perpetual Preferred Stock (the “Series D Preferred Stock”) for the months of* April 2025,** May 2025and June 2025.In accordance with the terms of the Series D Preferred Stock, the April 2025Series D dividend will be payable in cash in the amount of $0.19531 per share on May 15, 2025,to stockholders of record of Series D Preferred Stock as of the dividend record date of April 30, 2025.The May 2025Series D dividend will be payable in cash in the amount of $0.19531 per share on June 16, 2025,to stockholders of record of Series D Preferred Stock as of the dividend record date of May 31, 2025.The June 2025Series D dividend will be payable in cash in the amount of $0.19531 per share on July 15, 2025,to stockholders of record of Series D Preferred Stock as of the dividend record date of June 30, 2025.*

During* April 2025,the Company acquired five Model Home Properties located in Texas. The purchase for these properties was $3.3 million. The purchase price consisted of cash payments of $1.0 million and mortgage notes of $2.3 million. During April 2025,the Company has sold three model homes for a total of approximately $1.5 million. The homes were purchased between2020* and2022 with a total acquisition price of approximately $1.4 million.

On* April 8, 2025,we commenced the Offer, a fixed price self-tender offer to purchase for cash all odd lots plus up to 2,000,000 shares of the Company’s Series A common stock, par value $0.01 per share, properly tendered andnot* properly withdrawn prior to the expiration date, subject to the Company’s ability to increase the number of shares accepted for payment in the offer by up to 2% of the Company’s outstanding common stock (resulting in an increase of up to approximately 283,080 shares) without amending or extending the offer in accordance with rules promulgated by the SEC, at$0.68 per share, net to the seller in cash, less any applicable withholding taxes and without interest. The Offer expired at11:59 P.M., New York City time, on* May 5, 2025.Based on the final count by the depositary for the Offer,2,144,116 shares of Class A common stock were validly and successfully tendered andnot* 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 Offer, the Company accepted for purchase 2,144,116 shares of Class A common stock, including 12,086 odd lot shares. Total cash required to complete the tender offer was approximately $1,458,000, excluding fees and expenses related to the 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 didnot 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 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 Offer was a prudent use of our financial resources given our business profile, capital structure, assets and liabilities.

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