Presidio Property Trust, Inc.

Previous wording

Revenues. Total revenues were approximately $4.4 million for the three months ended June 30, 2025, compared to approximately $4.6 million for the same period in 2024. As of June 30, 2025, we had approximately $114.6 million in net real estate assets including 87 model homes, compared to approximately $130.9 million in net real estate assets including 80 model homes at June 30, 2024. The average number of model homes held during the three months ended June 30, 2025 and 2024 was 85 and 84, respectively. The change in revenue is directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 7, 2025.

Current wording

Revenues. Total revenues were approximately $4.2 million for the three months ended September 30, 2025, compared to approximately $4.7 million for the same period in 2024. As of September 30, 2025, we had approximately $113.3 million in net real estate assets including 84 model homes, compared to approximately $131.4 million in net real estate assets including 83 model homes at September 30, 2024. The average number of model homes held during the three months ended September 30, 2025 and 2024 was 86 and 82, respectively. The change in revenue is directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 7, 2025.

Previous wording

Rental Operating Costs. Rental operating costs totaled approximately$1.5 million for the*** three months ended June 30, 2025, ***compared to approximately $1.5 million for the same period in 2024. Rental operating costs as a percentage of total revenue was approximately 33% for both the three months ended June 30, 2025 and 2024, respectively. We expect rental operating costs to go down in future quarters due to the sale of our retail properties UTC and Research Parkway during February 2025; however, if we purchase additional properties, our rental operating costs will increase.

Current wording

Rental Operating Costs. Rental operating costs totaled approximately$1.5 million for the*** three months ended September 30, 2025, ***compared to approximately $1.6 million for the same period in 2024. Rental operating costs as a percentage of total revenue was approximately 34% for both the three months ended September 30, 2025 and 2024, respectively.

Previous wording

General and Administrative Expenses. G&A expenses for the*** ***three months ended June 30, 2025 and 2024 totaled approximately $1.2 million and $2.2 million, respectively. G&A expenses as a percentage of total revenue was 27.9%and 48.0%for the three months ended June 30, 2025 and 2024, respectively. G&A expenses for the three months ended June 30, 2025 decreased by approximately $1.0 million partially related to consulting fees in 2024 and additional legal fees related to Zuma Capital Management, LLC (Zuma Capital"), which was not repeated in 2025. During the three months ended June 30, 2025, we also reduced our accrual for board fees by $130,000, as cash payments were replaced with stock compensation, and we reduced our accrual for income tax preparation fees.

Current wording

General and Administrative Expenses. G&A expenses for the*** ***three months ended September 30, 2025 and 2024 totaled approximately $1.5 million and $1.6 million, respectively. G&A expenses as a percentage of total revenue was 34.6%and 34.5%for the three months ended September 30, 2025 and 2024, respectively. G&A expenses for the three months ended September 30, 2025 decreased by approximately $0.2 million partially related to a decrease in bonus expense totaling approximately $115,163 for executives and officers. Additionally, stock compensations decreased by approximately $59,574.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense wasapproximately$1.2 million and $1.4 millionfor thethree months ended June 30, 2025 and 2024, respectively, directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 7, 2025.

Current wording

Depreciation and Amortization. Depreciation and amortization expense wasapproximately$1.2 million and $1.5 millionfor thethree months ended September 30, 2025 and 2024, respectively, directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 7, 2025.

Previous wording

Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the three months ended June 30, 2025 and 2024, we recognized non-cash impairment charges of approximately $0.1 million related to one model home property and approximately $0.1 million related to four model homes, respectively, based on estimated selling prices. Additionally, during the three months ended June 30, 2025, in connection with the pending sale of Dakota Center, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million, with the short sale expected to take place during the third quarter of 2025, which will include a discounted payoff for the non-recourse loan. We also recorded an impairment charge of approximately $0.9 million, on our Shea Center II property, based on current market conditions, occupancy rates, and the estimated hold period of the property.

Current wording

Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the three months ended September 30, 2025 and 2024, we recognized non-cash impairment charges of approximately $0.1 million related to four model home properties and approximately $0.7 million related to three model homes and one commercial property (Dakota Center).

Previous wording

Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $1.5 millionfor thethree months ended June 30, 2025, compared toapproximately $1.5 millionfor the same period in 2024. The weighted average interest rate on our outstanding debt was 5.90% and 5.38% as of June 30, 2025 and 2024, respectively. Mortgage notes payable totaled approximately $95.4 million and $102.0 million as of June 30, 2025 and 2024, respectively. The decrease in mortgage notes payable is a direct result of the sale of our two commercial properties during February 2025 and the change in the number of model homes.

Current wording

Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $1.5 millionfor thethree months ended September 30, 2025, compared toapproximately $1.5 millionfor the same period in 2024. The weighted average interest rate on our outstanding debt was 6.17% and 5.44% as of September 30, 2025 and 2024, respectively. Mortgage notes payable totaled approximately $94.6 million and $103.2 million as of September 30, 2025 and 2024, respectively. The decrease in mortgage notes payable is a direct result of the sale of our two commercial properties during February 2025.

Previous wording

Income allocated to non-controlling interests. Income allocated to non-controlling interests for thethree months ended June 30, 2025 and 2024 totaled approximately $0.2 millionand $0.5 million, respectively. This was directly related to the gain on sales of model homes held byour affiliated limited partnerships.

Current wording

Income allocated to non-controlling interests. Income allocated to non-controlling interests for thethree months ended September 30, 2025 and 2024 totaled approximately $5,635 and $0.4 million, respectively. This was directly related to the gain on sales of model homes held byour affiliated limited partnerships.

Previous wording

Loss on Conduit remeasurement. As of June 30, 2025, we had sold our remaining 29,431 shares of CDT for $13,990, and held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $7,728. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03*Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.*During the three months ended June 30, 2025, we recorded a loss on Conduit's marketable securities of $7,802, compared to a loss of approximately $10.0 million during the three months ended June 30, 2024.

Current wording

Loss on Conduit remeasurement. As of September 30, 2025, we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $7,515. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03*Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.*During the three months ended September 30, 2025, we recorded a loss on Conduit's marketable securities of $213, compared to a loss of approximately $3.9 million during the three months ended September 30, 2024.

Previous wording

RESULTS OF OPERATIONS FOR THE six MONTHS ENDED June 30, 2025 and 2024

Current wording

RESULTS OF OPERATIONS FOR THE nine MONTHS ENDED September 30, 2025 and 2024

Previous wording

Revenues. Total revenues were approximately $8.5 million for the six months ended June 30, 2025, compared to approximately $9.4 million for the same period in 2024. As of June 30, 2025, we had approximately $114.6 million in net real estate assets including 87 model homes, compared to approximately $130.9 million in net real estate assets including 80 model homes at June 30, 2024. The average number of model homes held during the six months ended June 30, 2025 and 2024 was 83 and 93, respectively. The change in revenue is directly related to the decrease in model home rental income and transaction fees during the current period, and the sale of our two commercial properties on February 7, 2025.

Current wording

Revenues. Total revenues were approximately $12.7 million for the nine months ended September 30, 2025, compared to approximately $14.1 million for the same period in 2024. As of September 30, 2025, we had approximately $113.3 million in net real estate assets including 84 model homes, compared to approximately $131.4 million in net real estate assets including 83 model homes at September 30, 2024. The average number of model homes held during the nine months ended September 30, 2025 and 2024 was 81 and 93, respectively. The change in revenue is directly related to the decrease in model home rental income and transaction fees during the current period, and the sale of our two commercial properties on February 7, 2025.

Previous wording

Rental Operating Costs. Rental operating costs totaled approximately $3.1 million for the*** six months ended June 30, 2025, ***compared to approximately $3.1 million for the same period in 2024. Rental operating costs as a percentage of total revenue was 36.2% and 32.6% for the six months ended June 30, 2025 and 2024, respectively. We expect rental operating costs to go down in future quarters due to the sale of our retail properties UTC and Research Parkway during February 2025; however, if we purchase additional properties, our rental operating costs will increase.

Current wording

Rental Operating Costs. Rental operating costs totaled approximately $4.6 million for the*** nine months ended September 30, 2025, ***compared to approximately $4.7 million for the same period in 2024. Rental operating costs as a percentage of total revenue was 36.3% and 33.0% for the nine months ended September 30, 2025 and 2024, respectively. We expect rental operating costs to continue to be down year over year at December 31, 2025 due to the sale of our retail properties UTC and Research Parkway during February 2025; however, if we purchase additional properties during the fourth quarter of 2025, our rental operating costs could increase.

Previous wording

General and Administrative Expenses. G&A expenses for the*** ***six months ended June 30, 2025 and 2024 totaled approximately $2.9 million and $4.3 million, respectively. G&A expenses as a percentage of total revenue was 33.9%and 45.7%for the six months ended June 30, 2025 and 2024, respectively. G&A expenses for the six months ended June 30, 2025 decreased by approximately $1.4 million partially related to consulting fees in 2024 including a one-time payment for the setup of DMH 207, and additional legal fees related to Zuma Capital Management, LLC (Zuma Capital"), which was not repeated in 2025. Additionally, during the six months ended June 30, 2025, we also reduced our accrual for board fees by $130,000, as cash payments were replaced with stock compensation, our accrual for income tax preparation fees, and companywide bonus accruals were down approximately $127,000.

Current wording

General and Administrative Expenses. G&A expenses for the*** ***nine months ended September 30, 2025 and 2024 totaled approximately $4.3 million and $5.9 million, respectively. G&A expenses as a percentage of total revenue was 34.1%and 42.0%for the nine months ended September 30, 2025 and 2024, respectively. G&A expenses for the nine months ended September 30, 2025 decreased by approximately $1.6 million partially related to consulting fees in 2024 including a one-time payment for the setup of DMH 207, and additional legal fees related to Zuma Capital Management, LLC (Zuma Capital"), which was not repeated in 2025. Additionally, during the nine months ended September 30, 2025, we also reduced our accrual for board fees, income tax preparation fees, and companywide bonus.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense wasapproximately $2.5 million and $2.7 millionfor the six months ended June 30, 2025 and 2024, respectively.

Current wording

Depreciation and Amortization. Depreciation and amortization expense wasapproximately $3.7 million and $4.2 millionfor the nine months ended September 30, 2025 and 2024, respectively. The decrease is directly related to the saleof our retail properties UTC and Research Parkway during February 2025.

Previous wording

Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the six months ended June 30, 2025 and 2024, we recognized non-cash impairment charges of approximately $0.1 million and $0.2 million, respectively, related to model homes properties, based on estimated selling prices. Additionally, during the six months ended June 30, 2025, in connection with the pending sale of Dakota Center, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million, with the short sale expected to take place during the third quarter of 2025, which will include a discount payoff for the non-recourse loan. We also recorded an impairment charge of approximately $0.9 million, on our Shea Center II property, based on current market conditions, occupancy rates, and the estimated hold period of the property.

Current wording

Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the nine months ended September 30, 2024, we recognized a non-cash impairment charge of approximately $0.9 million related to model homes and one commercial property. The impairment on our commercial property, Dakota Center, was the result of the loan maturing in July 2024 and the Company not being able to reach an agreement with the lenders regarding a loan modification or extension. In October the lender agreed to a sale of the property to settle the balance of the non-recourse loan. Due to the uncertainties in the Fargo market, we decided to impair the property’s book value, in accordance with ASC 360-10 impairment of long-lived assets and for long-lived assets to be disposed of, to be in line with the current loan balance and estimated closing costs, which is the expected sales price. As such, we recorded an impairment charge of approximately $0.7 million, as of September 30, 2024. The new impairment charges for the model homes reflects the estimated and actual sales prices for these specific model homes that were sold after the end of each quarter. This was the result of an abnormally short hold period, less than two years, on model homes purchased in 2022. The builder changed their product style in the neighborhoods where these model homes are located, in Texas, after we had purchased the homes. We do not believe these losses are indicative of our overall model home portfolio. During the nine months ended*** ***September 30, 2025, we recognized non-cash impairment charges of approximately $0.1 million, related to seven model homes properties, based on estimated selling prices. Additionally, during the nine months ended September 30, 2025, in connection with the pending sale of Dakota Center, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million, with the short sale expected to take place during the fourth quarter of 2025, which will include a discount payoff for the non-recourse loan. During the nine months ended September 30, 2025, we also recorded an impairment charge of approximately $0.9 million, on our Shea Center II property, based on current market conditions, occupancy rates, and the estimated hold period of the property.

Previous wording

Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $3.0 millionfor thesix months ended June 30, 2025, compared toapproximately $3.0 millionfor the same period in 2024. The weighted average interest rate on our outstanding debt was 5.90% and 5.38% as of June 30, 2025 and 2024, respectively. Mortgage notes payable totaled approximately $95.4 million and $102.3 million as of June 30, 2025 and 2024, respectively. The decrease in mortgage notes payable is a direct result of the sale of our two commercial properties during February 2025 and the change in the number of model homes.

Current wording

Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $4.5 millionfor thenine months ended September 30, 2025, compared toapproximately $4.5 millionfor the same period in 2024. The weighted average interest rate on our outstanding debt was 6.17% and 5.44% as of September 30, 2025 and 2024, respectively. Mortgage notes payable totaled approximately $94.6 million and $102.3 million as of September 30, 2025 and 2024, respectively. The decrease in mortgage notes payable is a direct result of the sale of our two commercial properties during February 2025 and the change in the number of model homes.

Previous wording

Income allocated to non-controlling interests. Income allocated to non-controlling interests for the six months ended June 30, 2025 and 2024 totaled approximately $0.3 million and $2.0 million, respectively. This was directly related to the gain on sales of model homes held by our affiliated limited partnerships.

Current wording

Income allocated to non-controlling interests. Income allocated to non-controlling interests for the nine months ended September 30, 2025 and 2024 totaled approximately $0.3 million and $2.3 million, respectively. This was directly related to the gain on sales of model homes held by our affiliated limited partnerships.

Previous wording

Loss on Conduit remeasurement. As of June 30, 2025, we had sold our remaining 29,431 shares of CDT for $13,990, and held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $7,728. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03*Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.*During the six months ended June 30, 2025, we recorded a loss on Conduit's marketable securities of $184,459, compared to a loss of approximately $13.9 million during the six months ended June 30, 2024.

Current wording

Loss on Conduit remeasurement. During the nine months ended September 30, 2025, we had sold our remaining 29,445 shares of CDT for $13,990, and held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $7,515. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03*Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.*During the nine months ended September 30, 2025, we recorded a loss on Conduit's marketable securities of $0.2 million, compared to a loss of approximately $17.8 million during the nine months ended September 30, 2024.

Previous wording

Our anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings from our model home lines of credit, and the sale of our equity or issuance of debt securities or bonds. Our cash and restricted cash at June 30, 2025 was approximately $7.3 million. Our future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. We also are actively seeking model home investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.

Current wording

Our anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings from our model home lines of credit, and the sale of our equity or issuance of debt securities or bonds. Our cash and restricted cash at September 30, 2025 was approximately $8.0 million. Our future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. We also are actively seeking model home investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.

Previous wording

Our short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of our existing mortgages, completing tenant improvements, paying leasing commissions, and funding dividends to stockholders. Future principal payments due on mortgage notes payable, during the last three quarters of 2025 and in the year ending December 31, 2026 total approximately$24.4 million and $19.7 million, respectively, of which$3.7 million in 2025 and $3.0 million in 2026 are related to model home properties. See Note 7. Mortgage Notes Payable, in Part I - Financial Information 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.

Current wording

Our short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of our existing mortgages, completing tenant improvements, paying leasing commissions, and funding dividends to stockholders. Future principal payments due on mortgage notes payable, during the last three months of 2025 and in the year ending December 31, 2026 total approximately$10.4 million and $21.1 million, respectively, of which$1.5 million in 2025 and $4.3 million in 2026 are related to model home properties. See Note 7. Mortgage Notes Payable, in Part I - Financial Information 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.

Previous wording

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 the six months ended June 30, 2025, we repurchased 4,091 shares of our Series A Common Stock, with an average price of $4.53 per share, including a commission of $0.025 per share, for a total cost of $18,552 for the Series A Common Stock. During the six months ended June 30, 2025, the Company repurchased 22,259 shares of our Series D Preferred Stock at an average price of approximately $14.73 per share, including a commission of $0.035 per share, for a total cost of $327,787 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.

Current wording

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 the nine months ended September 30, 2025, we repurchased 16,080 shares of our Series A Common Stock, with an average price of $4.79 per share, including a commission of $0.025 per share, for a total cost of $77,092 for the Series A Common Stock. This does not include the Tender Offer shares repurchased during April 2025. During the nine months ended September 30, 2025, the Company repurchased 22,259 shares of our Series D Preferred Stock at an average price of approximately $14.73 per share, including a commission of $0.035 per share, for a total cost of $327,787 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.

Previous wording

For the six months ended June 30, 2025 and 2024, the Company did not declare a cash dividend on shares of Series A Common Stock. For the six months ended June 30, 2025 and 2024, the Company declared and paid approximately $1.2 million and $1.1 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 be no guarantee the Board of Directors will approve any future dividends. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. The following is a summary of distributions declared per share of our Series A Common Stock and for our Series D Preferred Stock for the six months ended June 30, 2025 and 2024.

Current wording

For the nine months ended September 30, 2025 and 2024, the Company did not declare a cash dividend on shares of Series A Common Stock. For the nine months ended September 30, 2025 and 2024, the Company declared and paid approximately $1.7 million and $1.7 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 be no guarantee the Board of Directors will approve any future dividends. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. The following is a summary of distributions declared per share of our Series A Common Stock and for our Series D Preferred Stock for the nine months ended September 30, 2025 and 2024.

Previous wording

At June 30, 2025 and December 31, 2024, we had approximately $7.3 million and $8.0 millionin cash equivalents, respectively, including $3.6 million and $5.0 million of restricted cash, respectively. Our cash equivalents and restricted cash consist of invested cash, cash in our operating accounts, short-term bonds and cash held in bank accounts at third-party institutions. During 2025 and 2024, we did not experience any loss or lack of access to our cash or cash equivalents. Approximately $1.5 million to 2.0 million of our cash balance is intended for capital expenditures on existing properties, net of any construction financing (some of which is held in deposits reserve accounts by our lenders) during the rest of the year. We intend to use the remainder of our existing cash and cash equivalents for asset/property acquis itions, reduction of principal debt, general corporate purposes, common stock repurchases (if market conditionsare met), or dividends to our stockholders.

Current wording

At September 30, 2025 and December 31, 2024, we had approximately $8.0 million and $8.0 millionin cash equivalents, respectively, including $3.8 million and $5.0 million of restricted cash, respectively. Our cash equivalents and restricted cash consist of invested cash, cash in our operating accounts, short-term bonds and cash held in bank accounts at third-party institutions. During 2025 and 2024, we did not experience any loss or lack of access to our cash or cash equivalents. Approximately $1.5 million to $2.1 million of our cash balance is intended for capital expenditures on existing properties, net of any construction financing (some of which is held in deposits reserve accounts by our lenders) during the rest of the year. We intend to use the remainder of our existing cash and cash equivalents for asset/property acquis itions, reduction of principal debt, general corporate purposes, common stock repurchases (if market conditionsare met), or dividends to our stockholders.

Previous wording

The closing of the sales of the Securities pursuant to the Purchase Agreement occurred on July 15, 2025, subject to customary closing conditions. The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s estimated offering expenses are expected to be approximately $1.7 million. The Company intends to use the net proceeds from the offering for working capital and for other general corporate purposes including to potentially acquire additional properties.

Current wording

The closing of the sales of the Securities pursuant to the Purchase Agreement occurred on July 15, 2025. The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s offering expenses were approximately $1.7 million. The Company has used and intends to use the net proceeds from the offering for working capital and for other general corporate purposes including to potentially acquire additional properties.

Previous wording

In addition, in connection with the Purchase Agreement, the Company and the Purchaser entered into an Amendment to Series A Common Stock Purchase Warrants (the “Amendment”). The Amendment amends certain warrants to purchase 200,000 shares of Series A Common Stock purchased by the Purchaser on July 14, 2021 to (i) reduce the exercise price to $12.00 per share from $55 per share and (ii) extend the termination date to July 16, 2030 from July 16, 2026. Pursuant to the Stock Purchase Agreement, the Company agreed to file a resale registration statement to register the shares of Series A Common Stock underlying such warrants within 30 days of the closing of the offering and to cause the registration statement to go effective within 60 days of the closing.

Current wording

In addition, in connection with the Purchase Agreement, the Company and the Purchaser entered into an Amendment to Series A Common Stock Purchase Warrants (the “Amendment”). The Amendment amends certain warrants to purchase 200,000 shares of Series A Common Stock purchased by the Purchaser on July 14, 2021 to (i) reduce the exercise price to $12.00 per share from $55 per share and (ii) extend the termination date to July 16, 2030 from July 16, 2026. Pursuant to the Stock Purchase Agreement, the Company filed a resale registration statement to register the shares of Series A Common Stock underlying such warrants, which registration statement went effective on August 22, 2025.

Previous wording

As of June 30, 2025, all our commercial properties, except 300 N.P. which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $67.0 million, collateralized by a total of nine commercial properties with loan terms at issuance ranging from 5 to 10 years. The weighted-average interest rate on these mortgage notes payable as of June 30, 2025, was approximately 5.38%, and our debt to estimated market value for our commercial properties was approximately 67.2%. During the next 12 months, three of our commercial property loans, totaling approximately $28.1 million, will mature, with an estimated combined loan to value of approximately 68.9% as of June 30, 2025. The non-recourse loan on the Dakota Center property matured on July 6, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. As of June 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet. During July 2025, the lender approved a purchase offer from a third party for $5,125,000. In connection with the pending sale, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million as of June 30, 2025. The sale is expected to take place during the third quarter 2025. The loan is considered non-recourse and we will not be required to make up the difference if the property sells for less than the loan balance. See Note 4. Real Estate Assets above for further discussion on impairment of the property. As of June 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet.

Current wording

As of September 30, 2025, all our commercial properties, except 300 N.P. which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $67.5 million, collateralized by a total of nine commercial properties with loan terms at issuance ranging from 5 to 10 years. The weighted-average interest rate on these mortgage notes payable as of September 30, 2025, was approximately 5.78%, and our debt to estimated market value for our commercial properties was approximately 72.0%. During the next 12 months, one of our commercial property loans, totaling approximately $16.4 million, will mature. The non-recourse loan on the Dakota Center property matured on July 6, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. As of September 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet. During July 2025, the lender approved a purchase offer from a third party for $5,125,000. In connection with the pending sale, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million as of September 30, 2025. The sale is expected to take place during the fourth quarter 2025. The loan is considered non-recourse and we will not be required to make up the difference if the property sells for less than the loan balance. See Note 4. Real Estate Assets above for further discussion on impairment of the property. As of September 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet.

Previous wording

As of June 30, 2025, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $28.4 million, collateralized by a total of 87 Model Homes. These loans generally have a term at issuance of three to five years. As of June 30, 2025, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $326,961 and 7.13%, respectively. Our debt to estimated market value on all our model home properties is approximately 61.7%. We have been able to refinance maturing mortgages to extend maturity dates and we have not experienced any notable difficulties financing our acquisitions. The Company anticipates that any new mortgages used to acquire commercial properties or model homes in the near future will be at rates higher than our currently weighted average interest rate.

Current wording

As of September 30, 2025, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $27.2 million, collateralized by a total of 84 Model Homes. These loans generally have a term at issuance of three to five years. As of September 30, 2025, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $323,577 and 7.13%, respectively. Our debt to estimated market value on all our model home properties is approximately 59.0%. We have been able to refinance maturing mortgages to extend maturity dates and we have not experienced any notable difficulties financing our acquisitions. The Company anticipates that any new mortgages used to acquire commercial properties or model homes in the near future will be at rates higher than our currently weighted average interest rate.

Previous wording

*Operating Activities:*Net cash used in operating activities for thesix months ended June 30, 2025, totaled approximately$1.0 million, as compared to cash used in operating activities of$1.3 million for thesix months ended June 30, 2024. The change in net cash used in operating activities is mainly due to changes in net income, which fluctuates due to new leases, leasing renewals, tenant move outs and model home sales and acquisitions, as well as changes in non-cash addbacks or subtractions such as straight-line rent.

Current wording

*Operating Activities:*Net cash used in operating activities for thenine months ended September 30, 2025, totaled approximately$0.4 million, as compared to cash used in operating activities of$0.7 million for thenine months ended September 30, 2024. The change in net cash used in operating activities is mainly due to changes in net income, which fluctuates due to new leases, leasing renewals, tenant move outs and model home sales and acquisitions, as well as changes in non-cash addbacks or subtractions such as straight-line rent.

Previous wording

*Investing Activities:*Net cash provided by investing activities for thesix months ended June 30, 2025, was approximately$11.4 million compared to approximately$13.0 million used in investing activities during the same period in 2024. The change from each period was primarily related to the sale of our commercial properties in February 2025 for approximately $16.95 million. There were no similar commercial property sales during the six months ended June 30, 2024. Proceeds from the sale of real estate assets total approximately $21.5 million, net of selling costs, while cash used in real estate acquisition and capital improvement totaled approximately $10.2 million, for the six months ended June 30, 2025.

Current wording

*Investing Activities:*Net cash provided by investing activities for thenine months ended September 30, 2025, was approximately$11.4 million compared to approximately$10.7 million used in investing activities during the same period in 2024. The change from each period was primarily related to the sale of our commercial properties in February 2025 for approximately$15.9 million, net of selling costs, and the sale of model home properties for approximately $7.4 million during thenine months ended September 30, 2025. There were no similar commercial property sales during the nine months ended September 30, 2024, however, model home sales during the nine months ended September 30, 2024 totaled approximately $22.3 million. Cash used in real estate acquisition and capital improvement totaled approximately $11.6 million, for the nine months ended September 30, 2025.

Previous wording

We currently project that we could spend up to $1.6 million (some of which is held in deposits reserve accounts by our lenders) on capital improvements, tenant improvements and leasing costs for properties within our portfolio during the next 12 months. Capital expenditures may fluctuate in any given period subject to the nature, extent, and timing of improvements required to the properties. We may spend more on capital expenditures in the future due to rising construction costs. Tenant improvements and leasing costs may also fluctuate in any given year depending upon factors such as the property, the term of the lease, the type of lease, the involvement of external leasing agents and overall market conditions.

Current wording

We currently project that we could spend up to $2.7 million (some of which is held in deposits reserve accounts by our lenders) on capital improvements, tenant improvements and leasing costs for properties within our portfolio during the next 12 months. Capital expenditures may fluctuate in any given period subject to the nature, extent, and timing of improvements required to the properties. We may spend more on capital expenditures in the future due to rising construction costs. Tenant improvements and leasing costs may also fluctuate in any given year depending upon factors such as the property, the term of the lease, the type of lease, the involvement of external leasing agents and overall market conditions.

Previous wording

*Financing Activities:*Net cash used in financing activities during thesix months ended June 30, 2025, was$11.1 million compared to$9.6 million provided by financing activities for the same period in 2024 and was primarily due to the following activities for thesix months ended June 30, 2025:

Current wording

*Financing Activities:*Net cash used in financing activities during thenine months ended September 30, 2025, was$11.1 million compared to$9.3 million provided by financing activities for the same period in 2024 and was primarily due to the following activities for thenine months ended September 30, 2025: