Presidio Property Trust, Inc.

During January 2026, the Company received notice that the Company's failure to repay in full by January 5, 2026 the indebtedness related to the loan agreement governing Shea Center II had triggered a default event. On February 13, 2026, the Company received notification that the Shea Center II property governed by the non-recourse loan agreement was moved into receivership and the lender has started the foreclosure process. The foreclosure sale and public auction is scheduled for July 1, 2026. The lender held approximately $2.4 million in restricted cash, some of which was utilized by the receiver to operate the property. Additionally, during the three March 31, 2026, Shea Center II was listed as held for sale, related to the foreclosure sale and impaired approximately $2.6 million. On July 1, 2026, the foreclosure for Shea Center II took place with the property going to Argentic Services Company LP, who acquired the property by placing a minimum credit bid valued at $12.0 million, and no cash consideration was exchanged. Given the non-recourse nature of the loan and the outstanding principal balance of approximately $15.4 million dollars, roughly $3.4 million of the outstanding debt was forgiven as a result of the non-cash transaction.

As of January 28, 2026, the Board of Directors has suspended the Company’s monthly dividend on its Series D Preferred Stock commencing with the January 2026 monthly dividend that would have been paid on February 15, 2026. Since the Company’s Board of Directors did not declare a dividend during the six months ended June 30, 2026, an accrual was not recorded on the balance sheet. However, undeclared preferred stock dividends are reflected in earnings per share as discussed in ASC 260-10-45-11. In accordance with the terms of the Series D Preferred Stock, Preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. No interest, or sum of money in lieu of interest, is payable in respect of any dividend payments on the Series D Preferred Stock that are in arrears. As of June 30, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was approximately $1.1 million and $0, respectively.

The Board and the Company intend to reassess, on a quarterly basis, when accrued dividends on the Series D Preferred Stock may be paid and when the monthly dividend payments can be reinstated. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. As of the date of filing this quarterly report, $0.8 million in dividends are in arrears.

On August 7, 2026, the Company filed a Registration Statement on Form S-4 and a Tender Offer Statement on Schedule TO with the SEC with respect to a proposed offer (the "Exchange Offer") to exchange each validly tendered and accepted outstanding share of the Company's Series D Preferred Stock for five and one-half (5.5) newly issued shares of the Company's Common Stock (the "Exchange Ratio"), upon the terms and subject to the conditions described in the preliminary prospectus/offer to exchange included in such filings. As of the date of this Quarterly Report on Form 10-Q, the Registration Statement on Form S-4 has not been declared effective by the SEC, and the Exchange Offer has not yet commenced. The Exchange Offer will not commence until the Registration Statement is declared effective by the SEC, and there can be no assurance that the Registration Statement will be declared effective or that the Exchange Offer will be commenced or consummated on the terms described herein or at all. The commencement date and expiration date of the Exchange Offer have not yet been determined and will depend on, among other things, the timing of the SEC's review of the Registration Statement and Schedule TO. If the Exchange Offer is commenced and consummated, holders of Series D Preferred Stock who validly tender their shares on or prior to the expiration date and time of the Exchange Offer, and do not validly withdraw such shares, will receive the Exchange Ratio of shares of Common Stock for each share of Series D Preferred Stock accepted by the Company for exchange.