Power REIT

1 –GENERAL INFORMATION

Power REIT (the “Registrant” or the “Trust”, and together with its consolidated subsidiaries or “Power REIT”, unless the context requires otherwise) is a Maryland-domiciled, internally-managed real estate investment trust (a “REIT”) that owns a portfolio of real estate assets related to transportation, energy infrastructure and Controlled Environment Agriculture (“CEA”) in the United States.

The Trust is structured as a holding company and owns its assets through nineteen direct and indirect wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. As of December 31, 2025, the Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary Pittsburgh & West Virginia Railroad (“P&WV”), approximately 447 acres of fee simple land leased to a utility scale solar power generating project with an aggregate generating capacity of approximately 82 Megawatts (“MW”) and approximately 82 acres of land with approximately 357,000 square feet of existing or under construction CEA properties in the form of greenhouses.

During the twelve months ended December 31, 2025, the Trust did not declare quarterly dividends of approximately $653,000 ($0.484375 per share per quarter) to holders of Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock. As of December 31, 2025, the total cumulative undeclared dividends are approximately $2,122,000.

The Trust has elected to be treated for tax purposes as a REIT, which means that it is exempt from U.S. federal income tax if a sufficient portion of its annual income is distributed to its shareholders, and if certain other requirements are met. In order for the Trust to maintain its REIT qualification, at least 90% of its ordinary taxable annual income must be distributed to shareholders. As of December 31, 2024, the last tax return completed to date, the Trust has a net operating loss of approximately $41.0 million, which may reduce this requirement.

2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net loss.

Cash

The Trust considers all highly liquid investments with original maturity of three months or less to be cash equivalents. Power REIT places its cash and cash equivalents with high-credit quality financial institutions. At times, the Trust’s deposits may exceed Federal Deposit Insurance Corporation (FDIC) coverage limits which are currently set at $250,000 per depositor. The Trust has not experienced any losses from maintaining cash accounts in excess of federally insured limits. Amounts previously included in restricted cash represented funds held by the Trust related to debt service payment reserves required by the lender for a loan secured by most of the Trust’s greenhouse properties (the “Greenhouse Loan”) but since that obligation was satisfied in April 2025, the restricted cash as of December 31, 2025 is $0.

The following table provides a reconciliation of the Trust’s cash and cash equivalents and restricted cash that sums to the total of those amounts at the end of the periods presented on the Trust’s accompanying Consolidated Statements of Cash Flow:

Share Based Compensation Accounting Policy

The Trust records all equity-based incentive grants to Officers and non-employee members of the Trust’s Board of Directors in general and administrative expenses in the Trust’s Consolidated Statement of Operations based on their fair value determined on the date of grant. Stock-based compensation expense is recognized on a straight-line basis over the vesting term of the outstanding equity awards.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Impact of New Accounting Standards

The Trust has evaluated all recent accounting pronouncements and believes either they are not applicable or that none of them will have a significant effect on the Trust’s financial statements.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to improve disclosures about the nature of expenses in commonly presented financial statement captions. ASU 2024-03 is effective for all public business entities for annual reporting periods beginning after December 15, 2026, on either a prospective or retrospective basis. Early adoption is permitted. The Trust is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

Principles of Consolidation

The accompanying consolidated financial statements include Power REIT and its wholly-owned subsidiaries. All intercompany balances have been eliminated in consolidation.

Loss per Common Share

Basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per common share is computed similar to basic net loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The dilutive effect of the Trust’s options is computed using the treasury stock method. As of December 31, 2025 and December 31, 2024, the total number of common share equivalents was 187,500 and 192,778, respectively, composed of stock options.

The following table sets forth the computation of basic and diluted Income per Share:

Assets Held for Sale

Assets held for sale are measured at the lower of their carrying amount or estimated fair value less cost to sell. As of December 31, 2025 and 2024, the Trust has several properties that are considered assets held for sale. See Note 8 for discussion of impairments of our assets held for sale.

Real Estate Assets and Depreciation of Investment in Real Estate

The Trust expects that most of its transactions will be accounted for as asset acquisitions. In an asset acquisition, the Trust is required to capitalize closing costs and allocates the purchase price on a relative fair value basis. For the years ended December 31, 2025 and 2024, there were no acquisitions. In making estimates of relative fair values for purposes of allocating purchase price, the Trust utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, its own analysis of recently acquired and existing comparable properties in our portfolio and other market data. The Trust also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible acquired. The Trust allocates the purchase price of acquired real estate to various components as follows:

Impairment of Long-Lived Assets

Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a “triggering event.” A property to be held and used is considered impaired only if management’s estimate of the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges, are less than the carrying value of the property. This estimate takes into consideration factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.

If there is a triggering event in relation to a property to be held and used, the Trust will estimate the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges. In addition, this estimate may consider a probability weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.

The determination of undiscounted cash flows requires significant estimates by management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the anticipated action to be taken with respect to the property could impact the determination of whether an impairment exists and whether the effects could materially affect the Trust’s net income. To the extent estimated undiscounted cash flows are less than the carrying value of the property, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the property.

While the Trust believes its estimates of future cash flows are reasonable, different assumptions regarding a number of factors, including market rents, listing prices, economic conditions, and occupancies, could significantly affect these estimates. When impairment exists, the long-lived asset is adjusted to an estimate of fair value. In estimating fair value, if appraisal reports are available, the Trust uses the sales comparable approach methodology where applicable within appraisal reports; when appraisal reports are not available, the Trust uses opinions of value from brokers involved with listing properties for sale and other market value information available to it. The Trust will record an impairment charge if it believes that there is other than a temporary decline in market value below the carrying value of the investment. During the years ended December 31, 2025 and 2024, an impairment charge was expensed in the amount of approximately $562,000 and $19,954,000, respectively, of which approximately $13,209,000 was for the Michigan and Nebraska properties that are no longer owned by the Trust.

Any decline in the estimated fair values of the Trust’s assets could result in impairment charges in the future. It is possible that such impairments, if required, could be material.

Depreciation

Depreciation is computed using the straight-line method over the estimated useful lives of 20 years for greenhouses,10 years for the MIP equipment and 39 years for auxiliary buildings, except for PW Candescent, which was determined the buildings have a useful life of 37 years. For each of the twelve months ended December 31, 2025 and 2024, approximately $64,000 and $820,000 depreciation expense was recorded, respectively.

Revenue Recognition

The Railroad Lease is treated as a direct financing lease. As such, income to P&WV under the Railroad Lease is recognized when received.

Lease revenue from solar land and CEA properties are accounted for as operating leases. Any such leases with rent escalation provisions are recorded on a straight-line basis when the amount of escalation in lease payments is known at the time Power REIT enters into the lease agreement, or known at the time Power REIT assumes an existing lease agreement as part of an acquisition (e.g., an annual fixed percentage escalation) over the initial lease term, subject to a collectability assessment, with the difference between the contractual rent receipts and the straight-line amounts recorded as “deferred rent receivable” or “deferred rent liability”. Collectability is assessed at quarter-end for each tenant receivable using various criteria including past collection issues, the current economic and business environment affecting the tenant and guarantees. If collectability of the contractual rent stream is not deemed probable, revenue will only be recognized upon receipt of cash from the tenant. During the twelve months ended December 31, 2025 and 2024, the Trust did not write off any straight-line rent receivable against rental income.

The following table provides the breakdown of rental income recognition (not including the direct finance lease) During the twelve months ended December 31, 2025 and 2024, the Trust recognized $0 and $992,216, respectively of rental income for non-refundable security deposits related to defaulted leases as allowed per the terms of the lease and based on the determination that these defaults will be not be cured:

Deferred rent receivable as of December 31, 2025 and 2024 is approximately $328,000 and $338,000, respectively.

Intangibles

A portion of the acquisition price of the assets acquired by PW Regulus Solar, LLC (“PWRS”) have been allocated on The Trust’s consolidated balance sheets between Land and Intangibles’ fair values at the date of acquisition. The total amount of in-place lease intangible assets established was approximately $4,714,000, which is amortized over a 20.7-year period. For each of the twelve months ended December 31, 2025 and 2024, approximately $227,000 of the intangibles was amortized.

Intangible assets are evaluated whenever events or circumstances indicate the carrying value of these assets may not be recoverable. There wasno impairment charge recorded for the twelve months ended December 31, 2025 and 2024.

The following table provides a summary of the Intangible Assets:

The following table provides a summary of the current estimate of future amortization of Intangible Assets:

Net Investment in Direct Financing Lease – Railroad

P&WV’s net investment in its leased railroad property, recognizing the lessee’s perpetual renewal options, was estimated to have a current value of $9,150,000, assuming an implicit interest rate of 10%.

Fair Value

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Trust measures its financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

In determining fair value, the Trust utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk.

The carrying amounts of Power REIT’s financial instruments, including cash and cash equivalents, prepaid expenses, and accounts payable approximate fair value because of their relatively short-term maturities. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of December 31, 2025 and 2024, the Trust owns publicly traded REIT securities with a fair market value of $86,537 and $9,831, respectively, based on the closing prices of those dates.

Other Income

Other income included in total revenue for the twelve months ended December 31, 2025 and 2024 is approximately $169,000 and $215,000, respectively consisting of interest income.

Forgiveness of Accounts Payable

Forgiveness of accounts payable for the twelve months ended December 31, 2025 and 2024 is $0 and approximately $351,000, respectively. The amount in 2024 is related to discounts obtained as part of written settlement agreements associated with litigations that were filed against subsidiaries of the Trust.

On November 17, 2023, Anchor Hydro (“Anchor”) initiated a complaint, as amended, in the Michigan Circuit Court for the County of Calhoun (Case No. 2023-3145-CB) against Power REIT, PW MI CanRE Marengo LLC (collectively the “PW Defendants”) for Breach of Contract, Unjust Enrichment and Account Stated in the amount of approximately $600,000. The litigation relates to purported work by Anchor at the greenhouse property owned by PW MI CanRE Marengo LLC in Michigan. On July 9, 2024, Anchor and the PW Defendants entered into a settlement agreement (the “Anchor Settlement”) whereby Anchor agreed to complete certain work at the greenhouse property in Michigan and the PW Defendants agreed to pay Anchor $265,000 ($150,000 up front and $11,500 per month for ten months commencing on September 1, 2024) as well as the return of certain uninstalled equipment provided by Anchor. In connection with the Anchor Settlement, the Trust recognized $351,000 as income related to forgiveness of accounts payable during the year ended December 31, 2024.

Other Assets

Other assets as of December 31, 2025 and 2024 are approximately $310,000 and $21,000, respectively. Other assets as of December 31, 2025 primarily consist of approximately $86,000 of fair market value of securities of a publicly traded REIT and approximately $212,000 of prepaid expenses related to the filing of an S-3 Registration Statement with the SEC.

Mortgage Loan Receivables

On October 30, 2023, PW ME CanRE SD LLC (“PW SD”) provided seller financing in connection with the sale of the two Maine properties in the form of an $850,000 note with an 8.5% interest rate that will accrue until maturity on October 30, 2025. The note is secured by a second mortgage on the property and certain corporate and personal guarantees. On December 10, 2024, the property owner sold one of the two properties, and PW SD received a payment in the amount of $253,000 which paid down the note to a balance of $597,000. The net note payment was paid to the lender of the Greenhouse Loan. As of the date of the filing, the note is in default and PW SD is pursuing collection efforts.

On January 6, 2024, PW CO CanRE Sherman 6 LLC (“PW Sherman”) provided seller financing in conjunction with selling the Sherman 6 and Tamarack 14 properties in the amount of $1,250,000 with an initial 10% interest rate that increases over time to 15% until maturity. The seller financing had a three-year maturity with a fixed amortization schedule of $40,000 for the first month and second months, $45,000 for the third month and $15,000 per month thereafter until maturity. The note is secured by a first mortgage on the properties and certain corporate and personal guarantees. As of December 31, 2025 and 2024, the balance of the loan was approximately $884,000 and $1,005,000 respectively. On June 9, 2025, PW Sherman agreed to modify the terms of the note whereby payments are based on a five-year amortization schedule at an 11% per annum interest rate and with a balloon payment for the balance due on May 1, 2030.

On June 9, 2025, PW Sherman provided seller financing in conjunction with selling the Tamarack 13 property in the amount of $105,000 with an 11% per annum interest rate until maturity. The seller financing has a five-year maturity and fully amortizes over the life of the note with fixed monthly payments of $2,283 per month. The note is secured by a first mortgage on the property and a personal guarantee of the owner of the entity which purchased the property. As of December 31, 2025 and 2024, the balance of the loan is $96,893 and $0, respectively.

After reviewing the collectivity for mortgage loan receivable, the Trust recorded an allowance for receivable of $0.6 million for the year ended December 31, 2025.

General and Administrative Expenses

General and Administrative Expense for the twelve months ended December 31, 2025 and 2024 is approximately $1,174,000 and $1,494,000, respectively, which includes a non-cash stock compensation expense of approximately $334,000 for 2025 and approximately $694,000 for 2024.

Interest Expense

Interest expense for the twelve months ended December 31, 2025 related to the PW PWV Loan (defined below), the 2015 PWRS Loan (defined below) and the Greenhouse Loan was approximately $679,000, $307,000 and $1,071,000, respectively, compared to approximately $690,000, $329,000 and $2,830,000 (approximately $1,980,000 of interest and approximately $850,000 of expenses associated with the default) respectively, for the twelve months ended December 31, 2024.

Preferred Stock

As of December 31, 2025, we have issued approximately $8.5 million of our Series A Preferred Stock. The shares of Series A Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless we redeem or otherwise repurchase them or they are converted.

3 –GOING CONCERN

The Trust’s objectives when managing its capital are to seek to ensure that there are adequate capital resources to safeguard the Trust’s ability to continue operating and maintain adequate levels of funding to support its ongoing operations and development such that it can continue to provide returns to shareholders. The Trust’s management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued.

As of December 31, 2025, the Trust had incurred recurring losses, recurring negative cash flows from operations and reduced revenue. Those conditions in aggregate raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

On a consolidated basis, the Trust’s cash, cash equivalents and restricted cash totaled $2,235,306 as of December 31, 2025, an increase of $3,720 from December 31, 2024.

The Trust intends to continue to focus on maximizing the value of the greenhouse properties. This will include entering into new leases and selling properties based on market conditions. The Trust will also continue to focus on improving cash collections from existing tenants. In addition, the Trust is exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value. The Trust may also raise capital in the form of debt or equity to provide liquidity. However, the Trust cannot predict, with certainty, the outcome of these actions to generate liquidity.

4 –CONCENTRATIONS

Historically, the Trust’s revenue has been concentrated to a relatively limited number of investments, industries and lessees. As the Trust grows, its portfolio may remain concentrated in a limited number of investments. For the fiscal year ended 2025, Power REIT recognized approximately 93% of its rental income and lease income from direct financing lease from two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 50% and 43% of rental income and lease income from direct financing lease, respectively. For the fiscal year ended 2024, Power REIT collected approximately 88% of its rental income and lease income from direct financing lease from three properties. The tenants were Norfolk Southern Railway, Regulus Solar LLC and Marengo Cannabis LLC which represented 32%,28% and 28% of rental income and lease income from direct financing lease, respectively. The concentration percentages include the income from the recognition of security deposits related to defaulted leases.

5 –DISPOSITIONS

2025 Dispositions

On June 9, 2025, a wholly owned subsidiary of Power REIT, PW CO CanRE MF LLC, sold a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Tam 13 and was vacant. The purchaser was an unaffiliated third party who had previously acquired two adjacent properties from subsidiaries of the Trust and the price was established based on an arm’s length negotiation. The sale price was $125,000 and the subsidiary of the Trust provided $105,000 of seller financing which amortizes over a 60-month period at an interest rate of 11% per annum. There was an approximately $8,000 loss on sale based on previous impairments taken.

As previously disclosed, a subsidiary of the Trust had a loan secured by most of the greenhouse properties which was non-recourse to the Trust and in default and the lender had initiated litigation including foreclosure actions. On April 11, 2025, Power REIT resolved issues with its lender concerning the Greenhouse Loan by providing deeds-in-lieu of foreclosure for greenhouse properties in Michigan and Nebraska. The transaction related to the Greenhouse Loan resulted in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan.

On January 31, 2025, a wholly owned subsidiary of Power REIT, PW CO CanRE JAB LLC, sold one of its interests in a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Tam 18 and was vacant. The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $200,000 and the net proceeds were used to pay down the Greenhouse Loan and pay other accrued expenses related to the property. There wasno gain/loss on sale recognized based on previous impairments.

2024 Dispositions

On December 26, 2024, a wholly owned subsidiary of Power REIT, PW CO CanRE JKL LLC, sold its interest in a property cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Sherman 21 and 22 and was vacant and construction was incomplete. The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $80,000 and the net proceeds were used to pay down the loan secured by the greenhouse portfolio and other accrued expenses related to the property. The loss on sale recognized was approximately $147,000.

On January 8, 2024, two wholly owned subsidiaries of Power REIT, PW CO CanRE Sherman 6 LLC and PW CO CanRE MF LLC, sold two cannabis related greenhouse cultivation properties located in Ordway, Colorado to an affiliate of a tenant of one of the properties. The properties are described in prior filings as Sherman 6 (the tenant of which is affiliated with the tenant/purchaser) and Tamarack 14 which was vacant. The purchaser is an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $1,325,000. As part of the transaction, a subsidiary of the Trust provided seller financing in the amount of $1,250,000 with an initial 10% interest rate that increases over time to 15% until maturity. The seller financing has a three-year maturity with a fixed amortization schedule of $40,000 for the first and second months, $45,000 for the third month and $15,000 per month thereafter until maturity. The note is secured by a first mortgage on the properties and certain corporate and personal guarantees. The gain on sale recognized was approximately $213,000.

On January 30, 2024, a wholly owned subsidiary of Power REIT, PW Salisbury Solar LLC, sold its interest in a ground lease related to a utility scale solar farm located in Salisbury, Massachusetts. for gross proceeds of $1.2 million. The purchaser is an unaffiliated third party and the price was established based on an arm’s length negotiation. As part of the transaction, the Municipal Debt and the PWSS Term Loan were paid off. The gain on sale recognized was approximately $181,000 and the net book value of land upon sale was approximately $1,006,000.

6 –DIRECT FINANCING LEASES AND OPERATING LEASES

Information as Lessor Under ASC Topic 842

To generate positive cash flow, as a lessor, the Trust leases its facilities to tenants in exchange for payments. The Trust’s leases for its railroad, solar farms and greenhouse cultivation facilities have lease terms ranging between 5 and 99 years. Payments from the Trust’s leases are either recognized on a straight-line basis over the terms of the respective leases or on a cash basis for tenants with collectability issues. Total revenue from its leases recognized for the year ended December 31, 2025 and 2024 is approximately $1,842,000 and $2,835,000, respectively.

Direct Financing Leases

The Railroad Lease provides for a base cash rental of $915,000 per annum, payable quarterly, for the current 99-year lease period. The leased properties are maintained entirely at the lessee’s expense. Under the terms of the Railroad Lease, which became effective October 16, 1964, Norfolk Southern Corporation (“NSC” - formerly Norfolk and Western Railway Company) leased all of P&WV’s real properties, including its railroad lines, for a term of 99 years, renewable by the lessee upon the same terms for additional 99-year terms in perpetuity.

The Railroad Lease may be terminated by the lessee at the expiration of the initial term or any renewal term, or by default of NSC. In the event of termination, NSC is obligated to return to P&WV all properties covered by the Railroad Lease, together with sufficient cash and other assets to permit operation of the railroad for a period of one year. In addition, NSC would be obligated upon default or termination, to the extent NSC has not previously paid indebtedness due to P&WV, to settle remaining indebtedness owed to P&WV. The existing indebtedness owed to P&WV, including the ability of P&WV to make an immediate demand for payment of such amounts, was part of the subject of a multi-year litigation which concluded in 2017. Based on the outcome of the litigation, the indebtedness that has accrued on Power REIT’s tax books is deemed uncollectable and was written off for tax purposes in 2017. The amount of this indebtedness has not been reflected on P&WV’s financial statements which are consolidated into Power REIT’s financial statements and therefore for financial reporting purposes there was no change related thereto.

P&WV has determined that the lease term is perpetual (for GAAP accounting purposes only) because it is perceived that it would be un-economic for the lessee to terminate and the Lessee has control over its actions with respect to default and has unlimited renewal options. Accordingly, as of January 1, 1983, the rentals receivable of $915,000 per annum, recognizing renewal options by the lessee in perpetuity, were estimated to have a present value of $9,150,000, assuming an implicit interest rate of 10%. The Trust has evaluated their long-lived assets for impairment and concluded there are no impairment indicators as of December 31, 2025.

Operating Leases

Lease revenue from solar land and CEA properties are accounted for as operating leases. Any such leases with rent escalation provisions are recorded on a straight-line basis when the amount of escalation in lease payments is known at the time Power REIT enters into the lease agreement, or known at the time Power REIT assumes an existing lease agreement as part of an acquisition (e.g., an annual fixed percentage escalation) over the initial lease term, subject to a collectability assessment, with the difference between the contractual rent receipts and the straight-line amounts recorded as “deferred rent receivable” or “deferred rent liability”. Collectability of contractual rent is assessed at quarter-end for each tenant receivable using various criteria including past collection issues, the current economic and business environment affecting the tenant and guarantees. If collectability of the contractual rent stream is not deemed probable, revenue will only be recognized upon receipt of cash from the tenant. During the twelve months ended December 31, 2025 and 2024, the Trust did not write off any straight-line rent receivable against rental income.

Due to significant price compression in the wholesale cannabis market, all of our cannabis related tenants have experienced severe financial distress and have defaulted on leases and vacated properties. Unfortunately, starting in 2022, collections from the greenhouse portfolio has diminished to a nominal amount. The Trust is exploring strategic alternatives in respect to the greenhouse portfolio and has listed some of the assets in the portfolio as held for sale.

Below is a chart of operating leases for Power REIT as of December 31, 2025:

The following is a schedule by years of minimum future rental payments on non-cancelable operating leases as of December 31, 2025 for assets and assets held for sale where revenue recognition is considered on a straight-line basis:

7 –LONG-TERM DEBT

On December 31, 2012, as part of the Salisbury land acquisition, PW Salisbury Solar, LLC (“PWSS”) assumed existing municipal financing (“Municipal Debt”). The Municipal Debt has approximately 9 years remaining. The Municipal Debt had a simple interest rate of 5.0% that was paid annually, due on February 1 of each year. The balance of the Municipal Debt as of December 31, 2025 and 2024 was $0. On January 30, 2024, the PWSS property was sold and the loan was paid off.

In July 2013, PWSS borrowed $750,000 from a regional bank (the “PWSS Term Loan”). The PWSS Term Loan carries a fixed interest rate of 5.0% for a term of 10 years and amortizes based on a 20-year principal amortization schedule. The PWSS Term Loan matured on August 1, 2023 and the bank agreed to provide a 6-month extension of the maturity. The loan was secured by PWSS’ real estate assets and a parent guarantee from the Trust. The balance of the PWSS Term Loan as of December 31, 2025 and 2024 was $0. On January 30, 2024, the PWSS property was sold and the loan was paid off.

On November 6, 2015, PWRS entered into a loan agreement (the “2015 PWRS Loan Agreement”) with a lender for $10,150,000 (the “2015 PWRS Loan”). The 2015 PWRS Loan is secured by land and intangibles owned by PWRS. PWRS issued a note to the benefit of the lender dated November 6, 2015 with a maturity date of October 14, 2034 and a 4.34% interest rate. The 2015 PWRS Loan is non-recourse to Power REIT. The balance of the PWRS Bonds as of December 31, 2025 and 2024 was approximately $5,998,000 (net of approximately $190,000 of capitalized debt costs) and approximately $6,492,000 (net of approximately $213,000 of capitalized debt costs), respectively.

On November 25, 2019, Power REIT, through a newly formed subsidiary, PW PWV Holdings LLC (“PW PWV”), entered into a loan agreement (the “PW PWV Loan Agreement”) with a certain lender for $15,500,000 (the “PW PWV Loan”). The PW PWV Loan is secured by pledge of PW PWV’s equity interest in P&WV, its interest in the Railroad Lease and a security interest in a deposit account (the “Deposit Account”) pursuant to a Deposit Account Control Agreement dated November 25, 2019 into which the P&WV rental proceeds are deposited. Pursuant to the Deposit Account Control Agreement, P&WV has instructed its bank to transfer all monies deposited in the Deposit Account to the escrow agent as a dividend/distribution payment pursuant to the terms of the PW PWV Loan Agreement. The PW PWV Loan is evidenced by a note issued by PW PWV to the benefit of the lender for $15,500,000, with a fixed interest rate of 4.62% and fully amortizes over the life of the financing which matures in 2054 (35 years). The PW PWV Loan is non-recourse to Power REIT. The balance of the loan as of December 31, 2025 and 2024 was approximately $13,974,000 (net of approximately $258,000 of capitalized debt costs) and approximately $14,198,000 (net of approximately $267,000 of capitalized debt costs), respectively.

As previously disclosed, a subsidiary of the Trust had a loan secured by most of the greenhouse properties which was non-recourse to the Trust and in default and the lender had initiated litigation including foreclosure actions. On April 11, 2025, Power REIT resolved issues with its lender concerning the Greenhouse Loan by providing deeds-in-lieu of foreclosure for greenhouse properties in Michigan and Nebraska. In return, the lender released the remaining collateral back to subsidiaries of Power REIT and released obligations related to the Greenhouse Loan. Power REIT will seek to realize value from the retained assets by leasing and/or selling. The transaction related to the Greenhouse Loan resulted in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan. It will also relieve the ongoing costs associated with maintaining the Nebraska and Michigan properties. The balance of the Greenhouse Loan as of December 31, 2025 and 2024 was approximately $0 and $16,720,000 (approximately $13.3 million of principal, $2.1 million of interest and default interest and $1.3 million of loan expenses). During the twelve months ended December 31, 2025 and 2024, the Trust recognized approximately $554,000 and $850,000, respectively, of late charges, forbearance fees, legal fees, foreclosure fees and appraisal fees which is included in interest expense in Consolidated Statements of Operations. Prior to the settlement, during 2025, the Trust borrowed approximately $460,000 and made repayments of approximately $215,000 under the Greenhouse Loan. As a result of settling the Greenhouse Loan obligations through a deed-in-lieu of foreclosure for the Nebraska and Michigan properties, the Trust recognized a non-cash gain of approximately $1,093,000. This gain arose from the write-off of both the properties with a combined book value of approximately $17,083,000 and the associated loan obligations which totaled approximately $17,997,000, including accrued interest, default interest, and loan modification expenses (late charges, forbearance fees, legal fees, foreclosure fees and appraisal fees) and the write-off of accrued property tax of approximately $179,000.

The amount of principal payments remaining on Power REIT’s long-term debt as of December 31, 2025 is as follows:

8 –IMPAIRMENTS AND ASSETS HELD FOR SALE

For the years ended December 31, 2025 and 2024, the Trust concluded that an impairment of value of certain assets within its greenhouse portfolio was appropriate based on market conditions. The impairment takes into account assets held for sale. During 2025 and 2024, the Trust recorded approximately $562,000 and $20 million in non-cash impairment charges.

A summary of the Trust’s impairment expense for the years ended December 31, 2025 and 2024 is below:

Any decline in the estimated fair values of our assets could result in impairment charges in the future. It is possible that such impairments, if required, could be material.

As of December 31, 2025, the Trust considered Maverick 1 (Ordway, CO), Maverick 14 (Ordway, CO), Tamarack 19 (Ordway, CO), Tamarack 3 (Ordway, CO), Tamarack 27 and 28 (Ordway, CO), Tamarack 4 and 5 (Ordway, CO), Walsenburg (CO), Desert Hot Spring (CA), and Vinita (OK), as Assets Held for Sale.

The Trust has aggregated and classified the assets and liabilities of properties to be sold as held for sale in its Consolidated Balance Sheets as of December 31, 2025 since all criteria under ASC 360-10-45-9 were met. The Balance Sheet as of December 31, 2024 has been reclassed for comparative purposes as three properties (Tamarack 7, Tam 7 -MIP, Maverick 5 – Jackson Farms, and Tamarack 8 -Apotheke) considered held for sale are now considered held for use as of December 31, 2025. Also, the balance sheet as of December 31, 2024 includes the Tamarack 18, and Tamarack 13 properties which were sold during the year ended 2025 as well as, the Michigan and Nebraska properties which were written off on April 11, 2025 as part of the resolution of the Greenhouse Loan, and therefore all removed from the December 31, 2025 column. The assets and liabilities of assets held for sale were as follows:

Other Liabilities

Other liabilities as of December 31, 2025 and December 31, 2024 is approximately $0 and $356,000, respectively. Other liabilities for 2024 represented a finance loan agreement for a tractor used at the Nebraska greenhouse. The loan was payable annually over five years with a 1.9% interest rate and matured on August 21, 2028 but is no longer outstanding after the asset was returned to the lender. Other liabilities for 2024 also include a finance agreement for a property insurance policy for properties that are considered held for sale.

Other Assets

Other assets as of December 31, 2025 and December 31, 2024 is approximately $0 and $56,000, respectively. Other assets for 2024 represent a tractor purchased by PW MillPro NE on August 21, 2023 for use at the Nebraska greenhouse (net of depreciation) that has been returned to the lender.

9 –EQUITY AND LONG-TERM COMPENSATION

ATM Program

On January 24, 2025, the Trust entered into a sales agreement (the “Sales Agreement”), with AGP pursuant to which the Trust may, from time to time, issue and sell our common shares in an “at the market offering,” however, AGP is not obligated to sell any common shares and there are limits on the dollar amount of common shares the Trust can sell pursuant to the Sales Agreement. In addition, the Trust’s ability to raise capital through the sale of securities may be limited by the rules of the SEC and NYSE American LLC (“NYSE American”) that place limits on the number and dollar amount of securities that may be sold. There can be no assurances that the Trust will be able to raise the funds needed, especially in light of the fact that our ability to sell securities registered on our registration statement on Form S-3 will be limited until such time as the market value of our voting securities held by non-affiliates is $75 million or more. During the quarter ended December 31, 2025, the Trust sold 271,832 common shares pursuant to the Sales Agreement for gross proceeds of $287,604 and net proceeds of $277,829.

Summary of Stock Based Compensation Activity

Power REIT’s 2020 Equity Incentive Plan, which superseded the 2012 Equity Incentive Plan (the “Plan”), was adopted by the Board on May 27, 2020 and approved by shareholders on June 24, 2020. It provides for the grant of the following awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards. The Plan’s purpose is to secure and retain the services of Employees, Directors and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Trust and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the common shares through the granting of awards. As of December 31, 2025, the aggregate number of common shares that may be issued pursuant to outstanding awards is 2,348,710 shares, which is subject to adjustment per the Plan.

Summary of Stock Based Compensation Activity – Options

On July 15, 2022, the Trust granted non-qualified stock options (“options”) to acquire an aggregate 205,000 common shares at a price of $13.44 to its independent trustees and officers. The term of each option is 10 years. The options vested over three years as follows: in a series of thirty-six (36) equal monthly installments measured from the Vesting Commencement Date on the same date of the month as the Vesting Commencement Date which is August 1, 2022. The options are fully vested.

The Trust accounts for share-based payments using the fair value method. The Trust recognizes all share-based payments in our financial statements based on their grant date fair values and market closing price, calculated using the Black-Scholes option valuation model.

The following assumptions were made to estimate fair value:

The Trust uses historical data to estimate dividend yield and volatility and the “simplified method” as described in the SEC Staff Accounting Bulletin #110 to determine the expected term of the option grants. The risk-free interest rate for the expected term of the options is based on the U.S. treasury yield curve on the grant date. The Trust does not have historical data of forfeiture, and as a policy, has used a 0 percent forfeiture rate in calculating unrecognized share-based compensation expense and will instead, account for forfeitures as they occur. On January 31, 2023,6,250 options were forfeited and on April 30, 2023,1,250 options were forfeited by an employee who is no longer employed by the Trust. On February 29, 2024,4,722 options and on August 29, 2025,5,278 options were forfeited due to the death of a Trustee.

The summary of stock-based compensation activity for the year ended December 31, 2025, with respect to the Trust’s stock options, is as follows:

The weighted average remaining term of the options is 6.53 years.

The summary of Plan activity for the year ended December 31, 2024, with respect to the Trust’s stock options, was as follows:

Summary of Activity – Options

Summary of Stock Based Compensation Activity – Restricted Stock

During 2025 and 2024, the Trust did not grant any shares of restricted stock to its officer or independent trustees.

The summary of stock-based compensation activity for the year ended December 31, 2025, with respect to the Trust’s restricted stock, was as follows:

Summary of Activity - Restricted Stock

The summary of stock-based compensation activity for the year ended December 31, 2024, with respect to the Trust’s restricted stock, was as follows:

Summary of Activity - Restricted Stock

Stock-based Compensation

During 2025, the Trust recorded approximately $52,000 of non-cash expense related to restricted stock and approximately $282,000 of non-cash expense related to options granted compared to approximately $196,000 of non-cash expense related to restricted stock and $498,000 non-cash expense related to options granted in 2024. As of December 31, 2025, there is no unrecognized share-based compensation expense for restricted stock and options. The Trust does not currently have a policy regarding the repurchase of shares on the open market related to equity awards.

10 -INCOME TAXES

The Trust is organized as a Maryland-domiciled real estate investment trust and has elected to be treated under the Internal Revenue Code as a real estate investment trust. As such, the Trust does not pay Federal taxes on taxable income and capital gains to the extent that they are distributed to shareholders. In order to maintain qualified status, at least 90% of annual ordinary taxable income must be distributed; it is the intention of the trustees to continue to make sufficient distributions to maintain qualified status. As of December 31, 2024, the last tax return completed to date, the Trust has a net operating loss of approximately $41.0 million, which is available to meet this requirement.

Under the Railroad Lease, NSC reimburses P&WV, in the form of additional cash rent, for all taxes and governmental charges imposed upon the assets leased by NSC from P&WV, except for taxes relating to cash rent payments made by the lessee. Due to the treatment of the Railroad Lease as a direct financing lease for financial reporting purposes, the tax basis of the leased property is higher than the basis of the leased property as reported in these consolidated financial statements.

The Trust has implemented the accounting guidance for uncertainty in income taxes using the provisions of FASB ASC 740,Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more-likely-than-not the position will be sustained upon examination by the tax authorities.

The Trust is generally no longer subject to examination by income taxing authorities for years ended prior to December 31, 2021.

11 –SEGMENT INFORMATION

The Trust operates asone single reportable segment as the operations are managed and reviewed on a consolidated basis. The Trust’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who is responsible for making strategic decisions regarding the Trust’s real estate portfolio. The CODM evaluates the performance of the portfolio as a whole based on net operating income, total assets and the performance of specific property categories. Performance is assessed by analyzing consolidated financial results and the CODM makes resource allocation decisions related to acquisition, dispositions, capital expenditures and leasing activities. No separate evaluation of individual property types is made at the operating segment level, rather performance is reviewed based on the overall portfolio’s performance.

12 -RELATED PARTY TRANSACTIONS

Power REIT, through subsidiaries, had a relationship with subsidiaries of Millennium Sustainable Ventures Corp., formerly Millennium Investment and Acquisition Company Inc. (“MILC”). David H. Lesser, Power REIT’s Chairman and CEO, is also Chairman and CEO of MILC. MILC, through subsidiaries or affiliates, established cannabis and food crop cultivation projects and entered into leases related to the Trust’s Oklahoma, Michigan and Nebraska properties and MILC is a lender to the tenant of one of the Trust’s Colorado properties. As of December 31, 2025, these leases were in default and terminated. Total rental income recognized for the twelve months ended December 31, 2025 and 2024 was $0 and $785,000 from the tenant affiliated with MILC in Michigan based on the recognition of a security deposit as income during the third quarter of 2024, respectively.

Under the Trust’s Declaration of Trust, the Trust may enter into transactions in which trustees, officers or employees have a financial interest, provided however, that in the case of a material financial interest, the transaction is disclosed to the Board of Trustees or the transaction shall be fair and reasonable. After consideration of the terms and conditions of the transaction with subsidiaries and affiliates of MILC, the independent trustees approved such arrangements having determined such arrangement are fair and reasonable and in the interest of the Trust.

13 -CONTINGENCY

The Trust’s wholly-owned subsidiary, P&WV, is subject to various restrictions imposed by the Railroad Lease with NSC, including restrictions on share and debt issuance, including guarantees.

14 -SUBSEQUENT EVENTS

During the first quarter 2026, the Trust issued and sold our common shares in an “at the market offering,” pursuant to the Sales Agreement with AGP. In total, the Trust sold 10,781 common shares for gross proceeds of $10,985.

On February 11, 2026, a property located in Ordway, CO that was previously referred to as Maverick 14, was sold at auction. As part of the sale, we wrote off accrued property tax of approximately $61,000 and recognized a total loss of approximately $494,000.