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, Controlled Environment Agriculture (“CEA”) and single family rental properties in the United States.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Trust, these unaudited consolidated financial statements include all adjustments necessary to present fairly the information set forth herein. All such adjustments are of a normal recurring nature. Results for interim periods are not necessarily indicative of results to be expected for a full year.

These unaudited consolidated financial statements should be read in conjunction with the Trust’s audited consolidated financial statements and notes included in its latest Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 31, 2026.

The Trust is structured as a holding company and owns its assets through fifteen 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 September 30, 2026 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”), approximately 61 acres of land with approximately 253,000 square feet of CEA properties in the form of greenhouses (the “Greenhouse Portfolio”) and two single family rental properties.

During the nine months ended September 30, 2026, the Trust did not declare a dividend of approximately $490,000 ($0.484375 per share per quarter that had accrued) to holders of Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”). On September 3, 2026 the Trust filed a Preliminary Proxy Statement for the following proposals to be voted upon at a Special Meeting of Series A Preferred Stockholders: (i) an amendment to the Articles Supplementary to the Trust’s Declaration of Trust relating to the Series A Preferred Stock, (the “Preferred Stock Amendment”), to provide that each share of Series A Preferred Stock can be converted into 0.5 of our common shares, $0.001 par value per share (the “Common Shares”), upon the effective time of the Preferred Stock Amendment (such automatic conversion, the “Conversion”) (the “Preferred Stock Proposal”); (ii) if the Preferred Stock Amendment proposal is not approved, or the Trust does not affect the Conversion, the election of Alexander Kachmar and David Cacciapaglia as additional trustees of the Board of Trustees (the “Board Nominee Proposal”); and (iii) one or more adjournments of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Preferred Stock Proposal or the Board Nominee Proposal. If the Preferred Stock Proposal is not approved, the Board currently intends to pursue the delisting of the Series A Preferred Stock from the NYSE American, as described further below and in the accompanying proxy statement. The Special Meeting has not yet been held.

On October 27, 2026, the Trust convened its 2026 Annual Meeting of Shareholders (the “Annual Meeting”). The Trust had not received sufficient votes to approve Proposal 3, which is a proposal to amend the Articles Supplementary to the Trust’s Declaration of Trust relating to the Series A Preferred Stock, so that future amendments to the Declaration of Trust that affect only the contract rights of the Series A Preferred Stock could be approved by the holders of the Series A Preferred Stock, voting as a separate class, without a further vote of the common shareholders. The Trust has adjourned the Annual Meeting to continue to solicit votes in favor Proposal 3.

The Trust believes that the Conversion is in the best interest of the Trust because it would eliminate the Series A Preferred Stock from the Trust’s capital structure and may assist the Trust in maintaining its NYSE American listing. The conversion ratio of .5 Common Shares for each share of Series A Preferred Stock is a ratio that already exists in the governing documents but only in the event of a de-listing and de-registration as a publicly reporting entity. The Trust believes that if this proposal is approved and it can complete the conversion, it is more likely to continue as a listed and publicly reporting entity. The alternative may be a delisting of the Common and Preferred Shares and a de-registration as a publicly reporting entity. There can be no assurance that the proposal will be approved or that the conversion will be approved or completed.

The Trust has been informed that a complaint has been filed seeking to compel the Trust to hold a special meeting of the holders of its Series A Preferred Stock for the purpose of electing two additional trustees. The Trust has filed a preliminary proxy statement with the Securities and Exchange Commission for a meeting of the holders of its Series A Preferred Stock and intends to proceed with the process of convening such a meeting.

On September 18, 2026, a wholly owned subsidiary of Power REIT, PW CO CanRE Tam 7 LLC, sold a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Tam 7 and the sale included all property improvements and equipment. The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $400,000 and the subsidiary of the Trust provided $350,000 of seller financing at an interest rate of 8% per annum during year one, 12% per annum during year two, and 14% per annum for the third year following the closing with the entire principal balance due at maturity. There was an approximately $85,000 loss on sale which includes closing costs.

On August 14, 2026 and on September 9, 2026, a newly formed wholly owned subsidiary of Power REIT, PowerHouse OK 1 LLC purchased two single-family rental properties in Tulsa, Oklahoma for $75,000 and $65,000, respectively.

On July 31, 2026, a wholly owned subsidiary of Power REIT, PW CO CanRE Tam 19 LLC, sold its interest in a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Tam 19 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 $212,500 and the loss recognized on the sale was approximately $660 which includes closing costs.

On June 2, 2026, the Trust initiated a one-for-ten reverse stock split of shares of the Trust’s common stock, $0.001 par value per share (the “Common Stock”), where every ten issued and outstanding shares of Common Stock were converted into one share of Common Stock (the “Reverse Stock Split”). At the market open on June 3, 2026 (the first business day after the effective time of the Reverse Stock Split), the Common Stock began trading on a split-adjusted basis with a new CUSIP number (73933H 309). No fractional shares were issued in connection with the Reverse Stock Split. Instead, each stockholder that held fractional shares as a result of the Reverse Stock Split were entitled to receive, in lieu of such fractional shares, cash in an amount equal to the applicable fraction multiplied by the $8.30, the closing price of the Common Stock on NYSE American on June 2, 2026 (as adjusted for the Reverse Stock Split), without any interest. The Reverse Stock Split was applied to all outstanding shares of Common Stock and did not affect any particular stockholder’s relative ownership percentage of shares of Common Stock, except for de minimis changes resulting from the payment of cash in lieu of fractional shares. The Reverse Stock Split also did not affect the relative voting or other rights that accompany the shares of Common Stock, except to the extent that it resulted from a stockholder receiving cash in lieu of fractional shares.

On June 24, 2026, a wholly owned subsidiary of Power REIT, PW OK CanRE Vinita LLC, sold its interest in a cannabis related greenhouse cultivation property located in Vinita, Oklahoma. The property was described in prior filings as Vinita 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 $315,000 and the loss recognized was approximately $110,000 which includes closing costs.

On February 11, 2026, the PW CO CanRE Mav 14 LLC (“Mav 14”) property was sold at auction. As part of the sale, the Trust wrote off accrued property tax of approximately $61,000 and recognized a total loss of approximately $494,000.

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, 2025, the last tax return completed to date, the Trust has a federal net operating loss of $58.3 million, which may reduce or eliminate this requirement.

2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

Stock Based Compensation Accounting Policy

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

Basis of Presentation

These unaudited consolidated financial statements have been prepared in accordance with GAAP.

Principles of Consolidation

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

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.

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.

Income/(Loss) per Common Share

Basic net income/(loss) per common share is computed by dividing net loss available to common shareholders 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 each of September 30, 2026 and December 31, 2025, the total number of common stock equivalents was 18,750, composed entirely of stock options which are out-of-the-money and anti-dilutive, so they were excluded from diluted EPS for all periods presented.

On June 2, 2026, the Trust effected a 1 for 10 reverse stock split. All share and per-share amounts in these financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented.

The following table sets forth the computation of basic and diluted loss per common share:

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 nine months ended September 30, 2026, there were two single family rental property acquisitions and for the nine months ended September 30, 2025, 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 its 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:

Depreciation

Depreciation is computed using the straight-line method over the estimated useful lives of 20 years for greenhouses, and single family rental properties,39 years for auxiliary buildings, except for PW CA Canndescent, LLC for which it was determined that the buildings have a useful life of 37 years. For the three months ended September 30, 2026 and 2025, approximately $7,000 and $14,000 depreciation expense was recorded, respectively. For the nine months ended September 30, 2026 and 2025, approximately $24,000 and $37,000 depreciation expense was recorded, respectively.

Assets Held for Sale

The Trust classifies a property as held for sale when all of the criteria in ASC 360-10-45-9 are met: management, having the authority to approve the action, has committed to a plan to sell the property; the property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; an active program to locate a buyer and other actions required to complete the plan have been initiated; the sale is probable and the transfer is expected to qualify for recognition as a completed sale within one year; the property is being actively marketed at a price that is reasonable in relation to its current fair value; and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Properties classified as held for sale are reported at the lower of carrying value or fair value less costs to sell and are no longer depreciated. As of September 30, 2026, the Trust had one property held for sale and as of December 31, 2025, the Trust had one property that was considered assets held for sale. See Note 7 for discussion of its assets held for sale.

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.” The measurement model applied depends on whether the property is classified as held for sale or held for use.

Properties classified as held for sale.

Upon classification of a property as held for sale, and at each subsequent reporting date, the property is measured at the lower of its carrying value or fair value less costs to sell, and an impairment charge is recognized for any excess of carrying value over that amount. Because the Trust treats each individual property as a separate asset group, this assessment is performed on a property-by-property basis. Fair value less costs to sell is estimated using the most current market information available for each property, consisting of the listing price under the current listing agreement, the purchase option price contained in the related lease agreement, or, where available, the price in an executed purchase and sale agreement, in each case reduced by estimated broker commissions and other direct costs of disposal.

No impairment charges were recognized for properties classified as held for sale during the three months ended September 30, 2026 and 2025. During the nine months ended September 30, 2026 and 2025, impairment charges of approximately $366,000 and $14,000, respectively, were recognized for properties held for sale.

Properties classified as held for use.

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. 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. 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

During each of the three and nine months ended September 30, 2026 and 2025, impairment expense of approximately $41,000 and $32,000, respectively, was recognized for assets held for use.

In the aggregate, impairment charges of approximately $41,000 and $32,000 were expensed during the three months ended September 30, 2026 and 2025, respectively, and approximately $407,000 and $45,000 during the nine months ended September 30, 2026 and 2025, respectively. 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.

Revenue Recognition

The Railroad Lease (“P&WV 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 three and nine months ended September 30, 2026 and 2025, the Trust did not write off any straight-line rent receivable against rental income. Expenses for which tenants are contractually obligated to pay, such as maintenance, property taxes and insurance expenses are not reflected in the Trust’s consolidated financial statements unless paid by the Trust.

The following table provides the breakdown of rental income recognition (not including the direct finance lease):

Deferred rent receivable as of September 30, 2026 and December 31, 2025 is approximately $212,000 and $328,000, respectively.

Intangibles

A portion of the acquisition price of the assets acquired by PW Regulus Solar, LLC (“PWRS”) has 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 three months ended September 30, 2026 and 2025, approximately $57,000 of the intangibles was amortized. For each of the nine months ended September 30, 2026 and 2025, approximately $171,000 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 wereno impairment charges recorded for Intangible Assets for the three and nine months ended September 30, 2026 and 2025.

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 for the subsequent years ending December 31:

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. As of September 30, 2026 and December 31, 2025, the Trust owns publicly traded level 1 REIT securities with a fair market value of $141,131 and $86,537, respectively, based on the closing prices of those dates.

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 accrued until maturity on October 30, 2025 and a default rate of 18%, thereafter. The note was 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. On May 4, 2026, Power REIT received payment of approximately $794,000, which included $597,000 of principal with the remaining amount relating to accrued interest and reimbursement of certain legal fees. As of September 30, 2026, the balance of this loan is $0.

During the nine months ended September 30, 2026, the Trust collected $597,000 of principal on the PW SD mortgage loan receivable, which had been fully reserved as of December 31, 2025. The reversal of the related allowance is presented as Recovery of allowance for receivable within total expenses, and the principal collection is presented within investing activities. In the Trust’s Form 10-Q for the quarter ended June 30, 2026, this amount was included in other income within total income and in net cash provided by operating activities. This presentation had no effect on net income (loss), net income (loss) per share, total assets, shareholders’ equity or the net change in cash and cash equivalents for any period.

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 September 30, 2026 and December 31, 2025, the balance of the loan was approximately $810,000 and $884,000 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 September 30, 2026, and December 31, 2025, the balance of the loan is approximately $84,000 and $97,000, respectively.

On September 18, 2026, PW CO CanRE Tam 7 LLC provided seller financing in conjunction with selling the Tamarack 7 property in the amount of $350,000 with an 8% per annum interest rate for the first year, 12% per annum interest rate for the second year, and 14% per annum interest rate for the third year until maturity. The seller financing has a three-year maturity with a balloon payment for the $350,000 due on the thirty sixth month. The note is secured by the property and a personal guarantee of the owner of the entity which purchased the property. As of September 30, 2026 and December 31, 2025, the balance of the loan is approximately $350,000 and $0, respectively.

After reviewing the collectability for mortgage loan receivables, the Trust recorded an allowance for receivable of approximately $597,000 during the year ended December 31, 2025. The recovery of the allowance for the nine months ended September 30, 2026 and 2025 was $597,000 and $0, respectively. There wasno allowance as of September 30, 2026 and 2025.

Other Income

Other income consists of interest income earned on the Trust’s mortgage loan receivables and on its bank deposits. For the three months ended September 30, 2026 and 2025, other income was approximately $39,000 and $38,000, respectively. For the nine months ended September 30, 2026 and 2025, other income was approximately $317,000 and $126,000, respectively. The increase was primarily attributable to approximately $197,000 recognized upon the May 4, 2026 repayment of the PW SD mortgage loan, which represents the amount received in excess of the principal collected.

Other Assets

Other assets as of September 30, 2026 and December 31, 2025 is approximately $365,000 and $310,000 respectively. Other assets as of September 30, 2026 primarily consists of approximately $141,000 of fair market value of securities of a publicly traded REIT and approximately $213,000 of prepaid expenses related to the filing of an S-3 Registration Statement with the SEC and associated offering related expenses. 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.

Interest Expense

Interest expense for the three months ended September 30, 2026 related to the PW PWV Loan (defined below) and the 2015 PWRS Loan (defined below) was approximately $167,000 and $69,000, respectively, compared to interest expense for the three months ended September 30, 2025 that was approximately $169,000, $75,000, respectively, related to the PW PWV Loan and the 2015 PWRS Loan, respectively. Interest expense for the nine months ended September 30, 2026 related to the PW PWV Loan (defined below) and the 2015 PWRS Loan (defined below) was approximately $503,000 and $215,000, respectively, compared to interest expense for the nine months ended September 30, 2025 that was approximately $510,000, $232,000 and $1,070,000, respectively, related to the PW PWV Loan, the 2015 PWRS Loan and the Greenhouse Loan, respectively.

General and Administrative Expenses

General and Administrative Expense for the three months ended September 30, 2026 and 2025 is approximately $195,000 and $266,000, respectively, which includes a non-cash share-based compensation expense of approximately $0 and $48,000, respectively. General and Administrative Expense for the nine months ended September 30, 2026 and 2025 is approximately $642,000 and $934,000, respectively, which includes a non-cash share-based compensation expense of approximately $0 and $334,000, respectively.

Preferred Stock

As of September 30, 2026, the Trust has issued approximately $8.5 million of its Series A Preferred Stock. The shares of Series A Preferred Stock have no stated maturity, are not currently subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless they are redeemed, repurchased or converted. As described in more detail in Note 1, on September 3, 2026, the Trust filed a Preliminary Proxy Statement proposing the Conversion of the Series A Preferred Stock into Common Stock. The Trust believes that this is in the best interest of the Trust because it will clean up the Balance Sheet and help the Trust maintain its NYSE American listing. The conversion ratio of .5 Common Shares for each Preferred Share is a ratio that already exists in the governing documents but only in the event of a de-listing and de-registration as a publicly reporting entity. The Trust believes that if the proposal is approved and can complete the conversion, the Trust is more likely to continue as a listed and publicly reporting entity. The alternative may be a de-listing of the Common and Preferred Shares and a de-registration as a publicly reporting entity. There can be no assurance that the conversion will be completed.

Property Expenses and Taxes

Property expenses and taxes for the three months ended September 30, 2026 and 2025 was approximately $57,000 and $100,000, respectively. Property expenses and taxes for the nine months ended September 30, 2026 and 2025 was approximately $219,000 and $835,000, respectively.

The Trust is not current on payment of property taxes for the Greenhouse Portfolio. These taxes are included on the Balance Sheet as accrued expenses and liabilities held for sale of approximately $1,122,000. If the property taxes remain delinquent, the remaining Greenhouse Portfolio will be subject to tax foreclosure actions.

Recent Accounting Pronouncements

The Trust has evaluated recent accounting pronouncements and determined that, except as discussed below, none are expected to have a significant effect on the Trust’s consolidated financial statements or related disclosures. 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 ASU 2024-03 on its consolidated financial statements and related disclosures.

3 – LIQUIDITY AND CAPITAL RESOURCES

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 September 30, 2026, the Trust had incurred recurring losses from operations. The Trust believes that based on its current forecasts, its cash on hand, together with cash flow from operations, it should be sufficient to fund the Trust’s capital requirements for at least the next twelve months from the issuance date of its consolidated financial statements. The Trust can make no assurance regarding its ability to achieve its forecasts, which are materially dependent on the Trust’s financial performance and the ever-changing market. Based on management’s assessment, substantial doubt about the Trust’s ability to continue as a going concern does not exist for the twelve-month period following the issuance of these consolidated financial statements.

On a consolidated basis, the Trust’s cash and cash equivalents totaled $2,650,441 as of September 30, 2026, an increase of $415,135 from December 31, 2025. During the nine months ended September 30, 2026, the increase in cash was primarily due to receipt of payment for the PW SD mortgage loan and the sale of the Vinita property.

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. During the quarter ended September 30, 2026, the Trust acquired two single family rental properties and is actively exploring the expansion of this portfolio. 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 –DISPOSITIONS AND ACQUISITIONS

2026 Dispositions and Acquisitions

On September 18, 2026, a wholly owned subsidiary of Power REIT, PW CO CanRE Tam 7 LLC, sold a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Tam 7 and the sale included all property improvements and equipment. The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $400,000 and the subsidiary of the Trust provided $350,000 of seller financing at an interest rate of 8% per annum during year one, 12% per annum during year two, and 14% per annum for the third year following the closing with the entire principal balance due at maturity. There was an approximately $85,000 loss on sale which includes closing costs.

On August 14, 2026 and on September 9, 2026, a newly formed wholly owned subsidiary of Power REIT, PowerHouse OK 1 LLC purchased single-family rental properties in Tulsa, Oklahoma for $75,000 and $65,000, respectively.

On July 31, 2026, a wholly owned subsidiary of Power REIT, PW CO CanRE Tam 19 LLC, sold its interest in a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Tam 19 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 $212,500 and the loss recognized was approximately $660 which includes closing costs.

On June 24, 2026, a wholly owned subsidiary of Power REIT, PW OK CanRE Vinita LLC, sold its interest in a cannabis related greenhouse cultivation property located in Vinita, Oklahoma. The property was described in prior filings as Vinita 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 $315,000 and the loss recognized was approximately $110,000 which includes closing costs.

On February 11, 2026, the PW CO CanRE Mav 14 LLC (“Mav 14”) property was sold at auction. As part of the sale, the Trust wrote off accrued property tax of approximately $61,000 and recognized a total loss of approximately $494,000.

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.

5 – 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, greenhouse cultivation facilities and single family rental properties have lease terms ranging between month to month and 99 years. Payments from the Trust’s leases are recognized on a straight-line basis over the terms of the respective leases or on a cash basis for tenants with collectability issues. During the nine months ended September 30, 2026 and 2025, the Trust wrote off a net amount of $0 in straight-line rent receivable against rental income. Total revenue from its leases recognized for the three months ended September 30, 2026 and 2025 is approximately $503,000 and $474,000, respectively. Total revenue from its leases recognized for the nine months ended September 30, 2026 and 2025 was approximately $1,399,000 and $1,379,000, respectively.

The following table provides the breakdown of revenue:

Due to significant price compression in the wholesale cannabis market, the Trust’s cannabis related tenants have experienced severe financial distress. Unfortunately, starting in 2022, collections from the CEA portfolio has diminished to a nominal amount. The Trust intends to continue to focus on maximizing the value of the CEA portfolio. 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. During the quarter ended September 30, 2026, the Trust acquired two single family rental properties and is actively exploring the expansion of this portfolio. In addition, the Trust is exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

Historically, the Trust’s revenue has been concentrated on a relatively limited number of investments, industries and lessees. For the nine months ended September 30, 2026, Power REIT recognized approximately 92% 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 49% and 43% of rental income and lease income from direct financing lease, respectively. For the nine months ended September 30, 2025, Power REIT collected approximately 93% of its rental income and lease income from direct financing lease from two properties. The tenants were Norfolk Southern Railway and Regulus Solar LLC which represented 50% and 43% of rental income and lease income from direct financing lease, respectively.

The following is a schedule by years of minimum future rentals on non-cancelable operating leases as of September 30, 2026 for assets and assets held for sale where revenue recognition is considered on a straight-line basis:

6 –LONG-TERM DEBT

On November 6, 2015, PWRS entered into a loan agreement (the “2015 PWRS Loan Agreement”) with a certain 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 for the benefit of the lender dated November 6, 2015 with a maturity date of October 14, 2034 and a 4.34% interest rate per annum. As of September 30, 2026 and December 31, 2025, the balance of the 2015 PWRS Loan was approximately $5,500,000 (net of unamortized debt costs of approximately $174,000) and $5,998,000 (net of unamortized debt costs of approximately $190,000), respectively.

On November 25, 2019, Power REIT, through a 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 for the benefit of the lender for $15,500,000, with a fixed interest rate of 4.62% per annum and fully amortizes over the life of the financing which matures in 2054. The PW PWV Loan is non-recourse to Power REIT. The balance of the loan as of September 30, 2026 and December 31, 2025 was approximately $13,799,000 (net of approximately $251,000 of capitalized debt costs) and approximately $13,974,000 (net of approximately $258,000 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 intends to seek to realize value from the retained assets by leasing and/or selling them. 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 also relieved the ongoing costs associated with maintaining the Nebraska and Michigan properties. The balance of the Greenhouse Loan as of September 30, 2026 and December 31, 2025 is $0. During the nine months ended September 30, 2026 and 2025, the Trust recognized approximately $0 and $554,000, respectively, of late charges, forbearance fees, legal fees, foreclosure fees and appraisal fees which is included in interest expense in Consolidated Statements of Operations.

The amount of principal payments remaining on Power REIT’s debt as of September 30, 2026 is as follows:

7 – IMPAIRMENT AND ASSETS HELD FOR SALE

For the three months ended September 30, 2026 and 2025, the Trust recorded a non-cash impairment charge of approximately $41,000 and $32,000, respectively. For the nine months ended September 30, 2026 and 2025, the Trust recorded a non-cash impairment charge of approximately $407,000 and $45,000, respectively. 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.

As of September 30, 2026, management reclassified Maverick 1 (Ordway, CO), Tamarack 3 (Ordway, CO), Tamarack 4 and 5 (Ordway, CO), Maverick 5 (Ordway, CO), Tamarack 27 and 28 (Ordway, CO) and Walsenburg (CO) from held for sale to held for use because the held for sale criteria in ASC 360-10-45-9 are no longer met. Under ASC 360-10-35-44, each property is measured at the lower of (a) its carrying amount before it was classified as held for sale, adjusted for the depreciation that would have been recognized had it been continuously held for use, and (b) its fair value at September 30, 2026. For Maverick 1, Tamarack 4 and 5, Maverick 5, Tamarack 3 and Walsenburg, fair value is the lower amount. These properties were already written down to fair value less costs to sell while held for sale, so no additional impairment is required. For Tamarack 27 and 28, the catch-up carrying amount is lower than fair value, so the property is written down to that amount and recorded an impairment expense in 3Q26. This adjustment is the only impairment-related charge for the quarter.

A summary of the Trust’s impairment expense for the three and nine months ended September 30, 2026 and 2025 is below:

As of September 30, 2026, the Trust considered Desert Hot Spring (CA) as an Asset Held for Sale.

The Trust has aggregated and classified the assets and liabilities of the property to be sold as held for sale in its Consolidated Balance Sheets as of September 30, 2026 since all criteria under ASC 360-10-45-9 were met. The balance sheet as of December 31, 2025 has been recast to achieve comparability by only including the Desert Hot Spring property.

The assets and liabilities for the asset held for sale were as follows:

ASSETS

8 –EQUITY AND LONG-TERM COMPENSATION

Reverse Stock Split

On June 2, 2026, the Trust consummated a one-for-ten reverse stock split of shares of the Trust’s common stock, $0.001 par value per share (the “Common Stock”), where every ten issued and outstanding shares of Common Stock were converted into one share of Common Stock (the “Reverse Stock Split”). At the market open on June 3, 2026 (the first business day after the effective time of the Reverse Stock Split), the Common Stock began trading on a split-adjusted basis with a new CUSIP number (73933H 309). No fractional shares were issued in connection with the Reverse Stock Split. Instead, each stockholder that held fractional shares as a result of the Reverse Stock Split were entitled to receive, in lieu of such fractional shares, cash in an amount equal to the applicable fraction multiplied by the $8.30, the closing price of the Common Stock on NYSE American on June 2, 2026 (as adjusted for the Reverse Stock Split), without any interest. The Reverse Stock Split was applied to all outstanding shares of Common Stock and did not affect any particular stockholder’s relative ownership percentage of shares of Common Stock, except for de minimis changes resulting from the payment of cash in lieu of fractional shares. The Reverse Stock Split also did not affect the relative voting or other rights that accompany the shares of Common Stock, except to the extent that it resulted from a stockholder receiving cash in lieu of fractional shares.

ATM Program

On January 24, 2025, the Trust entered into a sales agreement (the “Sales Agreement”), with A.G.P./Alliance Global Partners (“AGP”) pursuant to which it may, from time to time, issue and sell its 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 it 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 its ability to sell securities registered on its registration statement on Form S-3 will be limited until such time as the market value of the Trust’s voting securities held by non-affiliates is $75 million or more. As of September 30, 2026,28,261 common shares had been sold pursuant to the Sales Agreement. During the nine months ended September 30, 2026, the Trust sold 1,078 common shares pursuant to the Sales Agreement for net proceeds of $10,945. During the nine months ended September 30, 2025, no common stock was sold.

Summary of Share Based Compensation Activity

Power REIT’s 2020 Equity Incentive Plan, which superseded the 2012 Equity Incentive 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, Trustees 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 September 30, 2026, the aggregate number of common shares that may be issued pursuant to outstanding awards is currently 280,639 which is subject to adjustment per the Plan.

Summary of Share-Based Compensation Activity – Options

On July 15, 2022, the Trust granted non-qualified stock options (“options”) to acquire 20,500 common shares at a price of $134.40 to its independent trustees, officers and an employee. 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 its 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, 2023,625 options were forfeited and on April 30, 2023,125 options were forfeited by an employee who is no longer employed by the Trust. On February 29, 2024,472 options and on August 29, 2025,528 options were forfeited due to the death of a Trustee.

The summary of share-based compensation activity for the nine months ended September 30, 2026, with respect to the Trust’s stock options, is as follows:

Summary of Activity - Options

The weighted average remaining term of the options is 5.79 years.

Summary of Share-Based Compensation Activity – Restricted Stock

During the nine months ended September 30, 2026, the Trust did not grant any shares of restricted stock to its officer or independent trustees.

Share-based Compensation

During the nine months ended September 30, 2026, the Trust recorded approximately $0 of non-cash expense related to restricted stock and options granted compared to approximately $52,000 of non-cash expense related to restricted stock and approximately $282,000 of non-cash expense related to options granted for the nine months ended September 30, 2025. As of September 30, 2026, there wasno 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 and does not currently intend to acquire shares on the open market.

Preferred Stock Dividends

During each of the nine months ended September 30, 2026 and 2025, the Trust did not declare dividends of approximately $490,000 to holders of Power REIT’s Series A Preferred Stock. The amount of unpaid dividends on the outstanding shares of Series A Preferred Stock is approximately $2,611,000 ($7.75 per share) at September 30, 2026 and $2,122,000 ($6.30 per share) at December 31, 2025.

9 –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 and total assets. 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.

10 –CONTINGENCIES

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

Legal Proceedings

From time to time, the Trust has been party to various litigation matters incidental to the conduct of its business. The Trust is not presently party to any material legal proceedings. Future litigation could have a material adverse effect on its business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.