Medalist Diversified, Inc.: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis is based on, and should be read in conjunction with, the condensed consolidated financial statements and the related notes thereto of Medalist Diversified REIT, Inc. contained in this Quarterly Report.

This following discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Statement Regarding Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with those statements. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The U.S. Private Securities Litigation Reform Act of 1995 (the “1995 Act”) provides a “safe harbor” for forward-looking statements. This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, but not limited to, statements relating to our business activities, financing sources, liquidity, redemption of our mandatorily redeemable preferred stock and strategy. We have used the words “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and similar terms and phrases to identify forward-looking statements in this Quarterly Report.

The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

• the competitive environment in which we operate;
• local, regional, national and international economic and geopolitical conditions, including recent trade tensions and prolonged U.S. federal government shutdown;
• capital expenditures;
• the availability, terms and deployment of capital;
• financing risks;
• inflation;
• the general level of interest rates;
• changes in our business or strategy;
• fluctuations in interest rates and increased operating costs;
• our incurrence of impairment charges;
• risks and uncertainties associated with the implementation of our DST Program (as defined below);
• the degree and nature of our competition;
• our dependence upon our key personnel;
• defaults on or non-renewal of leases by tenants;
• decreased rental rates or increased vacancy rates;
• our ability to make distributions on shares of our common stock;
• difficulties in identifying properties to acquire and completing acquisitions;
• our ability to operate as a public company;
• natural disasters such as hurricanes, floods or tornadoes;
• the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus and measures intended to prevent the spread or address the effects thereof;
• our ability to maintain our qualification as a REIT for U.S. federal income tax purposes;
• our ability to maintain an active trading market for our common stock on The Nasdaq Capital Market (“Nasdaq”) and maintain continued listing on Nasdaq and the likelihood that a delisting of our common stock from Nasdaq could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell our common stock;
• potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or tax laws, and potential increases in real property tax rates;
• potential disruption to or compromise of our information technology networks or data, or those of third parties upon which we rely; and
• related industry developments, including trends affecting our business, financial condition and results of operations.

The forward-looking statements contained in this Quarterly Report are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this Quarterly Report speaks only as of the date of this Quarterly Report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable laws.

Overview

Company

Medalist Diversified REIT, Inc. is a Maryland corporation formed on September 28, 2015. Beginning with our taxable year ended December 31, 2017, we believe that we have operated in a manner qualifying us as a real estate investment trust (“REIT”), and we have elected to be taxed as a REIT for federal income tax purposes. Medalist Diversified REIT, Inc. serves as the general partner of Medalist Diversified Holdings, LP which was formed as a Delaware limited partnership on September 29, 2015.

We were formed to acquire, reposition, renovate, lease and manage income-producing properties. Our current primary focus is on (i) managing our legacy portfolio consisting of retail and flex-industrial properties in secondary and tertiary markets in Virginia,

North Carolina, and South Carolina, (ii) managing our STNL property portfolio in geographic markets across the United States, (iii) implementing a program by which we will act as a sponsor of Delaware Statutory Trust (“DST”) investment offerings and (iv) disposition of certain properties in our portfolio to generate funds for acquisition of properties suitable for contribution to our DST program. We may also pursue, in an opportunistic manner, other real estate-related and non-real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, indirect investments in real property, such as those that may be obtained in a joint venture, and ownership of crypto assets. While these types of investments are not intended to be a primary focus, we may make such investments in our discretion.

As of September 30, 2025, our portfolio consisted of the following properties:

In addition, as of September 30, 2025, we also owned two undeveloped parcels which are currently being marketed for use as STNL properties including (i) an outparcel at our Lancer Center Property consisting of approximately 1.80 acres (the “Lancer Outparcel”), (the exact size of the Lancer Outparcel will not be determined until a user is identified), and (ii) the Hanover Square Outparcel consisting of 0.86 acres located adjacent to the Hanover Square Shopping Center.

Reporting Segments

We establish operating segments at the property level and aggregate individual properties into reportable segments based on product types in which we have investments. As of September 30, 2025, our reportable segments were retail center properties, flex center properties and STNL properties.

Recent Highlights

Acquisition of the Tesla Pensacola Property, Commencement of DST Program

On July 18, 2025, we, through a wholly-owned subsidiary, completed the acquisition of a Tesla service, sales and delivery facility consisting of a 45,461 square foot, single story building on 3.498 acres of land located at 312 E. 9 Mile Road, Pensacola, Florida (the “Tesla Pensacola Property”). The total purchase price paid for the Tesla Pensacola Property was $14,544,504 and was purchased from an unaffiliated seller. The acquisition was funded using a line of credit from Farmers and Merchants Bank of Long Beach in the amount of $14,700,000 (the “Farmers Line of Credit”).

As of September 30, 2025, we had committed to a plan to contribute the Tesla Pensacola Property to a newly formed Delaware Statutory Trust (“DST”). Following the contribution, we plan to launch a program (the “DST Program”) to raise capital, through the Operating Partnership, through private placement offerings exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by selling beneficial interests (the “DST Interests”) in specific DSTs holding real properties (the “DST Properties”). We expect that the DST Program will provide us with the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for investors who may be seeking like-kind replacement properties to complete tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code (the “Code”). We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, reduce our borrowings, repay indebtedness, and for other corporate purposes. In addition, we expect to generate fee-based income, such as acquisition fees, asset management fees, disposition fees, and financing coordination fees, among others, from the DST Program. However, there can be no assurance that we will be successful in our efforts to sell the DST Interests or to generate fee-based income. As of November 6, 2025, we have not initiated our efforts to raise gross offering proceeds through the DST Program.

Farmers Line of Credit

On July 18, 2025, we, through our wholly-owned subsidiaries, entered into the Farmers Line of Credit in the amount of $14,700,000 in connection with the acquisition of the Tesla Pensacola Property, discussed above. The Farmers Line of Credit is cross collateralized by the Tesla Pensacola Property, the Citibank Property, the Buffalo Wild Wings Property, and the United Rentals. Amounts outstanding under the Farmers Line of Credit bear interest at a floating rate of the prime rate announced by Farmers, subject to a floor rate of 7.25%. As of September 30, 2025, the interest rate was 7.25%. The Farmers Line of Credit has a one-year term and any outstanding balance will be due in full on August 10, 2026. The Farmers Line of Credit is unconditionally guaranteed by our company and our company’s Operating Partnership.

Financing Activities

Mortgages Payable

We have historically financed acquisitions of our investment properties through mortgages. The following table is presented as of September 30, 2025.

(unaudited)

Amounts presented do not reflect unamortized loan issuance costs.

(a) The mortgage loan for the Franklin Square Property in the original principal amount of $13,250,000 has a ten-year term and matures on December 6, 2031. The mortgage loan bears interest at a fixed rate of 3.808% and was interest only until January 6, 2025, at which time the monthly payment became $61,800, which includes interest and principal based on a thirty-year amortization schedule. The mortgage includes covenants that we maintain (i) a net worth of $13,250,000, excluding the assets and liabilities associated with the Franklin Square Property, and (ii) liquid assets of no less than $1,000,000. As of September 30, 2025 and December 31, 2024, respectively, we believe that we are compliant with these covenants. We have guaranteed the payment and performance of the obligations of the mortgage loan.

(b) The mortgage loan for the Ashley Plaza Property bears interest at a fixed rate of 3.75% and was interest only for the first twelve months. Beginning on October 1, 2020, the monthly payment became $52,795 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. Effective on December 26, 2023, we assumed certain guaranty obligations under the Ashley Plaza mortgage loan. These obligations include covenants that we maintain (i) a net worth of $11,400,000, excluding the liabilities associated with the mortgage loan for the Ashley Plaza Property and (ii) liquid assets of no less than $1,140,000. As of September 30, 2025 and December 31, 2024, respectively, we believe that we are compliant with these covenants.

(c) The mortgage loan for the Brookfield Property bears interest at a fixed rate of 3.90% and is interest only for the first twelve months. Beginning on November 1, 2020, the monthly payment became $22,876 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. Effective on December 26, 2023, we assumed certain guaranty obligations under the Brookfield Property mortgage loan. These obligations include covenants that we maintain (i) a net worth of $4,850,000, excluding the liabilities associated with the mortgage loan for the Brookfield Property and (ii) liquid assets of no less than $485,000. As of September 30, 2025 and December 31, 2024, respectively, we believe that we are compliant with these covenants.

(d) The interest rate for the mortgage loan for the Parkway Property was originally based on ICE LIBOR plus 225 basis points, with a minimum rate of 2.25%. After the discontinuation of LIBOR on June 30, 2023, the ICE LIBOR index was replaced by Term SOFR, with an adjusted margin of 236.44 basis points. Under the terms of the mortgage, the interest rate payable each month may not change by greater than 1% during any six-month period and 2% during any 12-month period. As of September 30, 2025 and December 31, 2024 the rate in effect for the Parkway Property mortgage was 6.64% and 6.92%, respectively. The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a thirty-year amortization schedule. The mortgage loan for the Parkway Property includes a covenant to maintain a debt service coverage ratio of not less than 1.30 to 1.00 on an annual basis. As of September 30, 2025 and December 31, 2024, respectively, we believe that we are compliant with this covenant.

On October 28, 2021, we entered into the Interest Rate Protection Transaction to limit our exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, our interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR. For the period from September 1, 2022 through September 30, 2025, the applicable index (LIBOR or SOFR), exceeded the 3% cap, and payments from the Interest Rate Protection Transaction reduced our net interest expense. Payments to us from the Interest Rate Protection Transaction are recorded as an offset to interest expense on our condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024, respectively.

(e) On June 13, 2022, we entered into a mortgage loan facility with Wells Fargo Bank (the “Wells Fargo Mortgage Facility”) in the principal amount of $18,609,500. The proceeds of this mortgage were used to finance the acquisition of the Salisbury Marketplace Property and to refinance the mortgages payable on the Lancer Center Property and the Greenbrier Business Center Property. The Wells Fargo Mortgage Facility bears interest at a fixed rate of 4.50% for a five-year term. The monthly payment, which includes interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule, is $103,438. We have provided an unconditional guaranty of the payment of and performance under the terms of the Wells Fargo Mortgage Facility. The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis, a combined minimum debt yield of 9.5% on the Salisbury Marketplace Property, the Lancer Center Property, and the Greenbrier Business Center Property, and the maintenance of liquid assets of not less than $1,500,000. As of September 30, 2025 and December 31, 2024, respectively, we believe that we are compliant with these covenants.

As of September 30, 2025, the outstanding balance, monthly payment and unamortized loan issuance costs related to the Wells Fargo Mortgage Facility are allocated, for reporting purposes, among the Salisbury Marketplace Property, Lancer Center Property, and Greenbrier Business Center Property, based on each property's proportionate share of the total combined appraised value at the time the Wells Fargo Mortgage Facility was originated. The portion allocated to the Lancer Center Property is reported in Mortgages payable, net, on our condensed consolidated balance sheets, while the portions allocated to the Salisbury Marketplace Property and Greenbrier Property, representing the estimated paydown amount upon their anticipated sale, is included in mortgages payable, net, associated with assets held for sale on our condensed consolidated balance sheets.

We financed acquisitions of our assets held for sale through mortgages, which as of September 30, 2025, are recorded as mortgages payable, net, associated with assets held for sale, on our consolidated balance sheets, as follows:

(unaudited)

45

Summary of Critical Accounting Policies

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or a different presentation of our financial statements. Below is a discussion of the accounting policies that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain. A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 2, “Summary of Significant Accounting Policies,” of our Condensed Consolidated Financial Statements. We believe that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.

Revenue Recognition

Principal components of our total revenues for our retail center properties, flex center properties and STNL revenues include base rents and tenant reimbursements. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Certain lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent) which we recognize when the tenants achieve the specified targets as defined in their lease agreements. We periodically review the valuation of the asset/liability resulting from the straight-line accounting treatment of our leases in light of any changes in lease terms, financial condition or other factors concerning our tenants.

Rents and Other Tenant Receivables

We record a tenant receivable for amounts due from tenants such as base rents, tenant reimbursements and other charges allowed under the lease terms. We periodically review tenant receivables for collectability and determine the need for an allowance for the uncollectible portion of accrued rents and other accounts receivable based upon customer creditworthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels and current economic trends. We consider a receivable past due once it becomes delinquent per the terms of the lease. A past due receivable triggers certain events such as notices, fees and other actions per the lease.

Acquisition of Investments in Real Estate

The adoption of Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805), as discussed in Note 2, “Summary of Significant Accounting Policies” of the condensed consolidated financial statements included in this report, has impacted our accounting framework for the acquisition of investment properties. Upon acquisition of investment properties, we estimate the fair value of acquired tangible assets (consisting of land, buildings and improvements, and furniture, fixtures and equipment) and identified intangible assets and liabilities, including in-place leases, above- and below-market leases, tenant relationships and assumed debt based on evaluation of information and estimates available at that date. Fair values for these assets are not directly observable and estimates are based on comparable market data and other information which is subjective in nature, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information.

Impairment of Long-Lived Assets

We periodically review investment properties for impairment on a property-by-property basis to identify any events or changes in circumstances that indicate that the carrying value of investment properties may not be recoverable. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. If any such events or changes in circumstances are identified, we perform a formal impairment analysis. We measure any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization, is less than the carrying value of the property. To the extent impairment has occurred, we charge to income the excess of carrying value of the property over its estimated fair value. We estimate fair value using data such as operating income, estimated capitalization rates or multiples, leasing prospects and local market information. We also review our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of our intangible assets may not be recoverable, but at least annually.

REIT Status

We are a Maryland corporation that has elected to be treated, for U.S. federal income tax purposes, as a REIT. We elected to be taxed as a REIT under the Code for the year ended December 31, 2017 and have not revoked such election. A REIT is a corporate entity which holds real estate interests and must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted taxable income to stockholders. As a REIT, we generally will not be subject to corporate level federal income tax on our taxable income if we annually distribute 100% of our taxable income to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to regular federal and state corporate income taxes and may not be able to elect to qualify as a REIT for five taxable years including the year during which we ceased to qualify as a REIT. Our qualification as a REIT requires management to exercise significant judgment and consideration with respect to operational matters and accounting treatment. Therefore, we believe our REIT status is a critical accounting estimate.

Evaluation of Our Ability to Continue as a Going Concern

Under the accounting guidance related to the presentation of financial statements, we are required to evaluate, on a quarterly basis, whether or not our current financial condition, including our sources of liquidity at the date that the condensed consolidated financial statements are issued, will enable us to meet our obligations as they come due arising within one year of the date of the issuance of our condensed consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that we will be able to continue as a going concern. Our condensed consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In applying applicable accounting guidance, management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our obligations due over the next twelve months, as well as our recurring business operating expenses.

We have concluded that it is probable that we will be able to meet our obligations arising within one year of the date of issuance of these condensed consolidated financial statements within the parameters set forth in the accounting guidance. For additional information regarding our liquidity, see Note 5 – Loans Payable and Note 8 – Commitments and Contingencies in the notes to our condensed consolidated financial statements.

Liquidity and Capital Resources

Our business model is intended to drive growth through acquisitions. Access to the capital markets is an important factor for our continued growth and success. Our primary liquidity needs are funding for (1) operations, including operating expenses, corporate and administrative costs, payment of principal of, and interest on, outstanding indebtedness, and escrow and reserve payments associated with long-term debt financing for our properties; (2) investing needs, including property acquisitions and recurring capital expenditures; and (3) financing needs, including cash dividends and debt repayments.

Internal liquidity to fund operating needs is expected to be provided primarily by the rental receipts from our investment properties. The Farmers Line of Credit will not be a continuing source of liquidity for us. Upon repayment of the Farmers Line of Credit, no further advances will be available.

Cash Flows

At September 30, 2025, our consolidated cash and restricted cash on hand totaled $3,802,586 compared to consolidated cash on hand of $6,072,736 at December 31, 2024. Cash from operating activities, investing activities and financing activities for the nine months ended September 30, 2025 are as follows:

Operating Activities

During the nine months ended September 30, 2025, our cash provided by operating activities was $2,271,897 compared to cash provided by operating activities of $1,410,969 for the nine months ended September 30, 2024, an increase in cash provided by operating activities of $860,928.

Cash flows from operating activities has two components. The first component consists of net operating (loss) income adjusted for non-cash operating activities. During the nine months ended September 30, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $1,661,864. During the nine months ended September 30, 2024, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $1,519,643. The increase of $142,221 in cash flows from operating activities for the nine months ended September 30, 2025 was primarily the result of increased net operating income from our investment properties and decreased interest expense resulting from the redemption of our mandatorily convertible preferred stock, offset by increased legal, accounting and other professional fees.

The second component consists of changes in assets and liabilities. Increases in assets and decreases in liabilities result in cash used in operations. Decreases in assets and increases in liabilities result in cash provided by operations. During the nine months ended September 30, 2025, net changes in asset and liability accounts resulted in $610,033 in cash provided by operations. During the nine months ended September 30, 2024, net changes in asset and liability accounts resulted in $108,674 in cash used in operations. This increase of $718,707 in cash provided by operations resulting from changes in assets and liabilities is a result of decreased changes in rent and other receivables, net, of $189,824, decreased changes in other assets of $308,703, and increased accounts payable and accrued liabilities of $312,230, all of which are sources of cash, offset by increased changes in unbilled rent of $92,050, which used cash.

The total of (i) the $142,221 increase in cash provided by operations from the first category and (ii) the $718,707 increase in cash provided by operations from the second category results in a total increase of cash provided by operations of $860,928 for the nine months ended September 30, 2025.

Management believes that separately evaluating these two components of our cash provided by operating activities provides management with additional insight into this GAAP measure. Management believes that separating changes in assets and liabilities, the second component, from net operating (loss) income adjusted for non-cash operating activities, the first component, is a meaningful measure of our operating performance, along with adjusted net operating income and adjusted funds from operations, presented below.

Investing Activities

During the nine months ended September 30, 2025, our cash used in investing activities was $15,964,554, compared to cash provided by investing activities of $2,300,540 during the nine months ended September 30, 2024, a decrease in cash provided by investing activities of $18,265,094.

During the nine months ended September 30, 2025, cash used in investing activities consisted of $1,131,036 in capitalized expenditures, including $338,998 in building improvements, $340,614 in leasing commissions, $418,710 in tenant improvements, and $32,714 in site improvements, $14,714,513 in investment property acquisitions, including $14,624,638 for the acquisition of the Tesla Pensacola Property and $89,875 for closing costs related to the Buffalo Wild Wings Property and United Rentals Property acquisitions, and $119,005 for the purchase of crypto assets. During the nine months ended September 30, 2024, cash provided by investing activities consisted of $3,110,149 in cash received from the disposal of the Hanover Square Shopping Center Property, offset by cash used in investing activities consisting of $145,345 in investment property acquisitions, including $100,891 in cash paid for the acquisition of the noncontrolling owner’s 16% interest in the Hanover Square Outparcel and $44,454 paid in cash for closing costs related to the Citibank Property acquisition, and $664,264 in capitalized expenditures, including $113,847 in building improvements, $2,300 in site improvements, $174,159 in leasing commissions and $373,958 in capitalized tenant improvements.

The non-cash investing activity for the nine months ended September 30, 2025, that did not affect our cash provided by investing activities was the issuance of $5,765,000 of OP Units, $2,620,000 of OP Units for the acquisitions of the Buffalo Wild Wings Property and $3,145,000 of OP Units for the United Rentals Property, $2,544,042 related to the Exchange of Common Shares for OP Units, the transfer of $15,168,178 from investment properties, net, to assets held for sale, the transfer of $503,675 of intangible assets, net, to assets held for sale, and the transfer of $476,656 of intangible liabilities, net, to liabilities held for sale.

The non-cash investing activity for the nine months ended September 30, 2024, that did not affect our cash provided by investing activities, was the issuance of $2,400,000 of OP Units for the acquisition of the Citibank Property and $74,105 of capital expenditures accrued as of September 30, 2024.

Financing Activities

During the nine months ended September 30, 2025, our cash provided by financing activities was $11,422,507 compared to cash used in financing activities of $2,552,455 during the nine months ended September 30, 2024, an increase in cash provided by financing activities of $13,974,962. During the nine months ended September 30, 2025 our cash provided by financing activities consisted of $14,321,378 in net proceeds from the Farmers Line of Credit, offset by $1,500,000 for the final redemption of our mandatorily redeemable preferred stock, $816,596 in principal payments for our mortgages, $441,487 in dividends and distributions, and $140,788 to repurchase Common Shares. During the nine months ended September 30, 2024, our cash used in financing activities consisted of $1,000,000 to repay the line of credit, short term, $754,398 in principal payments for our mortgages, $685,659 in dividends and distributions, $77,226 for the Operating Partnership Unit redemption, $32,467 in repurchases of Common Shares and $2,705 for the retirement of fractional shares resulting from the reverse stock split.

The non-cash financing activity for the nine months ended September 30, 2025, that did not affect our cash provided by financing activities was the transfer of $11,093,684 of mortgages payable, net, to mortgages payable, net, associated with assets held for sale.

Future Liquidity Needs

Liquidity for general operating needs and our investment properties is generally provided by the rental receipts from our retail properties, flex center properties and STNL properties, if any. We expect to provide any liquidity for growth (acquisition of new investment properties) by raising additional investment capital. In addition, we continually review and evaluate our outstanding mortgages payable for refinancing opportunities. While some of our mortgages payable are not pre-payable, some mortgages payable may present opportunities for refinancing.

Our primary, non-operating liquidity needs are $149,919 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on September 25, 2025 and paid on October 14, 2025 to holders of record on October 9, 2025, and $274,273 in principal payments due on its mortgages payable during the remaining three months ending December 31, 2025. In addition to liquidity required to fund these dividends and principal payments, we may also incur some level of capital expenditures for our existing properties that cannot be passed on to our tenants. We plan to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.

To meet these future liquidity needs, we have the following resources:

• $1,886,677 in unrestricted cash as of September 30, 2025;
• $1,915,909 held in lender reserves for the purposes of tenant improvements, leasing commissions, real estate taxes and insurance premiums;
• Approximately $4,450,000 from the sale of the Salisbury Marketplace Property which closed on October 23, 2025;
• Cash generated from operations during the remaining three months ending December 31, 2025, if any.

Additionally, the Farmers Line of Credit matures on August 10, 2026, at which time the full balance of $14,700,000 will be payable. Our company has received a commitment for $7,710,000 in permanent financing that will close upon our contribution of the Tesla Pensacola Property to our company’s first DST. The loan proceeds, net of closing costs, will be used to partially repay the Farmers Line of Credit. We expect that proceeds from the sale of beneficial interests in the DST, once issued, will be used to repay the remaining balance. There can be no assurance that the permanent financing will close or that the DST will be successful in selling beneficial interests or the timing of such potential issuances.

We expect these resources will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months and beyond. There can be no assurance that we will continue to generate cash flows at or above current levels.

Factors That May Influence Our Results of Operations

Economic Conditions

Rental revenues from our investment properties are our only source of income and are directly affected by a number of factors, including occupancy rates, lease structures, and tenant credit quality, as well as broader economic and policy developments that affect consumer sentiment. Our revenues can be significantly impacted by trends in consumer spending, interest rates, and market confidence, all of which shape demand for our tenants’ goods and services and, in turn, for occupancy in our investment properties.

The ability to lease space to creditworthy tenants and maintain high occupancy levels directly impacts rental income. Changes in tenant demand, property competitiveness, or local economic conditions can influence occupancy rates. Upon the expiration or early termination of leases, we may face difficulties in re-leasing spaces on terms as favorable as previous agreements. Lease terminations and defaults or terminations by significant tenants can reduce revenues, especially if suitable replacements are not found promptly. Concentration risk from large tenants or tenants in financially stressed sectors may further impact revenue reliability.

The economy continues to face several issues including inflation risk, high interest rates, and potentially worsening economic conditions, which presents risks for our business and our tenants. Rising interest rates can increase borrowing costs and affect property valuations, influencing investment decisions and profitability. Broader economic factors, including inflation and employment rates, can influence consumer spending and tenant performance.

Potential Impact of Tariffs and Trade Restrictions on Tenants and Our Business

Changes in international trade policies, including the imposition of tariffs, duties, import taxes, or other trade restrictions by the United States government or foreign governments, could adversely impact the operations of our retail tenants. Our tenants could source a substantial portion of their merchandise, raw materials, or manufacturing services from foreign countries. The imposition of new or increased tariffs on these goods, or retaliatory measures from trading partners, could increase costs for these tenants, potentially reducing their profitability and operational flexibility. Increased costs may not be fully passed on to consumers, which could lead to lower sales volumes, compressed margins, and in some cases, store closures or bankruptcy filings. If a significant number of our tenants experience financial distress or reduce their physical retail presence, this could negatively affect our occupancy rates, rental income, and cash flows.

Results of Operations

Three months ended September 30, 2025

Revenues

Revenues for the three months ended September 30, 2025 and 2024 are as follows:

(unaudited)

(unaudited)

Total revenue was $2,786,241 for the three months ended September 30, 2025, an increase of $449,316 from the three months ended September 30, 2024. Our company experienced increased retail center property revenues due to leasing activity in our Franklin Square, Salisbury Marketplace and Ashley Plaza properties, which were offset by decreased revenues from continuing vacancies in the Lancer Center Property, increased STNL property revenues resulting from the acquisition of the Buffalo Wild Wings Property, the United Rentals Property and the Tesla Pensacola Property, and increased flex center property revenues due to lease-up of the vacancy in our Brookfield Property, and strong occupancies in our Greenbrier Business Center and Parkway Center Properties.

Adjusted Net Operating Income

We establish operating segments at the property level and aggregates individual properties into reportable segments based on product types in which we have investments. During the three and nine months ended September 30, 2025 and 2024, our reportable segments consisted of retail center properties, flex center properties and STNL properties. We base our evaluation of our results of operations on the net operating income adjusted for interest expense of each reportable segment and, in some cases, of each property.

Net operating income (“NOI”) is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP. NOI is calculated by deducting operating expenses from operating revenues. NOI reflects occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs.

NOI adjusted for interest expense (“Adjusted Net Operating Income”), also a non-GAAP financial measure, is calculated by deducting operating expenses and interest expense from investment property rental revenues. Operating revenues include rental income, tenant reimbursements, other property income and non-cash revenues such as straight line rent and amortization of above and below market leases. Operating expenses include retail center property, flex center property and single tenant net lease property operating costs. Interest expense includes mortgage interest expense, only, and excludes non-mortgage interest expense and non-cash interest expense such as amortization of loan issuance costs.

Because Adjusted Net Operating Income only consists of revenues, operating expenses, and interest expense directly related to our real estate rental operations, management believes that the use of Adjusted Net Operating Income to evaluate the financial performance of its operating segments and individual investment properties is a useful tool that can assist in the comparison of the operating performance of our real estate assets between periods, or as compared to other companies and other investment opportunities we may consider from time to time. Management uses Adjusted Net Operating Income as a supplemental measure to evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance.

Adjusted Net Operating Income is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP. Please see below for the reconciliation of revenue and Adjusted Net Operating Income for each property.

Retail Center Property Revenues and Adjusted Net Operating Income

The following tables present property revenues, operating expenses and interest expense for our retail center properties for the three months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

51

Retail center property revenues were $1,567,428 for the three months ended September 30, 2025, a $1,532 increase from the three months ended September 30, 2024. Increased revenues from the Franklin Square, which is fully occupied as of September 30, 2025, the Ashley Plaza Property which is 99.0% leased as of September 30, 2025 and the Salisbury Marketplace Property from increased tenant CAM reimbursements, were offset by decreased revenues from continued vacancies at the Lancer Center Property.

Adjusted Net Operating Income from retail center properties was $735,804 for the three months ended September 30, 2025. Adjusted Net Operating Income for the three months ended September 30, 2025 decreased by $81,925 from the three months ended September 30, 2024, due to increased operating expenses offsetting the increased revenues, discussed above.

Decreased Adjusted Net Operating Income from the Ashley Plaza Property was a result of increased retail center property expenses resulting from unplanned repairs, slightly offset by increased revenues and lower interest expense due to loan principal amortization. Increased Adjusted Net Operating Income from the Franklin Square Property resulted from increased rent revenues due to full occupancy and slightly decreased interest expense, offset by an increase in operating expenses. Decreased Adjusted Net Operating Income from the Lancer Center Property was a result of reduced revenues due to continued vacancies and increased operating expenses. Slightly increased Adjusted Net Operating Income from the Salisbury Marketplace Property resulted from increased tenant CAM reimbursement revenues, offset by increased retail center operating expenses.

Flex Center Property Revenues and Adjusted Net Operating Income

The following tables present property operating revenues, operating expenses and interest expense for our flex center properties for the three months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

52

Flex center property revenues were $710,885 for the three months ended September 30, 2025, an increase of $34,131 from the three months ended September 30, 2024. Increased revenues were experienced at all our company’s flex center properties due to strong leasing activity and low vacancy.

Adjusted Net Operating Income from our flex center properties was $378,310 for the three months ended September 30, 2025. Adjusted Net Operating Income for the three months ended September 30, 2025 increased by $29,875 from the three months ended September 30, 2024 due to increased flex center property revenues, and lower interest expense, slightly offset by increased flex center operating expenses.

Increased Adjusted Net Operating Income from the Greenbrier Business Center resulted from increased flex center property revenues due to strong leasing and renewal activity, offset by increased flex center property operating expenses. Increased Adjusted Net Operating Income from the Brookfield Property resulted from increased flex center property revenues due to a new lease for a previously vacant space, offset by increased flex center operating expenses. Increased Adjusted Net Operating Income from the Parkway Property resulted from increased flex center property revenues from contractual rent escalations and new leases and decreased operating expenses.

STNL Property Revenues and Adjusted Net Operating Income

The following tables present property operating revenues, operating expenses and interest expense for our STNL center properties for the three months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

53

STNL property revenues were $507,928 for the three months ended September 30, 2025, a $413,653 increase from the three months ended September 30, 2024. Adjusted Net Operating Income from STNL properties was $166,791 for the three months ended September 30, 2025, an increase of $80,704 over the three months ended September 30, 2024. STNL property revenues and Adjusted Net Operating Income increased due to the acquisition of the Buffalo Wild Wings Property, the United Rentals Property, but were slightly offset by Adjusted Net Operating Loss from the acquisition of the Tesla Pensacola Property.

Operating Expenses

The following table presents our operating expenses for the three months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

Total operating expenses were $2,344,725 for the three months ended September 30, 2025. Total expenses for the three months ended September 30, 2025 increased by $311,072 over the three months ended September 30, 2024, primarily due to increased legal, accounting and other professional fees, corporate general and administrative expenses, and impairment of assets held for sale, offset by decreased bad debt expense and decreased depreciation and amortization expense due to the sale of the Hanover Square Property and the transfer of the Salisbury Marketplace Property and Greenbrier Business Center Property to assets held for sale, at which time our company ceased depreciating these asset groups.

Operating Income

Operating income for the three months ended September 30, 2025 was $441,516, an increase of $138,244 from the operating income of $303,272 for the three months ended September 30, 2024. This increase was primarily a result of increased net operating income from our flex property and STNL property operating segments, offset by decreased net operating income from our retail property operating segment, decreased bad debt expense and depreciation and amortization expense, offset by increased legal, accounting and other professional fees, corporate general and administrative expenses, and loss on impairment of assets held for sale.

Interest Expense

Interest expense was $768,816 and $730,922 for the three months ended September 30, 2025 and 2024, respectively, as follows:

(unaudited)

(unaudited)

Total interest expense for the three months ended September 30, 2025 increased by $37,894 over the three months ended September 30, 2024. This increase was primarily a result of new interest expense from the Farmers Line of Credit, offset by decreased interest expense from the redemption of the mandatorily redeemable preferred stock. Other interest expense, above, includes (i) other interest, (ii) preferred dividends on mandatorily redeemable preferred stock and (iii) non-cash amortization of discounts and capitalized issuance costs related to the mandatorily redeemable preferred stock. See Note 5 of the accompanying notes to the unaudited condensed consolidated financial statements.

Other Income

During the three months ended September 30, 2025, other income was $180,283, which consisted of $172,931 in insurance proceeds for property damage at our Franklin Square Property, $3,734 in unrealized gain on crypto assets and $3,628 in interest income. This is an increase of $165,459 from other income of $14,824 for the three months ended September 30, 2024, which consisted of interest income.

Other Expense

During the three months ended September 30, 2025, other expense was $19,721 related to the fair value change of the interest rate cap. This is a decrease of $85,402 from other expense of $105,123 for the three months ended September 30, 2024, which also consisted of the fair value change of the interest rate cap.

Net (Loss) Income

Net loss was $166,738 for the three months ended September 30, 2025, before adjustments for net income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $395,948.

Net loss for the three months ended September 30, 2025 decreased by $351,211 over the three months ended September 30, 2024, before adjustments for net (loss) income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders for the three months ended September 30, 2025 decreased by $131,048 over the three months ended September 30, 2024.

Nine months ended September 30, 2025

Revenues

Revenues for the nine months ended September 30, 2025 and 2024 are as follows:

(unaudited)

(unaudited)

Total revenue was $7,573,054 for the nine months ended September 30, 2025, an increase of $363,334 from the nine months ended September 30, 2024. Decreases in retail center property revenues from the sale of the Hanover Square Shopping Center and increased vacancies in the Lancer Center Property, were offset by increases in flex center property revenues from the Parkway and Greenbrier Business Center properties, and STNL property revenues resulting from the acquisition of the Buffalo Wild Wings Property, the United Rentals Property and the Tesla Pensacola Property.

Adjusted Net Operating Income

See above for a detailed description of Adjusted Net Operating Income, which is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP.

Please see below for the reconciliation of revenue and Adjusted Net Operating Income for each property.

Retail Center Property Revenues and Adjusted Net Operating Income

The following tables present property revenues, operating expenses and interest expense for our retail center properties for the nine months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

Retail center property revenues were $4,673,820 for the nine months ended September 30, 2025, a $281,485 decrease from the nine months ended September 30, 2024, primarily due to decreased revenues resulting from the sale of the Hanover Square Shopping Center Property and continuing vacancies in the Lancer Center Property. These decreased revenues were offset by increased revenues from the Franklin Square Property, which resulted from full occupancy, and the Salisbury Marketplace Property due to new leasing activity.

Adjusted Net Operating Income from retail center properties was $2,276,999 for the nine months ended September 30, 2025. Adjusted Net Operating Income for the nine months ended September 30, 2025 decreased by $236,660 from the nine months ended September 30, 2024, due to the sale of the Hanover Square Property, decreased Adjusted Net Operating Income from the Ashley Plaza

Property, the Salisbury Marketplace Property and the Lancer Center Property, which decreases were slightly offset by increased Adjusted Net Operating Income from the Franklin Square Property.

Decreased Adjusted Net Operating Income from the Lancer Center Property resulted from a decline in retail center property revenues due to a continuing vacancy and an increase in operating expenses. Decreased Adjusted Net Operating Income from the Ashley Plaza and Salisbury Marketplace properties were primarily a result of increased operating expenses. These decreases in Adjusted Net Operating Income were slightly offset by an increase in Adjusted Net Operating Income from the Franklin Square Property due to increased retail center property revenues from new leases and contractual rent escalations and a decrease in operating expenses.

Flex Center Property Revenues and Adjusted Net Operating Income

The following tables present property operating revenues, operating expenses and interest expense for our flex center properties for the nine months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

Flex center property revenues were $2,053,868 for the nine months ended September 30, 2025, an increase of $45,812 from the nine months ended September 30, 2024. Increased revenues at the Greenbrier Business Center Property and Parkway Property from increased occupancy were partially offset by decreased revenues from the Brookfield Property due to a vacancy.

Adjusted Net Operating Income from our flex center properties was $1,013,903 for the nine months ended September 30, 2025. Adjusted Net Operating Income for the nine months ended September 30, 2025 decreased by $7,110 from the nine months ended September 30, 2024 due to decreased Adjusted Net Operating Income from the Brookfield Property and Parkway Property, slightly offset by increased Adjusted Net Operating Income from the Greenbrier Business Center Property.

Decreased Adjusted Net Operating Income from the Brookfield Property resulted from decreased flex center property revenues due to a continuing vacancy and slightly increased operating expenses. Decreased Adjusted Net Operating Income from the Parkway Property resulted from increased operating expenses, offset by increased flex center property revenues from contractual rent escalations and new leases. These decreases in Adjusted Net Operating Income were slightly offset by increased Adjusted Net Operating Income form the Greenbrier Business Center Property resulting from by increased flex center property revenues from contractual rent escalations and new leases.

STNL Property Revenues and Adjusted Net Operating Income

The following tables present property operating revenues, operating expenses and interest expense for our STNL center properties for the nine months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

STNL property revenues were $845,366 for the nine months ended September 30, 2025, a $599,007 increase from the nine months ended September 30, 2024. Adjusted Net Operating Income from STNL properties was $473,620 for the nine months ended September 30, 2025, an increase of $250,958 from the nine months ended September 30, 2024. Adjusted Net Operating Income increased due to the acquisition of the Buffalo Wild Wings Property, the United Rentals Property, offset by Adjusted Net Operating Loss from the Tesla Pensacola Property, and owning the Citibank Property for the full nine months ended September 30, 2025.

Operating Expenses

The following table presents our operating expenses for the nine months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

Total operating expenses were $7,468,322 for the nine months ended September 30, 2025. Total expenses for the nine months ended September 30, 2025, increased by $774,744 over the nine months ended September 30, 2024, primarily due to increased share based compensation, legal, accounting and other professional fees, corporate general and administrative expenses, loss on impairment, and impairment of assets held for sale, slightly offset by decreased bad debt expense, decreased depreciation and amortization expenses due to the sale of the Hanover Square Property and the transfer of the Salisbury Marketplace Property and Greenbrier Business Center Property to assets held for sale, at which time our company ceased depreciating these asset groups.

Operating Income

Operating income for the nine months ended September 30, 2025 was $68,291, a decrease of $3,215,516 from the operating income of $3,283,807 for the nine months ended September 30, 2024. This decrease was primarily a result of the gain on the sale of the Hanover Square Property of $2,819,502 during the nine months ended September 30, 2024, but increased share based compensation, loss on impairment, legal, accounting and other professional fees, and corporate general and administrative expenses, also contributed to the decrease.

Interest Expense

Interest expense was $1,900,672 and $2,331,030 for the nine months ended September 30, 2025 and 2024, respectively, as follows:

(unaudited)

(unaudited)

Total interest expense for the nine months ended September 30, 2025 decreased by $430,358 from the nine months ended September 30, 2024. This decrease was primarily a result of decreased interest from the sale of the Hanover Square Shopping Center Property and the redemption of the mandatorily redeemable preferred stock, offset by new interest expense from the Farmers Line of Credit. Other interest expense, above, includes (i) other interest, (ii) preferred dividends on mandatorily redeemable preferred stock and (iii) non-cash amortization of discounts and capitalized issuance costs related to the mandatorily redeemable preferred stock. See Note 5 of the accompanying notes to the unaudited condensed consolidated financial statements.

Other Income

During the nine months ended September 30, 2025, other income was $314,318, which consisted of $118,529 in lease termination fees, $172,931 in insurance proceeds for property damage at our Franklin Square Property, $3,733 in unrealized gain on crypto assets, and $19,135 in interest income. This is an increase of $273,832 from other income of $40,486 for the nine months ended September 30, 2024, which consisted solely of interest income.

Other Expense

During the nine months ended September 30, 2025, other expense was $68,937 related to the fair value change of the interest rate cap. This is a decrease of $8,048 from other expense of $76,985 for the nine months ended September 30, 2024, which was related to the fair value change of the interest rate cap.

Net (Loss) Income

Net loss was $1,587,000 for the nine months ended September 30, 2025, before adjustments for net loss attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $1,921,433.

Net income for the nine months ended September 30, 2025 decreased by $2,503,278 from the nine months ended September 30, 2024, before adjustments for net (loss) income attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net income attributable to our common stockholders for the nine months ended September 30, 2025 decreased by $2,230,133 over the nine months ended September 30, 2024.

Other Non-GAAP Measures

Funds from Operations and Adjusted Funds from Operations

We use funds from operations (“FFO”), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in its December 2018 White Paper (the “NAREIT White Paper”). As defined in the NAREIT White Paper, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs and above and below market leases) and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.

The NAREIT White Paper states, “FFO of a REIT includes the FFO of all consolidated properties, including consolidated, partially owned affiliates”. Additionally, since the adjustments to GAAP net income, such as depreciation and amortization, used in the reconciliation of net income (loss) to determine FFO are not allocated between common stockholders and noncontrolling interests (i.e. 100% of depreciation and amortization are “added back” without reduction to reflect the noncontrolling owners’ interest in such items), we believe that the appropriate starting point for the calculation is the net (loss) income before allocation to noncontrolling interests. This allows us to use FFO as a tool to measure the overall performance of its investment properties, as a whole, not just the portion of the investment properties controlled by our common stockholders.

The following table reconciles our calculations of FFO, which is a non-GAAP measurement, to net (loss) income, the most directly comparable GAAP financial measure, for the nine months ended September 30, 2025 and 2024:

(unaudited)

(unaudited)

(1) Depreciation expense for buildings and site improvements.

(2) Depreciation of tenant improvements, including those (i) acquired as part of the purchase of the retail center, flex center and STNL properties and (ii) those we constructed for the retail center properties and flex center properties subsequent to their acquisition.

(3) Depreciation of tenant improvements recorded as lease incentives.

(4) Amortization of leasing commissions paid for the retail center properties and flex center properties subsequent to the acquisition of the properties.

(5) Amortization of intangible assets acquired as part of the purchase of the retail center properties, flex center properties and STNL properties, including leasing commissions, leases in place and legal and marketing costs.

(6) As defined in the NAREIT White Paper, FFO specifically excludes gains and losses from the sale of certain real estate assets.

(7) The NAREIT White Paper provides guidance for the treatment of impairment write-downs. Specifically, “To the extent there is an impairment write-down of depreciable real estate … related to a REIT’s main business, the write-down is excluded from

FFO (i.e., adjusted from net income in calculating FFO).” Additionally, the NAREIT White Paper provides guidance on gains or losses on the sale of assets, stating “the REIT has the option to include or exclude such gains and losses in the calculation of FFO.”

(8) The NAREIT White Paper provides guidance for the treatment of impairment write-downs. Specifically, “To the extent there is an impairment write-down of depreciable real estate … related to a REIT’s main business, the write-down is excluded from FFO (i.e., adjusted from net income in calculating FFO).” Additionally, the NAREIT White Paper provides guidance on gains or losses on the sale of assets, stating “the REIT has the option to include or exclude such gains and losses in the calculation of FFO.”

(9) Consistent with the treatment of impairment write-downs, we include an adjustment for our gain on extinguishment of lease liability, loss on extinguishment of debt, and loss on redemption of mandatorily redeemable preferred stock.

The NAREIT White Paper encourages companies reporting FFO to “make supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period.” We believe that the computation of FFO in accordance with the NAREIT White Paper’s definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include non-cash items such as amortization of loans and above and below market leases, unbilled rent arising from applying straight line rent revenue recognition and share-based compensation expenses. Additionally, the impact of capital expenditures, including tenant improvement and leasing commissions, net of reimbursements of such expenditures by property escrow funds, is included in our calculation of AFFO. Therefore, in addition to FFO, management uses Adjusted FFO (“AFFO”), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as their exclusion is not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.

Total AFFO for the nine months ended September 30, 2025 and 2024 was as follows:

(unaudited)

(unaudited)

(1) Adjustment to FFO resulting from non-cash amortization of intangible assets.

(2) Adjustment to FFO resulting from non-cash amortization of intangible liabilities.

(3) Adjustment to FFO resulting from non-cash revenues recognized as a result of applying straight line revenue recognition for the retail center properties and flex center properties.

(4) Adjustment to FFO for capital expenditures, including capitalized leasing commissions, tenant improvements, and building and site improvements. See Investing Activities, above, for detail of capital expenditures.

(5) Adjustment to FFO resulting from non-cash expenses recognized as a result of decreases in the fair value of the interest rate caps for the Parkway Property.

(6) Adjustment to FFO resulting from non-cash revenues recognized as a result of increases in the fair value of crypto assets.

(7) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing loan issuance costs over the terms of the respective mortgages.

(8) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing the mandatorily redeemable preferred stock discount and offering costs over the mandatorily redeemable preferred stock’s five-year term.

(9) Adjustment to FFO resulting from non-cash expenses recorded for share-based compensation.

(10) The NAREIT White Paper provides guidance on non-cash revenues and expenses, stating, “To provide an opportunity for consistent analysis of operating results among REITs, the NAREIT White Paper encourages those reporting FFO to make supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period. We have elected to include non-cash expenses (bad debt expense) in our calculation of AFFO.

We have omitted a discussion of quantitative and qualitative disclosures about market risk because, as a smaller reporting company, we are not required to provide such information.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the rules and regulations of the SEC and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures as of September 30, 2025, the end of the period covered by this Quarterly Report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded, as of September 30, 2025, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow for timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Our management, including our Chief Executive Officer, evaluated, as of September 30, 2025, the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on that evaluation, our Chief Executive Officer concluded that our internal control over financial reporting, as of September 30, 2025, was effective.

This Quarterly Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Quarterly Report.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth below, there have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025. The following risk factor represents a material change from the risk factors described in that Form 10-K and should be read in conjunction with the other risk factors disclosed therein.

We are seeking to maximize shareholder value by exploring strategic alternatives. There can be no assurance that we will be successful in executing a strategic transaction.

We are actively considering strategic alternatives in an effort to unlock and maximize stockholder value. We may not be able to identify or consummate a suitable transaction and do not currently have any commitments relating to any transactions. We may not be able to successfully implement a strategic transaction we pursue, and even if we determine to pursue one or more strategic transactions, we may be unable to do so on acceptable financial terms and any such transaction may not improve the market price of our common stock. Pursuing a strategic opportunity is subject to risks, including those outlined herein, and if we are unsuccessful in consummating a strategic transaction, our business could be materially adversely affected.