Power REIT: Form 10-Q for the period ended Jun 30, 2026

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed on March 31, 2026 (the “2025 10-K”) with the U.S. Securities and Exchange Commission (the “SEC”). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under Part 1, Item 1A of the 2025 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. References in this Quarterly Report on Form 10-Q to the “Registrant” or the “Trust” refer to Power REIT and “we,” “us,” “our” and “Power REIT” refer to Power REIT, together with its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “believe,” “expect,” “will,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “assume” or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words. All statements contained in this Report regarding our future strategy, future operations, projected financial position, estimated future revenues, projected costs, future prospects, the future of our industries and results that might be obtained by pursuing management’s current or future plans and objectives are forward-looking statements.

You should not place undue reliance on any forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control, including those identified below, under Part II, Item 1A. “Risk Factors” and elsewhere in this Report, and those identified under Part I, Item 1A of the 2025 10-K. Our forward-looking statements are based on the information currently available to us and speak only as of the date of the filing of this Report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these matters or how they may affect us. Over time, our actual results, performance, financial condition or achievements may differ from the anticipated results, performance, financial condition or achievements that are expressed or implied by our forward-looking statements, and such differences may be significant and materially adverse to our security holders. Our forward-looking statements contained herein speak only as of the date hereof, and we make no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations.

Overview

We are a Maryland-domiciled, internally-managed real estate investment trust (a “REIT”) that owns a portfolio of real estate assets related to transportation, energy infrastructure and Controlled Environment Agriculture (“CEA”) in the United States.

We are structured as a holding company and own our assets through seventeen 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 June 30, 2026, our assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by our subsidiary Pittsburgh & West Virginia Railroad (“P&WV”), approximately 447 acres of fee simple land leased to a utility scale solar power generating project with an aggregate generating capacity of approximately 82 Megawatts (“MW”) and approximately 68 acres of land with approximately 290,000 square feet of CEA properties in the form of greenhouses (the “Greenhouse Portfolio”).

During the six months ended June 30, 2026, the Trust did not declare a dividend of approximately $326,000 ($0.484375 per share per quarter) to holders of Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”).

Our primary objective is to maximize the long-term value for our shareholders. To that end, our business goals are to obtain the best possible rental income at our properties in order to maximize our cash flows, net operating income, funds from operations, funds available for distribution to shareholders and other operating measures and results, and ultimately to maximize the values of our properties.

To achieve this primary goal, we have developed a business strategy focused on increasing the values of our properties, and ultimately of the Trust, which includes:

• Raising capital by monetizing the embedded value in our portfolio to improve our liquidity position and, as appropriate reducing debt levels to strengthen our balance sheet;
• Selling off non-core properties and underperforming assets;
• Seeking to re-lease properties that are vacant or have non-performing tenants
• Seeking to minimize the carrying costs related to the Greenhouse Portfolio given the speculative nature of valuing these assets;
• Raising the overall level of quality of our portfolio and of individual properties in our portfolio;
• Improving the operating results of our properties; and
• Taking steps to position ourselves for future growth opportunities.

Recent Events

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), the Common Stock began trading on a split-adjusted basis and has been assigned 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.

Improving Our Balance Sheet by Reducing Debt and Leverage; Maintaining Liquidity

Leverage

We continue to seek ways to reduce our debt and debt leverage by improving our operating performance and through a variety of other means available to us. These means might include leasing vacant properties, selling properties, raising capital or through other actions.

Capital Recycling

In the later part of 2022, we commenced property reviews to establish a plan for the portfolio and, where appropriate, have been disposing of and seeking to dispose of properties that we do not believe meet financial and strategic criteria given economic, market and other circumstances. Disposing of these properties can enable us to redeploy or recycle our capital to other uses, such as to repay debt, to reinvest in other real estate assets and development and redevelopment projects, and for other corporate purposes. Along these lines, in 2023 and 2024 we completed sales of assets for total gross proceeds of approximately $9.81 million which included approximately $2.1 million of seller financing provided to the buyers. During 2025, we completed sales of assets for total gross proceeds of approximately $325,000 which included approximately $105,000 of seller financing provided to a buyer and in 2026, we sold two properties for net proceeds of approximately $269,000. We also have several properties that we are marketing for sale and/or lease which have been classified as “Assets Held for Sale.”

Improving Our Portfolio

We are currently seeking to refine our property holdings by selling greenhouse properties and/or re-leasing them in an effort to improve the overall performance going forward. Effective April 11, 2025, we closed on a settlement agreement with the lender for the Greenhouse Loan, which resulted in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan. The transaction also relieved the ongoing costs associated with maintaining the Nebraska and Michigan properties. We will continue to seek to realize value from the retained assets. This will include entering into new leases and selling properties based on market conditions. We will also continue to focus on improving cash collections from existing tenants. In addition, we are exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

Taking Steps to Position the Company for Future Growth Opportunities

We are taking steps designed to position ourselves to create shareholder value. In connection therewith, we have implemented processes designed to ensure strong internal discipline in the use, harvesting and recycling of our capital, and these processes will be applied in connection with seeking to reposition properties.

We may seek to acquire, in an opportunistic, selective and disciplined manner, properties that have operating metrics that are better than or equal to our existing portfolio averages, and that we believe have strong potential for increased cash flows and appreciation in value. Taking advantage of any acquisition opportunities would likely involve some use of debt or equity capital. We will pursue transactions that we expect can meet the financial and strategic criteria we apply, given economic, market and other circumstances. In addition, we are exploring the potential to use our existing corporate structure for strategic transactions including potentially merging assets or companies with us. The Trust is also exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

The following table is a summary of our properties as of June 30, 2026:

1 Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet

2 Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs

3Property is vacant

4Tenant is not current on rent/in default

5An impairment has been taken against this asset

6Asset held for sale

Critical Accounting Estimates

The consolidated financial statements are prepared in conformity with accounting principles and generally accepted in the United States of America (“GAAP”), which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results may differ from the original estimates, requiring adjustments to these balances in future periods. None of the estimates are considered critical accounting estimates.

Results of Operations

Three Months Ended June 30, 2026 and 2025

Income

Income during the three months ended June 30, 2026 and 2025 was $1,289,751 and $506,783, respectively. Income during the three months ended June 30, 2026, consisted of rental income of $222,279, direct financing lease income of $228,750, and other income of $838,722. The increase in total income was due to an increase in other income of $796,828 which is mainly due to settlement of the PW SD mortgage loan offset with a decrease in rental income of $13,860.

During the three months ended June 30, 2026, the Trust’s income was concentrated from certain tenants. For the three months ended June 30, 2026, Power REIT collected approximately 95% of its rental income and lease income from direct financing lease from the tenants of two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 51% and 44% of rental income and lease income from direct financing lease, respectively. For the three months ended June 30, 2025, Power REIT collected approximately 92% 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 49% and 43% of rental income and lease income from direct financing lease, respectively.

Expenses

Expenses for the three months ended June 30, 2026 compared to the same period in 2025 decreased by $511,934 to $742,165, primarily due to a decrease in interest expense of $331,959 due to the settlement of the Greenhouse Loan and a decrease in property expenses and taxes of $170,547, a decrease of general and administrative expense of $100,686 and to a lesser extent, a decrease in depreciation expense of $13,906, offset by an increase in impairment expense of $105,164.

Our non-property related expenses, are for general and administrative expenses, which consist principally of insurance, legal and other professional fees, consultant fees, NYSE American listing fees, shareholder service company fees and auditing costs as well as property related expenses that are not covered by tenants.

Other Income/(Expense)

Other income/(expense) decreased by $1,180,267 primarily due to a loss on sale of properties of $102,845, a decrease of extinguishment of debt of $1,092,670 and partially offset by a $15,248 decrease in unrealized loss on marketable securities.

Six Months Ended June 30, 2026 and 2025

Income

Income during the six months ended June 30, 2026 and 2025 was $1,770,187 and $992,577, respectively. Income during the six months ended June 30, 2026, consisted of rental income of $437,958, direct financing lease income of $457,500, and other income of $874,729. The increase in total income was due to an increase in other income of $786,570 which is mainly due to settlement of the PW SD mortgage loan offset with a decrease in rental income of $8,960.

During the six months ended June 30, 2026, the Trust’s income was concentrated from certain tenants. For the six months ended June 30, 2026, Power REIT collected approximately 96% of its rental income and lease income from direct financing lease from the tenants of two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 51% and 45% of rental income and lease income from direct financing lease, respectively. For the six months ended June 30, 2025, Power REIT collected approximately 95% 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 51% and 44% of rental income and lease income from direct financing lease, respectively.

Expenses

Expenses for the six months ended June 30, 2026 compared to the same period in 2025 decreased by $1,536,329 to $1,587,606, primarily due to a decrease in interest expense of $1,089,018 due to the settlement of the Greenhouse Loan and a decrease in property expenses and taxes of $572,533, a decrease in general and administrative expense of $221,553 and to a lesser extent, a decrease in depreciation expense of $5,742, offset by an increase in impairment expense of $352,517.

Our non-property related expenses, are for general and administrative expenses, which consist principally of insurance, legal and other professional fees, consultant fees, NYSE American listing fees, shareholder service company fees and auditing costs as well as property related expenses that are not covered by tenants.

Other Income/(Expense)

Other income/(expense) decreased by $1,679,464 primarily due to an increase on loss on sale of properties of $596,735, a decrease in gain on extinguishment of debt of $1,092,670 and by a decrease in unrealized loss on marketable securities of $9.941.

Net Loss Attributable to Common Shareholders

Net loss attributable to common shareholders during the six months ended June 30, 2026 was $784,138 compared to a net loss of $1,418,613 for the six months ended June 30, 2025, a decrease of $634,475.

Liquidity and Capital Resources

Our cash, cash equivalents totaled $3,147,494 as of June 30, 2026, an increase of $912,188 from December 31, 2025. Our current loan liabilities totaled approximately $781,000 as of June 30, 2026 as compared to approximately $760,000 as of December 31, 2025.

Effective April 11, 2025, we entered into a settlement agreement with the lender under the Greenhouse Loan that resulted in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan. The transaction also relieves the ongoing costs associated with maintaining the Nebraska and Michigan properties.

We are 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 $1,325,000. If the property taxes remain delinquent, the remaining Greenhouse Portfolio will be subject to tax foreclosure.

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 June 30, 2026, 282,613 common shares (on a pre-reverse stock split basis) had been sold pursuant to the Sales Agreement. During the six months ended June 30, 2026, prior to the Trust’s 1-for-10 reverse stock split effective June 2, 2026, the Trust sold 10,781 common shares (on a pre-reverse stock split basis) pursuant to the Sales Agreement for net proceeds of $10,945.

During the six months ended June 30, 2026, we generated approximately $904,000 of cash from debt service related to the seller financing provided in 2024 and 2025. The remaining seller financing agreements have a combined remaining balance of $923,547 as of June 30, 2026.

We will continue to seek to maximize value from the retained assets. This will include entering into new leases and selling properties based on market conditions. We will also continue to focus on improving cash collections from existing tenants. In addition, we are exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

Cash Used in Operating Activities

During the six months ended June 30, 2026 and 2025, cash provided by (used in) operating activities was $911,090 and $(677,137), respectively. The improvement in operating cash flows was primarily attributable to a lower net loss and favorable changes in working capital, including changes in prepaid expenses, other assets, accounts payable and accrued expenses. Operating cash flows were also affected by non-cash items, including impairment expense, the loss on sale of property, depreciation and amortization, unrealized loss on marketable securities, and, in the prior-year period, the gain on extinguishment of debt.

Our cash outlays at Power REIT (parent company) consist principally of professional fees, consultant fees, NYSE American listing fees, legal, insurance, shareholder service company fees, auditing costs and general and administrative expenses. Our cash outlays related to our various property-owning subsidiaries consist principally of principal and interest expense on debts, property maintenance, property taxes, insurance, legal as well as other property related expenses that are not covered by tenants. To the extent we need to raise additional capital to meet our obligations, there can be no assurance that financing on favorable terms will be available when needed. Although we entered into the Sales Agreement the rules of the SEC and NYSE American place limits on the number and dollar amount of securities that may be sold. There can be no assurances that we will be able to raise the funds needed. If we are unable to sell certain assets when anticipated at prices anticipated, we may not have sufficient cash to fund operations and commitments beyond the next twelve months.

Cash Provided By Investing Activities

Cash provided by investing activities during the six months ended June 30, 2026 and 2025 was $328,480 and $9,822, respectively. The increase of $318,658 was primarily attributable to higher proceeds from the sale of properties and increased collections on mortgage loan receivable.

Cash Used/Provided By Financing Activities

Cash used in financing activities during the six months ended June 30, 2026 was $327,382, compared to cash used in financing activities of $82,922 during the same period in 2025. The increase in cash used of $244,460 was primarily due to the absence of proceeds from debt financing received in the prior-year period and lower proceeds from financing activities, partially offset by lower principal payments on debt and proceeds received from the issuance of common shares pursuant to the Sales Agreement during the six months ended June 30, 2026.

FUNDS FROM OPERATIONS – NON-GAAP FINANCIAL MEASURES

We assess and measure our overall operating results based upon an industry performance measure referred to as Core Funds From Operations (“Core FFO”) which our management believes to be a useful indicator of our operating performance. Core FFO is a non-GAAP financial measure. Core FFO should not be construed as a substitute for net income (loss) (as determined in accordance with GAAP) for the purpose of analyzing our operating performance or financial position, as Core FFO is not defined by GAAP. The following is a definition of this measure, an explanation as to why we present it and, at the end of this section, a reconciliation of Core FFO to the most directly comparable GAAP financial measure.

Our management believes that alternative measures of performance, such as net income computed under GAAP, or Funds From Operations computed in accordance with the definition used by the National Association of Real Estate Investment Trusts (“NAREIT”), include certain items that are not indicative of the results provided by our asset portfolio and inappropriately affect the comparability of our period-over-period performance. These items include certain non-cash expenses, including stock-based compensation, amortization of intangible lease assets, amortization of debt costs, and depreciation on land improvements, as well as impairment charges and gains or losses on sale of property. Therefore, management uses Core FFO and defines it as net income excluding such items.

A reconciliation of our Core FFO to net income for the six months ended June 30, 2026 and 2025 is included in the table below:

CORE FUNDS FROM OPERATIONS (FFO)

(Unaudited)

*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.

During the six months ended June 30, 2026, the Trust did not declare a dividend of approximately $326,000 to holders of Power REIT’s Series A Preferred Stock in order to preserve liquidity. As of August 7, 2026, the amount of unpaid dividends on the outstanding shares of Series A Preferred Stock is approximately $2,448,000.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a–15(b) under the Exchange Act, the Trust’s management including the Trust’s Board of Directors, with the participation of our principal executive officer who is also our principal financial officer, carried out an evaluation of the effectiveness of the Trust’s disclosure controls and procedures (as defined under Rule 13a–15(e) under the Exchange Act) as of the end of the period covered by this Report. Based upon that evaluation, the Trust’s management concluded that, as of June 30, 2026, the Trust’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Trust in the reports that the Trust files or submits under the Exchange Act, is recorded, processed, summarized and reported to the Trust’s management, within the time periods specified in the SEC’s rules and forms, due to a material weakness in our controls relating to accounting for complex transactions identified in the quarterly period ended June 30, 2024, which has not been remediated as of June 30, 2026. Specifically, our Series A Preferred Stock was historically classified as mezzanine equity instead of being classified as equity.

Remediation Plan

To address the material weakness described above, we intend to engage outside consultants to enhance our analysis of, and aid in our accounting for, complex transactions as needed.

Limitations on the Effectiveness of Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Trust have been detected. The design and operation of a control system must also reflect that there are resource constraints and management is necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls.

Changes in Internal Control over Financial Reporting

Other than as set forth above, there were no changes in our internal controls over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our results of operations and financial condition are subject to numerous risks and uncertainties as described in the 2025 10-K, which risk factors are incorporated herein by reference. The following information updates, and should be read in conjunction with, the information disclosed in Part I, Item 1A, “Risk Factors,” contained in the 2025 10-K. You should carefully consider the risks set forth in the 2025 10-K and the following risks, together with all the other information in this Report, including our consolidated financial statements and notes thereto. If any of the risks actually materialize, our operating results, financial condition and liquidity could be materially adversely affected. Except as disclosed below, there have been no material changes from the risk factors disclosed in the 2025 10-K.

We have incurred a loss for the six months ended June 30, 2026 and may be unable to generate sufficient income to cover expenses or generate net income.

For the six months ended June 30, 2026, we had a net loss attributable to common shareholders of approximately $784,000, compared to a net loss of approximately $1.4 million for the six months ended June 30, 2025. There can be no assurance that we will be able to generate sufficient income to pay our expenses or generate net income. As of June 30, 2026, we had an accumulated deficit of approximately $52.3 million. On a consolidated basis, the Trust’s cash and cash equivalents totaled approximately $3.1 million as of June 30, 2026, an increase of approximately $912,000 from December 31, 2025.

We may need to raise additional capital or sell additional properties to fund our operations.

As of June 30, 2026, we had an accumulated deficit of approximately $52.3 million and a net loss attributable to common shareholders of approximately $784,000. As of June 30, 2026, the Trust had approximately $3.1 million of cash and cash equivalents and approximately $416,000 of accounts payable and approximately $1.5 million of liabilities for assets held for sale.

It is the Trust’s plan to focus on selling properties, entering into new leases, improving cash collections from existing tenants and the raising capital in the form of debt or equity is effectively implemented, the Trust’s plan could potentially provide enough liquidity to fund its operations. However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity, including its ability to sell properties, and the failure to do so could negatively impact its future operations.

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 June 30, 2026, 282,613 common shares (on a pre-reverse stock split basis) had been sold pursuant to the Sales Agreement. During the six months ended June 30, 2026, prior to the Trust’s 1-for-10 reverse stock split effective June 2, 2026, the Trust sold 10,781 common shares pursuant to the Sales Agreement for net proceeds of $10,945.

We have identified material weaknesses in our internal controls, and we cannot provide assurances that these material weaknesses will be effectively remediated or that additional weaknesses will not occur in the future.

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a- 15(f) under the Exchange Act. We identified a material weakness in our controls in the quarterly period ended June 30, 2024 relating to accounting for complex transactions, which has not been remediated as of June 30, 2026. Specifically, our Series A Preferred Stock was historically classified as mezzanine equity instead of being classified as equity.

While we have hired outside consultants to aid in our accounting for complex transactions and plan to take remedial action to address the material weakness in our internal controls, we cannot provide any assurance that such remedial measures, or any other remedial measures we take, will be effective. In addition, a material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operate effectively. Although management believes that the material weakness in our internal controls will be remediated, there can be no assurance that the deficiencies will be remediated in the near future or that the internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in our internal controls in the future.

As a result of our failure to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, security holders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud. Our failure to maintain an effective system of internal controls, and any failure by us to implement required new or improved internal controls or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. In addition, any testing by us, as and when required, conducted in connection with Section 404 of the Sarbanes-Oxley Act, or Section 404, or any subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. As a growing company, implementing and maintaining effective controls may require more resources, and we may encounter internal control integration difficulties. Our failure to maintain effective internal controls over financial reporting, may result in us not being able to accurately report our financial results, detect or prevent fraud, or file our periodic reports in a timely manner, which may, among other adverse consequences, cause investors to lose confidence in our reported financial information and lead to a decline in the trading price of our common shares.

The investment portfolio is, and in the future may continue to be, concentrated in its exposure to a relatively few numbers of investments, industries and lessees.

Historically, our revenue has been concentrated to a relatively limited number of investments, industries and lessees. During the six months ended June 30, 2026, we collected approximately 96% of its rental income and lease income from direct financing lease from two properties. The tenants were NSC and Regulus Solar, LLC which represent 51% and 45% of rental income and lease income from direct financing lease respectively.

We are exposed to risks inherent in this sort of investment concentration. Financial difficulty or poor business performance on the part of any single lessee or a default on any single lease will expose us to a greater risk of loss than would be the case if we were more diversified and holding numerous investments, and the underperformance or non-performance of any of its assets may severely adversely affect our financial condition and results from operations. Our lessees could seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of our lease agreements and could cause a reduction in our cash flows. Furthermore, we may continue to concentrate our investment activities in the CEA and cannabis sectors, which subjects us to more risks than if we were diversified across many sectors. At times, the performance of the CEA and infrastructure sectors may lag the performance of other sectors or the broader market as a whole.

If our acquisitions or our overall business performance fail to meet expectations, the amount of cash available to us to pay dividends may decrease and we could default on our loans, which are secured by collateral in our properties and assets.

We may not be able to achieve operating results that will allow us to pay dividends at a specific level or to increase the amount of these dividends from time to time. Also, restrictions and provisions in any credit facilities we enter into or any debt securities we issue may limit our ability to pay dividends. We cannot assure you that you will receive dividends at a particular time, or at a particular level, or at all.

Unfortunately, our tenants related to the Greenhouse Portfolio have failed to perform on their lease obligations which has created a significant liquidity issue related to this portfolio of assets. A portion of the properties included in the Greenhouse Portfolio secure the Greenhouse Loan which was non-recourse to us and the lender under the Greenhouse Loan has liens against such properties. On April 11, 2025, Power REIT resolved issues with its lender concerning the Greenhouse Loan by providing deeds-in-lieu of foreclosure for greenhouse properties in Michigan and Nebraska. In return, the lender released the remaining collateral back to subsidiaries of Power REIT and released obligations related to the Greenhouse Loan. Power REIT will continue to seek to realize value from these retained assets by leasing and/or selling.

PW Regulus Solar, LLC (“PWRS”), one of our subsidiaries, entered into a loan agreement (the “2015 PWRS Loan Agreement”) that is non-recourse to us and secured by all of PWRS’ interest in the land and intangibles. As of June 30, 2026, the balance under the 2015 PWRS Loan Agreement was approximately $5,795,000 (net of unamortized debt costs of approximately $179,000).

Pittsburgh & West Virginia Railroad (“PWV”), one of our subsidiaries, entered into a Loan Agreement in the amount of $15,500,000 that is non-recourse to Power REIT and secured by our equity interest in our subsidiary PWV which is pledged as collateral. The balance of the loan as of June 30, 2026 is $13,859,000 (net of approximately $253,000 of capitalized debt costs).

We have substantial debt and preferred shares outstanding with substantial liquidation preference, which could adversely affect our overall financial health and our operating flexibility.

We have substantial debt and preferred shares outstanding with substantial liquidation preference. These obligations may prevent us from using our cash flows for other purposes. If we are unable to satisfy these obligations, we might default on our debt and our financial condition and results of operations would be adversely affected.

In an effort to conserve liquidity and create financial flexibility, we have not declared dividends on our Series A Preferred Stock since the fourth quarter of 2022. As a result, unpaid dividends increase the liquidation preference for our Series A Preferred Stock. As of June 30, 2026, the amount of unpaid, undeclared dividends on the outstanding shares of Series A Preferred Stock is approximately $2,448,000.

Since a significant percentage of our assets are used to secure our debt, this reduces the amount of collateral available for future secured debt or credit support and reduces our flexibility in how we handle these secured assets. This level of debt and related security could also limit our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our business strategy or other purposes and could limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service debt.

In addition to our current debt, we might incur additional debt in the future in order to finance improvement or development of properties, acquisitions or for other general corporate purposes, which could exacerbate the risks described above. These consequences could have a material adverse effect on our business, financial condition and results of operations.

The issuance of securities with claims that are senior to those of our common shares, including our Series A Preferred Stock, may limit or prevent us from paying dividends on our common shares. There is no limitation on our ability to issue securities senior to our common shares or incur indebtedness.

Our common shares are equity interests that rank junior to our indebtedness and other non-equity claims with respect to assets available to satisfy claims against us, and junior to our preferred securities that by their terms rank senior to our common shares in our capital structure, including our Series A Preferred Stock. As of June 30, 2026, we had outstanding debt in the principal amount of $19.7 million and we have issued approximately $8.5 million (par value) of Series A Preferred Stock not including dividends which are cumulative and have not been declared. This debt and these preferred securities rank senior to our common shares in our capital structure. We expect that in due course we may incur more debt, and issue additional preferred securities as we pursue our business strategy.

In the case of indebtedness, specified amounts of principal and interest are customarily payable on specified due dates. In the case of preferred securities, such as our Series A Preferred Stock, holders are provided with a senior claim to distributions, according to the specific terms of the securities. In contrast, however, in the case of common shares, dividends are payable only when, as and if declared by our board of trustees and depend on, among other things, our results of operations, financial condition, debt service requirements, obligations to pay distributions to holders of preferred securities, such as the Series A Preferred Stock, other cash needs and any other factors that the board of trustees may deem relevant or that they are required to consider as a matter of law. Incurring additional debt, or issuing of additional preferred securities, may limit or eliminate the amounts available to pay dividends on our Series A Preferred Stock and common shares.