# Medalist Diversified, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Medalist Diversified, Inc.](/companies/mdrr.md) (CIK 1654595)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 16:10 ET
- Period: 2025-03-31
- Accession: 0001558370-25-006975
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1654595/000155837025006975/mdrr-20250331x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1654595/000155837025006975/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$552.5k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $573.0k | us-gaap:InterestExpense |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$1.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.74 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.74 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 1,357,050 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $460.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $106.6k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $2.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-03-31 | $78.2m | us-gaap:Assets |
| Total liabilities | at 2025-03-31 | $52.4m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $14.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 74,494 characters.

*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;
- 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;
- 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. Our company serves as the general partner of Medalist Diversified Holdings, LP which was formed as a Delaware limited partnership on September 29, 2015.

Our company was 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 and expanding our STNL property portfolio in geographic markets across the United States and (iii) implementing a program by which our company will act as a sponsor of Delaware Statutory Trust (DST) investment offerings. We may also pursue, in an opportunistic manner, other 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, and indirect investments in real property, such as those that may be obtained in a joint venture. While these types of investments are not intended to be a primary focus, we may make such investments in our discretion.

As of March 31, 2025, our portfolio consisted of the following properties:

| ​ Name | ​ | ​ Type | ​ | ​ Location | ​ | ​ SQ FT | ​ ​ | ​ Date Acquired |
| --- | --- | --- | --- | --- | --- | ---: | --- | --- |
| Ashley Plaza Property | ​ | Retail | ​ | Goldsboro, North Carolina | ​ | 156,012 | ​ | August 30, 2019 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Franklin Square Property | ​ | Retail | ​ | Gastonia, North Carolina | ​ | 134,239 | ​ | April 28, 2017 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Lancer Center Property | ​ | Retail | ​ | Lancaster, South Carolina | ​ | 181,590 | ​ | May 14, 2021 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Salisbury Marketplace Property | ​ | Retail | ​ | Salisbury, North Carolina | ​ | 79,732 | ​ | June 13, 2022 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Brookfield Center Property | ​ | Flex | ​ | Greenville, South Carolina | ​ | 64,880 | ​ | October 3, 2019 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Greenbrier Business Center Property | ​ | Flex | ​ | Chesapeake, Virginia | ​ | 89,280 | ​ | August 27, 2021 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Parkway Property | ​ | Flex | ​ | Virginia Beach, Virginia | ​ | 64,109 | ​ | November 1, 2021 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Citibank Property | ​ | Single Tenant Net Lease | ​ | Chicago, Illinois | ​ | 4,350 | ​ | March 28, 2024 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Buffalo Wild Wings Property | ​ | Single Tenant Net Lease | ​ | Bowling Green, Kentucky | ​ | 5,933 | ​ | January 24, 2025 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| United Rentals Property | ​ | Single Tenant Net Lease | ​ | Huntsville, Alabama | ​ | 7,529 | ​ | February 21, 2025 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| East Coast Wings Property | ​ | Single Tenant Net Lease | ​ | Goldsboro, North Carolina | ​ | 5,000 | ​ | August 30, 2019 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| T-Mobile Property | ​ | Single Tenant Net Lease | ​ | Goldsboro, North Carolina | ​ | 3,000 | ​ | August 30, 2019 |

In addition, as of March 31, 2025, our company also owned three 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”), (ii) an outparcel at our Salisbury Marketplace Property consisting of approximately 1.20 acres (the “Salisbury Outparcel”) (the exact size of the Lancer Outparcel and Salisbury Outparcel will not be determined until a user is identified), and (iii) 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 March 31, 2025, our reportable segments were retail center properties, flex center properties and STNL properties.

### First Quarter 2025 Highlights

#### Acquisition of the United Rentals Property

On February 21, 2025, our company, through a wholly-owned subsidiary, completed its acquisition of the United Rentals Property. The purchase price for the United Rentals Property was $3,145,000 paid through the issuance of 251,600 OP Units at a price of $12.50 per OP Unit. Our company’s total investment was $3,187,446. The seller of the United Rentals Property was Dionysus Investments, LLC, a company controlled and owned by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. The purchase price was determined by an independent, third-party appraisal obtained by our company. Pursuant to our company’s Related Person Transaction Policy (the “Related Person Transaction Policy”), our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.

#### Acquisition of the Buffalo Wild Wings Property

On January 24, 2025, our company, through a wholly-owned subsidiary, completed its acquisition of the Buffalo Wild Wings Property. The purchase price for the Buffalo Wild Wings Property was $2,620,000 paid through the issuance of 209,600 OP Units at a price of $12.50 per OP Unit. Our company’s total investment was $2,667,429. The seller of the Buffalo Wild Wings Property was CWS BET Seattle L.P. LLC, a company controlled and owned by Frank Kavanaugh, our company’s President and Chief Executive Officer and Chairman of the Board. Pursuant to the Related Person Transaction Policy, our Board’s Audit Committee determined that the terms of the transaction were those that would normally be agreed upon in an arms-length transaction and approved this transaction.

#### Redemption of Mandatorily Redeemable Preferred Stock

On November 25, 2024, our company completed a partial redemption of 140,000 shares of its mandatorily redeemable preferred stock. The redemption price was $25.00 per share, plus $0.05 per share of accrued dividends. Our company used proceeds from the private placement of OP Units (see below) and cash on hand to fund the $3,527,160 for the partial redemption and accrued dividends. On January 10, 2025, our company completed the redemption of the remaining 60,000 shares of its mandatorily redeemable preferred stock. The redemption price was $25.00 per share, plus $0.44 per share of accrued dividends. Our company used proceeds from the private placement of shares of the company’s common stock, $0.01 par value per share (the “Common Shares”) to fund the $1,526,500 for the final redemption and accrued dividends.

#### Wells Fargo Line of Credit

On June 13, 2022, our company, through its wholly-owned subsidiaries, entered into a loan agreement with Wells Fargo Bank, National Association for a $1,500,000 line of credit (the “Original Wells Fargo Line of Credit”). On October 2, 2024, our company, through its wholly-owned subsidiaries, entered into an amended and restated Revolving Line of Credit Note with Wells Fargo Bank, National Association that increased the line of credit from $1,500,000 to $4,000,000 (the “Expanded Wells Fargo Line of Credit”). Outstanding balances on the Expanded Wells Fargo Line of Credit will bear interest at a floating rate of 3.10% above Daily Simply SOFR. The Expanded Wells Fargo Line of Credit is secured by the Lancer Center Property, the Greenbrier Business Center Property, the Salisbury Marketplace Property and the Citibank Property, is unconditionally guaranteed by our company, and any outstanding balances will be due on the September 30, 2026 maturity date.

On April 28, 2025, our company terminated the Expanded Wells Fargo Line of Credit and Wells Fargo Bank agreed to release its security interest in the Citibank Property. Our company terminated the Expanded Wells Fargo Line of Credit in anticipation of a new credit relationship with a separate lender, which our company expects to announce during the second quarter of 2025. However, there can be no assurance that our company will be able to successfully complete this new credit relationship.

#### S-3 “Shelf” Registration Statement

On April 9, 2025, we filed a new shelf registration statement with the SEC, which is effective for a term of three years and will expire in April 2028. Pursuant to this shelf registration statement, we may issue up to $100,000,000 of Common Shares. The securities covered by this registration statement are limited to our Common Shares. We may periodically offer Common Shares in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

#### Financing Activities

### Mortgages Payable

Our company has historically financed its acquisitions of its investment properties through mortgages. The following table is presented as of March 31, 2025.

*(unaudited)*

| ​ ​ ​ ​ Property | ​ ​ ​ ​ | ​ ​ ​ ​ Monthly Payment | ​ ​ ​ ​ | ​ ​ ​ Interest Rate | ​ ​ ​ ​ ​ | ​ ​ ​ ​ Maturity | ​ ​ ​ ​ | ​ ​ Balance March 31, 2025 | ​ ​ ​ | ​ ​ ​ ​ ​ December 31, 2024 | ​ ​ ​ ​ ​ |
| --- | --- | ---: | --- | --- | ---: | --- | --- | ---: | --- | ---: | --- |
| Franklin Square (a) |  | $61,800 |  | ​ | 3.808% | December 2031 | ​ | $13,190,572 | ​ | $13,250,000 | ​ |
| Ashley Plaza (b) | ​ | $52,795 |  | ​ | 3.75% | September 2029 | ​ | 10,399,841 | ​ | 10,460,350 | ​ |
| Brookfield Center (c) | ​ | $22,876 |  | ​ | 3.90% | November 2029 | ​ | 4,451,365 | ​ | 4,476,429 | ​ |
| Parkway Center (d) | ​ | $28,161 | ​ | ​ | Variable ​ | November 2031 | ​ | ​ 4,798,645 | ​ | ​ 4,814,563 | ​ |
| Wells Fargo Mortgage Facility (e) | ​ | $103,438 | ​ | ​ | 4.50% | June 2027 | ​ | ​ 17,395,602 | ​ | ​ 17,509,420 | ​ |
| **Total mortgages payable** | **​** | **​** **​** | **​** | **​** | **​** **​** | **​** | **​** | **$50,236,025** | **​** | **$50,510,762** | ​ |

Amounts presented do not reflect unamortized loan issuance costs.

(a) The mortgage loan for the Franklin Square Property in the 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 for our company to maintain a net worth of $13,250,000, excluding the assets and liabilities associated with the Franklin Square Property and to maintain liquid assets of no less than $1,000,000. As of March 31, 2025 and December 31, 2024, respectively, our company believes that we are compliant with these covenants. Our company has 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, our company assumed certain guaranty obligations under the Ashley Plaza mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for our company to maintain a net worth of $11,400,000, excluding the liabilities associated with the mortgage loan for the Ashley Plaza Property and for our company to maintain liquid assets of no less than $1,140,000. As of March 31, 2025 and December 31, 2024, respectively, our company believes 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, our company assumed certain guaranty obligations under the Brookfield Property mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for our company to maintain a net worth of $4,850,000, excluding the liabilities associated with the mortgage loan for the Brookfield Property and for our company to maintain liquid assets of no less than $485,000. As of March 31, 2025 and December 31, 2024, respectively, our company believes 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 March 31, 2025 and December 31, 2024 the rate in effect for the Parkway Property mortgage was 6.69% 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 March 31, 2025 and December 31, 2024, respectively, our company believes that we are compliant with this covenant.

On October 28, 2021, our company 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 March 31, 2025, the applicable index (LIBOR or SOFR), exceeded the 3% cap, and payments from the Interest Rate Protection Transaction reduced our company’s net interest expense. Payments to our company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on our company’s condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively.

(e) On June 13, 2022, our company 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. On October 2, 2024, the Company and Wells Fargo Bank, National Association, entered into an Amendment to the Wells Fargo Mortgage Facility that added, as cross collateral, the Citibank 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. Our company has 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, the Greenbrier Business Center Property, and the Citibank Property, and the maintenance of liquid assets of not less than $1,500,000. As of March 31, 2025 and December 31, 2024, respectively, our company believes that we are compliant with these covenants.

### 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, our company estimates 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. Our company also reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of its 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 Company’s Ability to Continue as a Going Concern

Under the accounting guidance related to the presentation of financial statements, our company is required to evaluate, on a quarterly basis, whether or not the entity’s current financial condition, including its sources of liquidity at the date that the condensed consolidated financial statements are issued, will enable the entity to meet its obligations as they come due arising within one year of the date of the issuance of our company’s 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 the entity will be able to continue as a going concern. Our company’s 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 company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our company’s obligations due over the next twelve months, as well as our company’s 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 company’s liquidity, see Note 5 – Loans Payable and Note 8 – Commitments and Contingencies in the notes to our company’s 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 are expected to be provided primarily by the rental receipts from our investment properties. As of March 31, 2025, we had $4,238,209 in cash and cash equivalents and $4 million in borrowing capacity under the Expanded Wells Fargo Line of Credit. However, on April 28, 2025, our company terminated the Expanded Wells Fargo Line of Credit in anticipation of a new credit relationship with a separate lender, which our company expects to announce during the second quarter of 2025. There can be no assurance that we will successfully complete this new credit arrangement, and failure to do so could adversely affect our liquidity.

### Cash Flows

At March 31, 2025, our consolidated cash and restricted cash on hand totaled $4,238,209 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 three months ended March 31, 2025 are as follows:

#### Operating Activities

During the three months ended March 31, 2025, our cash provided by operating activities was $459,972 compared to cash provided by operating activities of $492,441 for the three months ended March 31, 2024, a decrease in cash provided by operating activities of $32,469.

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 three months ended March 31, 2025, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $389,549. During the three months ended March 31, 2024, operating activities adjusted for non-cash items resulted in net cash provided in operating activities of $493,480. The decrease of $103,931 in cash flows from operating activities for the three months ended March 31, 2025 was primarily the result of reduced net operating income from our investment properties resulting from the sale of the Hanover Square Property on March 13, 2024 and increased corporate general and administrative expenses.

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 three months ended March 31, 2025, net changes in asset and liability accounts resulted in $70,423 in cash provided in operations. During the three months ended March 31, 2024, net changes in asset and liability accounts resulted in $1,039 in cash used in operations. This increase of $71,462 in cash provided in operations resulting from changes in assets and liabilities is a result of increased changes in rent and other receivables, net, of $34,651, increased changes in other assets of $10,320 and increased changes in accounts payable and accrued liabilities of $87,386, offset by decreased changes in unbilled rent of $60,895.

The net of (i) the $103,931 decrease in cash provided by operations from the first category and (ii) the $71,462 increase in cash provided by operations from the second category results in a total decrease of cash provided in operations of $32,469 for the three months ended March 31, 2025.

Management believes that separately evaluating these two components of our company’s 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 company’s operating performance, along with adjusted net operating income and adjusted funds from operations, presented below.

#### Investing Activities

During the three months ended March 31, 2025, our cash used by investing activities was $227,464, compared to cash provided in investing activities of $2,738,142 during the three months ended March 31, 2024, a decrease in cash provided by investing activities of $2,965,606.

During the three months ended March 31, 2025, cash used by investing activities consisted of $137,589 in capitalized expenditures, including $29,235 in building improvements, $63,354 in leasing commissions and $45,000 in tenant improvements and $89,875 in investment property acquisitions for closing costs related to the Buffalo Wild Wings Property and United Rentals Property acquisitions. During the three months ended March 31, 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 $226,662 in capitalized expenditures, including $29,124 in building improvements, $2,300 in site improvements, $54,963 in leasing commissions and $140,275 in tenant improvements.

The non-cash investing activity for the three months ended March 31, 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. The non-cash investing activity for the three months ended March 31, 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.

#### Financing Activities

During the three months ended March 31, 2025, our cash used by financing activities was $2,067,035 compared to cash used by financing activities of $1,903,754 during the three months ended March 31, 2024, an increase in cash used by financing activities of $163,281. During the three months ended March 31, 2025, our cash used by financing activities consisted of $1,500,000 for the final redemption of our company’s mandatorily redeemable preferred stock, $274,737 in principal payments for our company’s mortgages, $123,459 in dividends and distributions, $106,624 to repurchase Common Shares, and $62,215 in offering costs paid related to the common stock offering. During the three months ended March 31, 2024, our cash used by financing activities consisted of $1,000,000 to repay the line of credit, short term, $331,215 in principal payments for our company’s mortgages, $510,950 in dividends and distributions and $61,589 for the Operating Partnership Unit redemption.

### Future Liquidity Needs

Liquidity for general operating needs and our company’s 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, our company continually reviews and evaluates its outstanding mortgages payable for refinancing opportunities. While some of our mortgages payable are not pre-payable, some mortgages payable may present opportunities for refinancing.

The primary, non-operating liquidity needs of our company are $150,874 to pay the dividends to common stockholders and distributions to OP Unit holders that were declared on April 3, 2025 and payable April 22, 2025 to holders of record on April 17, 2025, and $813,032 in principal payments due on its mortgages payable during the remaining nine 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. Our company plans to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.

To meet these future liquidity needs, our company has the following resources:

- $2,744,002 in unrestricted cash as of March 31, 2025;
- $1,494,207 held in lender reserves for the purposes of tenant improvements, leasing commissions, real estate taxes and insurance premiums; and
- Cash generated from operations during the remaining nine months ending December 31, 2025, if any.

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 company’s 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 March 31, 2025

### Revenues

Revenues for the three months ended March 31, 2025 and 2024 are as follows:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 | ​ | ​ ​ 2024 | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Increase / (Decrease) |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Retail center property revenues | ​ | $1,492,447 | ​ | $1,849,617 | ​ | $(357,170) |
| Flex center property revenues | ​ | 680,563 | ​ | 664,067 | ​ | 16,496 |
| STNL property revenues | ​ | 148,630 | ​ | 57,955 | ​ | 90,675 |
| **Total Revenues** | **​** | **$2,321,640** | **​** | **$2,571,639** | **​** | **$(249,999)** |

Total revenue was $2,321,640 for the three months ended March 31, 2025, a decrease of $249,999 from the three months ended March 31, 2024. Decreases in retail center property revenues from the sale of the Hanover Square Shopping Center and increased vacancies in the Lancer Center Property and the Salisbury Marketplace Property were partially offset by increased STNL property revenues resulting from the acquisition of the Buffalo Wild Wings Property and the United Rentals Property and slightly increased flex center property revenues.

### Adjusted Net Operating Income

Our company establishes 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 months ended March 31, 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 our company calculates 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 consists of only revenues, operating expenses, and interest expense directly related to our company’s 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 March 31, 2025 and 2024:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ Ashley Plaza | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 ​ | ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Increase / (Decrease) ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Retail center property revenues | ​ | $366,881 | ​ | $371,593 | ​ | $(4,712) |
| Retail center property operating expenses | ​ | ​ 102,202 | ​ | ​ 58,883 | ​ | ​ 43,319 |
| Interest expense | ​ | ​ 97,877 | ​ | ​ 101,156 | ​ | ​ (3,279) |
| **Adjusted net operating income** | **​** | **$166,802** | **​** | **$211,554** | **​** | **$(44,752)** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Franklin Square** |  | ​ |  | ​ |  | ​ |
| Retail center property revenues | ​ | $637,182 | ​ | $617,136 | ​ | $20,046 |
| Retail center property operating expenses | ​ | ​ 140,722 | ​ | ​ 156,641 | ​ | ​ (15,919) |
| Interest expense | ​ | ​ 125,777 | ​ | ​ 127,541 | ​ | ​ (1,764) |
| **Adjusted net operating income** | **​** | **$370,683** | **​** | **$332,954** | **​** | **$37,729** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Hanover Square** |  | ​ |  | ​ |  | ​ |
| Retail center property revenues | ​ | $— | ​ | $307,325 | ​ | $(307,325) |
| Retail center property operating expenses | ​ | ​ — | ​ | ​ 88,342 | ​ | ​ (88,342) |
| Interest expense | ​ | ​ — | ​ | ​ 129,248 | ​ | ​ (129,248) |
| **Adjusted net operating income** | **​** | **$—** | **​** | **$89,735** | **​** | **$(89,735)** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Lancer Center** |  | ​ |  | ​ |  | ​ |
| Retail center property revenues | ​ | $291,607 | ​ | $327,170 | ​ | $(35,563) |
| Retail center property operating expenses | ​ | ​ 114,270 | ​ | ​ 85,800 | ​ | ​ 28,470 |
| Interest expense | ​ | ​ 69,952 | ​ | ​ 72,481 | ​ | ​ (2,529) |
| **Adjusted net operating income** | **​** | **$107,385** | **​** | **$168,889** | **​** | **$(61,504)** |
| **​** | **​** | **​** **​** | **​** | **​** **​** | **​** | **​** **​** |
| **Salisbury Marketplace** |  | ​ |  | ​ |  | ​ |
| Retail center property revenues | ​ | $196,777 | ​ | $226,393 | ​ | $(29,616) |
| Retail center property operating expenses | ​ | ​ 72,530 | ​ | ​ 38,593 | ​ | ​ 33,937 |
| Interest expense | ​ | ​ 69,166 | ​ | ​ 71,666 | ​ | ​ (2,500) |
| **Adjusted net operating income** | **​** | **$55,081** | **​** | **$116,134** | **​** | **$(61,053)** |
| **​** | **​** | **​** **​** | **​** | **​** **​** | **​** | **​** **​** |
| **Total Retail Center Properties** |  | ​ |  | ​ |  | ​ |
| Retail center property revenues | ​ | $1,492,447 | ​ | $1,849,617 | ​ | $(357,170) |
| Retail center property operating expenses | ​ | ​ 429,724 | ​ | ​ 428,259 | ​ | ​ 1,465 |
| Interest expense | ​ | ​ 362,772 | ​ | ​ 502,092 | ​ | ​ (139,320) |
| **Adjusted net operating income** | **​** | **$699,951** | **​** | **$919,266** | **​** | **$(219,315)** |

Retail center property revenues were $1,492,447 for the three months ended March 31, 2025, a $357,170 decrease from the three months ended March 31, 2024, primarily due to the sale of the Hanover Square Shopping Center Property and decreased revenues from the Lancer Center Property and the Salisbury Marketplace Property due to increased vacancies. Increased revenues from the Franklin Square Property, which resulted from full occupancy, slightly offset these decreases.

Adjusted Net Operating Income from retail center properties was $699,951 for the three months ended March 31, 2025. Adjusted Net Operating Income for the three months ended March 31, 2025 decreased by $219,315 from the three months ended March 31, 2024, due to the sale of the Hanover Square Property, decreased Adjusted Net Operating Income from the Ashley Plaza Property, Lancer Center Property and the Salisbury Marketplace 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 and Salisbury Marketplace Property resulted from a decline in cash revenues due to decreased occupancy and an increase in operating expenses, which included heating, ventilation and air conditioning (“HVAC”) repairs at the Lancer Center Property, plumbing repairs at the Salisbury Marketplace Property, and snow removal expenses at each property. Decreased Adjusted Net Operating Income from the Ashley Plaza Property was a result of increased operating expenses due to a major plumbing repair. 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 slightly increased cash revenues from new leases and contractual rent escalations and a decrease in operating expenses due to reduced repair and maintenance 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 March 31, 2025 and 2024:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ Brookfield Center | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 ​ | ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Increase / (Decrease) ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Flex center property revenues | ​ | $191,992 | ​ | $214,378 | ​ | $(22,386) |
| Flex center property operating expenses | ​ | ​ 66,706 | ​ | ​ 52,424 | ​ | ​ 14,282 |
| Interest expense | ​ | ​ 43,563 | ​ | ​ 44,988 | ​ | ​ (1,425) |
| **Adjusted net operating income** | **​** | **$81,723** | **​** | **$116,966** | **​** | **$(35,243)** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Greenbrier Business Center** |  | ​ |  | ​ |  | ​ |
| Flex center property revenues | ​ | $267,161 | ​ | $250,326 | ​ | $16,835 |
| Flex center property operating expenses | ​ | ​ 68,432 | ​ | ​ 47,812 | ​ | ​ 20,620 |
| Interest expense | ​ | ​ 57,376 | ​ | ​ 59,451 | ​ | ​ (2,075) |
| **Adjusted net operating income** | **​** | **$141,353** | **​** | **$143,063** | **​** | **$(1,710)** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Parkway** |  | ​ |  | ​ |  | ​ |
| Flex center property revenues | ​ | $221,410 | ​ | $199,363 | ​ | $22,047 |
| Flex center property operating expenses | ​ | ​ 72,565 | ​ | ​ 44,437 | ​ | ​ 28,128 |
| Interest expense | ​ | ​ 67,889 | ​ | ​ 64,888 | ​ | ​ 3,001 |
| **Adjusted net operating income** | **​** | **$80,956** | **​** | **$90,038** | **​** | **$(9,082)** |
| **​** | **​** | **​** **​** | **​** | **​** **​** | **​** | **​** **​** |
| **Total Flex Center Properties** |  | ​ |  | ​ |  | ​ |
| Flex center property revenues | ​ | $680,563 | ​ | $664,067 | ​ | $16,496 |
| Flex center property operating expenses | ​ | ​ 207,703 | ​ | ​ 144,673 | ​ | ​ 63,030 |
| Interest expense | ​ | ​ 168,828 | ​ | ​ 169,327 | ​ | ​ (499) |
| **Adjusted net operating income** | **​** | **$304,032** | **​** | **$350,067** | **​** | **$(46,035)** |

Flex center property revenues were $680,563 for the three months ended March 31, 2025, an increase of $16,496 from the three months ended March 31, 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 new vacancy.

Adjusted Net Operating Income from our flex center properties was $304,032 for the three months ended March 31, 2025. Adjusted Net Operating Income for the three months ended March 31, 2025 decreased by $46,035 from the three months ended March 31, 2024 due to decreased Adjusted Net Operating Income from the Brookfield Property, Parkway Property, and Greenbrier Business Center Property.

Decreased Adjusted Net Operating Income from the Brookfield Property resulted from decreased cash revenues due to a new vacancy and increased operating expenses due to increased contract services, repair and snow removal expenses. Decreased Adjusted Net Operating Income from the Parkway Property resulted from increased operating expenses due to increased contract services, repair and snow removal expenses, offset by increased cash 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 cash revenues from contractual rent escalations and new leases offset by increased operating expenses due to increased contract services, repair and snow removal 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 March 31, 2025 and 2024:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ East Coast Wings | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 ​ | ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Increase / (Decrease) ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Single tenant net lease property revenues | ​ | $26,630 | ​ | $26,628 | ​ | $2 |
| Single tenant net lease property operating expenses | ​ | ​ 17,529 | ​ | ​ 3,719 | ​ | ​ 13,810 |
| Interest expense | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| **Adjusted net operating income** | **​** | **$9,101** | **​** | **$22,909** | **​** | **$(13,808)** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **T-Mobile** |  | ​ |  | ​ |  | ​ |
| Single tenant net lease property revenues | ​ | $29,945 | ​ | $29,853 | ​ | $92 |
| Single tenant net lease property operating expenses | ​ | ​ 4,398 | ​ | ​ 3,989 | ​ | ​ 409 |
| Interest expense | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| **Adjusted net operating income** | **​** | **$25,547** | **​** | **$25,864** | **​** | **$(317)** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Citibank** |  | ​ |  | ​ |  | ​ |
| Single tenant net lease property revenues | ​ | $37,697 | ​ | $1,474 | ​ | $36,223 |
| Single tenant net lease property operating expenses | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| Interest expense | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| **Adjusted net operating income** | **​** | **$37,697** | **​** | **$1,474** | **​** | **$36,223** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Buffalo Wild Wings** |  | ​ |  | ​ |  | ​ |
| Single tenant net lease property revenues | ​ | $32,709 | ​ | $— | ​ | $32,709 |
| Single tenant net lease property operating expenses | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| Interest expense | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| **Adjusted net operating income** | **​** | **$32,709** | **​** | **$—** | **​** | **$32,709** |
| **​** | **​** | **​** **​** | **​** | **​** **​** | **​** | **​** **​** |
| **United Rentals** |  | ​ |  | ​ |  | ​ |
| Single tenant net lease property revenues | ​ | $21,649 | ​ | $— | ​ | $21,649 |
| Single tenant net lease property operating expenses | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| Interest expense | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| **Adjusted net operating income** | **​** | **$21,649** | **​** | **$—** | **​** | **$21,649** |
| **​** | **​** | **​** **​** | **​** | **​** **​** | **​** | **​** **​** |
| **Total STNL** |  | ​ |  | ​ |  | ​ |
| Single tenant net lease property revenues | ​ | $148,630 | ​ | $57,955 | ​ | $90,675 |
| Single tenant net lease property operating expenses | ​ | ​ 21,927 | ​ | ​ 7,708 | ​ | ​ 14,219 |
| Interest expense | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| **Adjusted net operating income** | **​** | **$126,703** | **​** | **$50,247** | **​** | **$76,456** |

STNL property revenues were $148,630 for the three months ended March 31, 2025, a $90,675 increase from the three months ended March 31, 2024. Revenues increased due to the acquisition of the Buffalo Wild Wings Property and the United Rentals Property, owning the Citibank Property for the full three months ending March 31, 2025, and slight increases in common area maintenance revenues from the T-Mobile Property.

Adjusted Net Operating Income from STNL properties was $126,703 for the three months ended March 31, 2025. Adjusted Net Operating Income for the three months ended March 31, 2025 increased by $76,456 over the three months ended March 31, 2024 due to increased Adjusted Net Operating Income from the acquisitions of the Citibank and United Rentals Properties, offset by decreased Adjusted Net Operating Income from the East Coast Wings Property and T-Mobile Property.

Decreased Adjusted Net Operating Income from the East Coast Wings Property resulted from increased exterior repair costs that were our company’s responsibility. Decreased Adjusted Net Operating Income from the T-Mobile property was a result of a slight increase in property operating expenses.

### Operating Expenses

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ Property Operating Expense Reconciliation | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 ​ | ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Increase / (Decrease) ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Retail center property operating expenses | ​ | $429,724 | ​ | $428,259 | ​ | $1,465 |
| Flex center property operating expenses | ​ | ​ 207,703 | ​ | ​ 144,673 | ​ | ​ 63,030 |
| STNL property operating expenses | ​ | ​ 21,927 | ​ | ​ 7,708 | ​ | ​ 14,219 |
| **Total Property Operating Expenses from Consolidated Statements of Operations** | **​** | **$659,354** | **​** | **$580,640** | **​** | **$78,714** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Other Operating Expenses** |  | ​ |  | ​ |  | ​ |
| Bad debt expense | ​ | $1,321 | ​ | $14,056 | ​ | $(12,735) |
| Share based compensation expenses | ​ | ​ 397,182 | ​ | ​ 277,500 | ​ | ​ 119,682 |
| Legal, accounting and other professional fees | ​ | ​ 426,569 | ​ | ​ 393,078 | ​ | ​ 33,491 |
| Corporate general and administrative expenses | ​ | ​ 353,341 | ​ | ​ 296,794 | ​ | ​ 56,547 |
| Loss on impairment | ​ | ​ 61,803 | ​ | ​ — | ​ | ​ 61,803 |
| Depreciation and amortization | ​ | ​ 965,211 | ​ | ​ 1,012,476 | ​ | ​ (47,265) |
| **Total Operating Expenses** | **​** | **$2,864,781** | **​** | **$2,574,544** | **​** | **$290,237** |

Total operating expenses were $2,864,781 for the three months ended March 31, 2025. Total expenses for the three months ended March 31, 2025 increased by $290,237 over the three months ended March 31, 2024, primarily due to increased share based compensation, loss on impairment, and corporate general and administrative expenses, which increased primarily due to increased marketing and compensation expenses.

### Operating (Loss) Income

Operating loss for the three months ended March 31, 2025 was $552,516, a decrease of $3,317,276 from the operating income of $2,764,760 for the three months ended March 31, 2024. This decrease was primarily a result of the gain on the sale of the Hanover Square Property of $2,819,502 during the three months ended March 31, 2024.

### Interest Expense

Interest expense was $573,016 and $876,748 for the three months ended March 31, 2025 and 2024, respectively, as follows:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ Interest Expense Reconciliation | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 ​ | ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Increase / (Decrease) ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Retail center property interest expense | ​ | $362,772 | ​ | $502,092 | ​ | $(139,320) |
| Flex center property interest expense | ​ | ​ 168,828 | ​ | ​ 169,327 | ​ | ​ (499) |
| Addback: Non cash interest expense | ​ | ​ 29,180 | ​ | ​ 23,767 | ​ | ​ 5,413 |
| Addback: Other interest expense | ​ | ​ 12,236 | ​ | ​ 181,562 | ​ | ​ (169,326) |
| **Total Interest Expense from Condensed Consolidated Statements of Operations** | **​** | **$573,016** | **​** | **$876,748** | **​** | **$(303,732)** |

49

Total interest expense for the three months ended March 31, 2025 decreased by $303,732 over the three months ended March 31, 2024. This decrease was primarily a result of decreased interest of $129,248 from the sale of the Hanover Square Shopping Center Property and the redemption of the mandatorily redeemable preferred stock. Non cash interest expense, above, includes 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 March 31, 2025, other income was $126,874, which consisted of $118,529 in lease termination fees and interest income of $8,345. This is an increase of $81,985 from other income of $44,889 for the three months ended March 31, 2024, which consisted of $35,338 in income related to the fair value change of the interest rate cap and interest income of $9,551.

### Other Expense

During the three months ended March 31, 2025, other expense was $28,226 related to the fair value change of the interest rate cap. Since the fair value change of the interest cap was recognized as income, there was no such other expense for the three months ended March 31, 2024.

### Net (Loss) Income

Net loss was $1,026,884 for the three months ended March 31, 2025, before adjustments for net loss attributable to noncontrolling interests. After adjusting for noncontrolling interests, the net loss attributable to our common stockholders was $1,006,826.

Net income for the three months ended March 31, 2025 decreased by $2,959,785 over the three months ended March 31, 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 three months ended March 31, 2025 decreased by $2,346,224 over the three months ended March 31, 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 company’s 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), our company believes that the appropriate starting point for the calculation is the net (loss) income before allocation to noncontrolling interests. This allows our company 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 company’s 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 three months ended March 31, 2025 and 2024:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 | ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | --- |
| Net (loss) income | ​ | $(1,026,884) | ​ | ​ 1,932,901 |
| Depreciation of tangible real property assets (1) | ​ | 589,460 | ​ | ​ 594,391 |
| Depreciation of tenant improvements (2) | ​ | 183,687 | ​ | ​ 200,231 |
| Amortization of tenant improvement lease incentives (3) | ​ | ​ 742 | ​ | ​ 741 |
| Amortization of leasing commissions (4) | ​ | 55,049 | ​ | ​ 45,839 |
| Amortization of intangible assets (5) | ​ | 137,015 | ​ | ​ 172,015 |
| Gain on disposal of investment property (6) | ​ | ​ — | ​ | ​ (2,819,502) |
| Loss on impairment (7) | ​ | 61,803 | ​ | ​ — |
| Loss on extinguishment of debt (8) | ​ | ​ — | ​ | ​ 51,837 |
| Loss on redemption of mandatorily redeemable preferred stock (8) | ​ | 9,375 | ​ | ​ — |
| **Funds from operations (FFO)** | ​ | **$10,247** | ​ | **$178,453** |

(1) Depreciation expense for buildings, site improvements and furniture and fixtures.

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

(5) Amortization of (i) intangible assets acquired as part of the purchase of the retail center properties and flex center property, 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) Consistent with the treatment of impairment write-downs, our company includes an adjustment for its 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 three months ended March 31, 2025 and 2024 was as follows:

*(unaudited)*

*(unaudited)*

| ​ ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ For the three months ended March 31, 2025 | ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: |
| Funds from operations | ​ | $10,247 | ​ | $178,453 |
| Amortization of above market leases (1) | ​ | 6,147 | ​ | 15,434 |
| Amortization of below market leases (2) | ​ | (56,932) | ​ | (79,856) |
| Straight line rent (3) | ​ | (62,764) | ​ | (1,869) |
| Capital expenditures (4) | ​ | (137,589) | ​ | (226,662) |
| Decrease (increase) in fair value of interest rate cap (5) | ​ | 28,226 | ​ | (35,338) |
| Amortization of loan issuance costs (6) | ​ | 29,180 | ​ | 23,767 |
| Amortization of preferred stock discount and offering costs (7) | ​ | 2,404 | ​ | 64,126 |
| Share-based compensation (8) | ​ | 397,182 | ​ | 277,500 |
| Bad debt expense (9) | ​ | 1,321 | ​ | 14,056 |
| **Adjusted funds from operations (AFFO)** | ​ | **$217,422** | ​ | **$229,611** |

(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, building and site improvements and purchases of furniture, fixtures and equipment that have not been reimbursed by property escrow accounts. 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 for amortization of non-cash expenses recognized as a result of amortizing loan issuance costs over the terms of the respective mortgages.

(7) 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.

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

(9) 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. Our company has elected to include non-cash expenses (bad debt expense) in its calculation of AFFO.

## Market risk

As filed, 180 characters.

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.

## Controls and procedures

As filed, 3,329 characters.

### 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 March 31, 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 March 31, 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 March 31, 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 March 31, 2025, were effective.

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

## Risk factors

As filed, 1,451 characters.

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. 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.

### 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 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, and the ensuing economic uncertainty of these measures, 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.

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0001558370-25-006975. Last ingested by Listed: Oct 30, 2026, 16:11 ET. No prices; not investment advice.