Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 14, 2023

Presidio Property Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland

001-34049

33-0841255

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

4995 Murphy Canyon Road, Suite 300

San Diego, California 92123

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (760) 471-8536

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Series A Common Stock, $0.01 par value per share	SQFT	The Nasdaq Stock Market LLC

9.375% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share	SQFTP	The Nasdaq Stock Market LLC

Series A Common Stock Purchase Warrants to Purchase Shares of Common Stock	SQFTW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition

Press Release

On August 14, 2023, Presidio Property Trust, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2023, and made the press release available on its website, www.PresidioPT.com. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

The Company also made available on its website a financial supplement containing financial data of the Company (“Supplemental Financial Information”) for the quarter ended March 31, 2023, and such Supplemental Financial Information is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

The information in this Item 2.02 of this Current Report on Form 8-K, including the information contained in the exhibits, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01

Regulation FD Disclosure.

The Supplemental Financial Information furnished by the Company and posted to its website as described above under Item 2.02 is hereby incorporated by reference into this Item 7.01.

Item 9.01

Financial Statements and Exhibits.

(d)		Exhibits

99.1		Press Release dated August 14, 2023
99.2		Supplemental Financial Information for the quarter ended March 31, 2023
104		Cover Page Interactive Data File (embedded with the inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 15, 2023	PRESIDIO PROPERTY TRUST, INC.

	By:	/s/ Adam Sragovicz
	Name:	Adam Sragovicz
	Title:	Chief Financial Officer

Exhibit 99.1

Presidio Property Trust, Inc. Announces Earnings for

the Quarter Ended June 30, 2023

San Diego, California, August 14, 2023 – Presidio Property Trust, Inc. (Nasdaq: SQFT, SQFTP) (the “Company”), an internally managed, diversified real estate investment trust (“REIT”), today reported earnings for its quarter ended June 30, 2023.

Quarter Ended June 30, 2023, Financial Results

Net loss attributable to the Company’s common stockholders for the three months ended June 30, 2023, was approximately $1,831,889, or $(0.15) per basic and diluted share, compared to a net loss of approximately $830,212, or $(0.07) per basic and diluted share for the three months ended June 30, 2022. The change in net income attributable to the Company’s common stockholders was a result of:

	●	An increase in G&A expenses of approximately $0.6 million due mainly to filing, accounting, and consulting costs related to the SPAC in Q2 2023.

	●	An increase in interest expense related to mortgage notes payable of approximately $0.3 million in Q2 2023 compared to Q2 2022. This is due to the acquisition of real estate assets, most notably an increase in the number of homes in the model home portfolio. The Company owned 82 model homes as of June 30, 2022, and increased the holdings to 105 model homes as of June 30, 2023. Additionally, the interest rates on mortgages for the model home portfolio generally increased from a weighted average interest rate of 3.77% to 5.24% as of June 30, 2022, and June 30, 2023, respectively.

	●	The increase in G&A and interest expense is partially offset by an increase in rental revenue and fee and other income of approximately $0.2 million in Q2 2023 compared to Q2 2022. This increase in rental income is due largely to the Company having a larger model home portfolio with 23 more homes in Q2 2023 versus Q2 2022, with no major changes to the commercial portfolio.

	●	Noncontrolling interest payments were approximately $0.4 million larger in Q2 2023 compared to Q2 2022. This is due to the Company selling more homes in the joint ventures. In the JV’s alone, the Company sold 7 homes for a gain of $1.1 million and 3 homes for a gain of $0.7 million in Q2 2023 and Q2 2022 respectively.

FFO (non-GAAP) decreased by approximately $0.4 million to approximately $(489,404) from $(46,023) for the three months ended June 30, 2023, and June 30, 2022, respectively. A reconciliation of FFO to net income, the most directly comparable GAAP financial measure, is attached to this press release. However, because FFO excludes depreciation and amortization as well as the changes in the value of the Company’s properties that result from use or market conditions, each of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited.

We believe Core FFO (non-GAAP) provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Core FFO decreased by about $0.4 million, from approximately $234,958 in the three months ended June 30, 2022, to approximately $(209,748) in the three months ended June 30, 2023.

Acquisitions and Dispositions for the first two quarters of 2023

	●	The Company acquired 23 model home properties and leased them back to the homebuilders under triple net leases during the six months ended June 30, 2023. The purchase price for these properties was $12.9 million. The purchase price consisted of cash payments of $3.9 million and mortgage notes of $9.0 million.

	●	The Company sold 10 model home properties for approximately $5.0 million and recognized a gain of approximately $1.5 million.

Dividends paid during the first two quarters of 2023:

	●	During the first quarter and second quarter of 2023, the Company paid dividends to Common shareholders of $0.022 and $0.023 per share, respectively, for a total of $0.045 per share.

	●	During the first six months of 2023, the Company paid six monthly dividends, which totaled $1.17186 per share to shareholders of Series D preferred stock.

About Presidio Property Trust

Presidio is an internally managed, diversified REIT with holdings in model home properties which are triple-net leased to homebuilders, office, industrial, and retail properties. Presidio’s model homes are leased to homebuilders located in Arizona, Illinois, Texas, Wisconsin, and Florida. Our office, industrial and retail properties are located primarily in Colorado, with properties also located in Maryland, North Dakota, Texas, and Southern California. While geographical clustering of real estate enables us to reduce our operating costs through economies of scale by servicing several properties with less staff, it makes us susceptible to changing market conditions in these discrete geographic areas, including those that have developed as a result of COVID-19. Presidio is also the sponsor of the Special Purpose Acquisition Company (SPAC) Murphy Canyon Acquisition Corp. (NASDAQ: MURF), which currently holds approximately $23.3 million in trust. Murphy Canyon Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. The SPAC has entered into a definitive business combination agreement with Conduit Pharmaceuticals Limited (Conduit). A full description of the terms of the proposed business combination, which is expected to close in the second half of 2023 subject to the satisfaction of multiple conditions, including approval of the business combination by the SPAC’s shareholders, is provided in the registration statement on Form S-4 that the SPAC has filed with the SEC. For more information on Presidio, please visit the Company’s website at https://www.PresidioPT.com.

Definitions

Non-GAAP Financial Measures

Funds from Operations (“FFO”) – The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

However, because FFO excludes depreciation and amortization as well as the changes in the value of the Company’s properties that result from use or market conditions, each of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.

Core Funds from Operations (“Core FFO”) – We calculate Core FFO by using FFO as defined by NAREIT and adjusting for certain other non-core items. We also exclude from our Core FFO calculation acquisition costs, loss on early extinguishment of debt, changes in the fair value of the earn-out, changes in fair value of contingent consideration, non-cash warrant dividends and the amortization of stock-based compensation.

We believe Core FFO provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Other equity REITs may calculate Core FFO differently or not at all, and, accordingly, the Company’s Core FFO may not be comparable to such other REITs’ Core FFO.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. Forward-looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements also include statements relating to the closing of the business combination with Conduit within a certain timeframe or at all. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Except as required by law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “ Risk Factors” section of the Company’s documents filed with the SEC, copies of which are available on the SEC’s website, www.sec.gov.

Investor Relations Contact:

Presidio Property Trust, Inc.

Lowell Hartkorn, Investor Relations

LHartkorn@presidiopt.com

Telephone: (760) 471-8536 x1244

Presidio Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
Real estate assets and lease intangibles:
Land	$	20,803,978		$	19,189,386
Buildings and improvements		135,185,098			125,979,374
Tenant improvements		14,426,125			13,861,839
Lease intangibles		4,110,139			4,110,139
Real estate assets and lease intangibles held for investment, cost		174,525,340			163,140,738
Accumulated depreciation and amortization		(36,841,025	)		(34,644,511	)
Real estate assets and lease intangibles held for investment, net		137,684,315			128,496,227
Real estate assets held for sale, net		1,196,336			2,016,003
Real estate assets, net		138,880,651			130,512,230
Other assets:
Cash, cash equivalents and restricted cash		8,700,791			16,516,725
Deferred leasing costs, net		1,546,034			1,516,835
Goodwill		2,423,000			2,423,000
Other assets, net (see Note 6)		4,161,325			3,511,681
Total other assets		16,831,150			23,968,241
Investments held in Trust (see Notes 2 & 9)		23,339,887			136,871,183
TOTAL ASSETS	$	179,051,688		$	291,351,654
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	102,856,817		$	95,899,176
Mortgage notes payable related to properties held for sale, net		482,142			999,523
Mortgage notes payable, total net		103,338,959			96,898,699
Accounts payable and accrued liabilities		4,373,983			4,028,564
Accounts payable and accrued liabilities of SPAC (see Notes 2 & 9)		6,655,685			5,046,725
Accrued real estate taxes		977,658			1,879,875
Dividends payable preferred stock		177,145			178,511
Lease liability, net		31,799			46,833
Below-market leases, net		15,753			18,240
Total liabilities		115,570,982			108,097,447
Commitments and contingencies (Note 2 & 9):
SPAC Class A common stock subject to possible redemption; 2,187,728 as of June 30, 2023 and 13,225,000 shares as of December 31, 2022 (at $10.45 per share), net of issuance cost of approximately $6,400,000		16,748,849			130,411,135
Equity:
Series D Preferred Stock, $0.01 par value per share; 1,000,000 shares authorized; 901,375 shares issued and outstanding (liquidation preference $25.00 per share) as of June 30, 2023 and 913,987 shares issued and outstanding as of December 31, 2022		9,014			9,140
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 11,849,710 shares and 11,807,893 shares were issued and outstanding at June 30, 2023 and December 31, 2022, respectively		118,497			118,079
Additional paid-in capital		180,365,055			182,044,157
Dividends and accumulated losses		(142,294,778	)		(138,341,750	)
Total stockholders’ equity before noncontrolling interest		38,197,788			43,829,626
Noncontrolling interest		8,534,069			9,013,446
Total equity		46,731,857			52,843,072
TOTAL LIABILITIES AND EQUITY	$	179,051,688		$	291,351,654

Presidio Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Rental income	$	4,329,588		$	4,188,076		$	8,271,641		$	8,640,394
Fees and other income		214,284			132,784			393,723			253,607
Total revenue		4,543,872			4,320,860			8,665,364			8,894,001
Costs and expenses:
Rental operating costs		1,399,159			1,348,083			2,974,149			2,931,556
General and administrative		1,813,184			1,214,005			3,777,804			2,797,696
Depreciation and amortization		1,368,829			1,316,193			2,702,403			2,655,418
Total costs and expenses		4,581,172			3,878,281			9,454,356			8,384,670
Other income (expense):
Interest expense - mortgage notes		(1,336,415	)		(1,085,860	)		(2,204,182	)		(2,103,573	)
Interest and other income, net		398,085			93,128			1,140,201			166,733
Gain on sales of real estate, net		1,119,952			1,227,484			1,537,289			2,750,269
Income tax expense		(349,074	)		(259,285	)		(497,527	)		(524,524	)
Total other income (expense), net		(167,452	)		(24,533	)		(24,219	)		288,905
Net income (loss)		(204,752	)		418,046			(813,211	)		798,236
Less: Income attributable to noncontrolling interests		(1,094,852	)		(709,202	)		(1,481,933	)		(1,917,878	)
Net loss attributable to Presidio Property Trust, Inc. stockholders	$	(1,299,604	)	$	(291,156	)	$	(2,295,144	)	$	(1,119,642	)
Less: Preferred Stock Series D dividends		(532,285	)		(539,056	)		(1,067,733	)		(1,078,111	)
Less: Series A Warrant dividend		—			—			—			(2,456,512	)
Net loss attributable to Presidio Property Trust, Inc. common stockholders	$	(1,831,889	)	$	(830,212	)	$	(3,362,877	)	$	(4,654,265	)

Net loss per share attributable to Presidio Property Trust, Inc. common stockholders:
Basic & Diluted	$	(0.15	)	$	(0.07	)	$	(0.28	)	$	(0.39	)

Weighted average number of common shares outstanding - basic & diluted		11,839,359			11,799,689			11,837,020			11,786,741

FFO and Core FFO Reconciliation

	For the Three Months Ended						For the Six Months Ended
	6/30/2023			6/30/2022			6/30/2023			6/30/2022
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(1,831,889	)	$	(830,212	)	$	(3,362,877	)	$	(4,654,265	)
Adjustments:
Income attributable to noncontrolling interests		1,094,852			709,202			1,481,933			1,917,878
Depreciation and amortization		1,368,829			1,316,193			2,702,403			2,655,418
Amortization of above and below market leases, net		(1,244	)		(13,722	)		(2,487	)		(27,445	)
Loss (gain) on sale of real estate assets, net		(1,119,952	)		(1,227,484	)		(1,537,289	)		(2,750,269	)
FFO	$	(489,404	)	$	(46,023	)	$	(718,317	)	$	(2,858,683	)
Restricted stock compensation		279,656			280,981			540,501			568,700
Series A Warrant dividend		-			-			-			2,456,512
Core FFO	$	(209,748	)	$	234,958		$	(177,816	)	$	166,529

Weighted average number of common shares outstanding - basic and diluted		11,839,359			11,799,689			11,837,020			11,786,741

Core FFO / Wgt Avg Share	$	(0.018	)	$	0.020		$	(0.015	)	$	0.014

Exhibit 99.2

SUPPLEMENTAL FINANCIAL INFORMATION

As of June 30, 2023

FORWARD-LOOKING STATEMENTS

This presentation contains “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties, many of which are beyond our control. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Quarterly Report on Form 10-Q. Forward-looking statements relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, financial condition, liquidity, capital resources, cash flows, dividends, results of operations and other financial and operating information. When used in this presentation, the words “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “should,” “project,” “plan,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

The forward-looking statements contained in this presentation are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to it 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 in the Annual Report on Form 10-K, as filed March 28, 2023 (“Annual Report”) and the Company’s Quarterly Report on Form 10-Q filed with the SEC on the date hereof (“Quarterly Report”), changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in the “Risk Factors” section of the Annual Report and the Quarterly Report, 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 presentation speaks only as of the date on which we make it. 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 securities laws.

COMPANY OVERVIEW

		Corporate Information
		Headquarters	San Diego, CA
		Founded	1999
		Key Geographies	CA, CO, MD, ND & TX
		Employees	17

●	Presidio Property Trust, Inc. (“Presidio” or the “Company”) was founded in 1999 as NetREIT

●	Presidio is an internally managed real estate company focused on commercial real estate opportunities in often overlooked and regionally dominant markets	Portfolio Summary (Number / Square Footage)
		Office	8 properties / 606,724 sq. ft.
●	The Company acquires, owns, and manages office and industrial real estate assets in markets with strong demographic and economic drivers with attractive going-in cap rates	Retail	3 properties / 65,242 sq. ft.
		Industrial	1 property / 150,099 sq. ft.
●	Presidio’s commercial portfolio currently includes 12 commercial properties with a book value of approximately $92 million	Model Homes ⁽¹⁾	5 funds / 105 homes

●	In addition to its commercial real estate holdings, Presidio generates fees and rental income from affiliated entities, which manage and/or own a portfolio of model homes ⁽¹⁾	Portfolio Value & Debt
		Book Value	$138.8 million ⁽²⁾
		Existing Secured Debt	$104.2 million

		(1) The Company holds partial ownership interests in several entities which own model home properties (2) Includes book value of model homes

COMMERCIAL PORTFOLIO

($ in000’s) Property Location	Sq., Ft.		Date Acquired	Year Property Constructed	Purchase Price (1)		Occupancy			Percent Ownership			Mortgage On property
Office/Industrial Properties:
Genesis Plaza, San Diego, CA (2)		57,807	08/10	1989		10,000		96.2	%		76.4	%		5,997
Dakota Center, Fargo, ND		119,434	05/11	1982		9,575		58.1	%		100.0	%		9,321
Grand Pacific Center, Bismarck, ND		93,711	03/14	1976		5,350		56.0	%		100.0	%		3,817
Arapahoe Center, Colorado Springs, CO		79,023	12/14	2000		11,850		88.0	%		100.0	%		7,515
West Fargo Industrial, West Fargo, ND		150,099	08/15	1998/2005		7,900		98.3	%		100.0	%		3,970
300 N.P., West Fargo, ND		34,517	08/15	1922		3,850		64.4	%		100.0	%		0
One Park Centre, Westminster CO		69,174	08/15	1983		9,150		82.3	%		100.0	%		6,104
Shea Center II, Highlands Ranch, CO		121,306	12/15	2000		25,325		62.1	%		100.0	%		17,091
Baltimore, Baltimore, MD		31,752	12/21	2006		8,892		100.0	%		100.0	%		5,670
Total Office/Industrial Properties		756,823			$	91,892		76.8	%				$	59,485

Retail Properties:
Union Town Center, Colorado Springs, CO		44,042	12/14	2003		11,212		79.5	%		100.0	%		7,948
Research Parkway, Colorado Springs, CO		10,700	08/15	2003		2,850		100.0	%		100.0	%		1,619
Mandolin, Houston, TX (3)		10,500	08/21	2021		4,892		100.0	%		61.3	%		3,604
Total Retail Properties		65,242			$	18,954		86.2	%				$	13,171

		822,065			$	110,846		77.5	%				$	72,656

(1)	Prior to January 1, 2009, “Purchase Price” includes our acquisition related costs and expenses for the purchase of the property. After January 1, 2009, acquisition related costs and expenses were expensed when incurred until ASU 2017-01 was adopted by the Company in 2017. Since then, acquisition related costs for real estate acquisitions that do not meet the definition of a business, are capitalized.

(2)	Genesis Plaza is owned by two tenants-in-common, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 76.4%, based on our ownership percentages of each tenant-in-common.

(3)	Owned by NetREIT Highland LLC, which was formed in 2012. NetREIT Highland LLC is wholly owned by NetREIT Palm Self Storage LP (a joint venture where Presidio Property trust owns 61.3%).

MODEL HOMES PORTFOLIO

Geographic Region	No. of Properties	Aggregate Square Feet		Approximate % of Square Feet			Current Base Annual Rent		Approximate of Aggregate % Annual Rent
Midwest	4		12,307		3.9	%	$	182,748		4.8	%
Southeast	4		9,875		3.1	%		172,428		4.5	%
Southwest	97		297,054		93.0	%		3,475,596		90.7	%
Total	105		319,236		100	%	$	3,830,772		100.0	%

CONSOLIDATED BALANCE SHEET

Presidio Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2023			2022
		(Unaudited)
ASSETS
Real estate assets and lease intangibles:
Land	$	20,803,978		$	19,189,386
Buildings and improvements		135,185,098			125,979,374
Tenant improvements		14,426,125			13,861,839
Lease intangibles		4,110,139			4,110,139
Real estate assets and lease intangibles held for investment, cost		174,525,340			163,140,738
Accumulated depreciation and amortization		(36,841,025	)		(34,644,511	)
Real estate assets and lease intangibles held for investment, net		137,684,315			128,496,227
Real estate assets held for sale, net		1,196,336			2,016,003
Real estate assets, net		138,880,651			130,512,230
Other assets:
Cash, cash equivalents and restricted cash		8,700,791			16,516,725
Deferred leasing costs, net		1,546,034			1,516,835
Goodwill		2,423,000			2,423,000
Other assets, net (see Note 6)		4,161,325			3,511,681
Total other assets		16,831,150			23,968,241
Investments held in Trust (see Notes 2 & 9)		23,339,887			136,871,183
TOTAL ASSETS	$	179,051,688		$	291,351,654
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	102,856,817		$	95,899,176
Mortgage notes payable related to properties held for sale, net		482,142			999,523
Mortgage notes payable, total net		103,338,959			96,898,699
Accounts payable and accrued liabilities		4,373,983			4,028,564
Accounts payable and accrued liabilities of SPAC (see Notes 2 & 9)		6,655,685			5,046,725
Accrued real estate taxes		977,658			1,879,875
Dividends payable preferred stock		177,145			178,511
Lease liability, net		31,799			46,833
Below-market leases, net		15,753			18,240
Total liabilities		115,570,982			108,097,447
Commitments and contingencies (Note 2 & 9):
SPAC Class A common stock subject to possible redemption; 2,187,728 as of June 30, 2023 and 13,225,000 shares as of December 31, 2022 (at $10.45 per share), net of issuance cost of approximately $6,400,000		16,748,849			130,411,135
Equity:
Series D Preferred Stock, $0.01 par value per share; 1,000,000 shares authorized; 901,375 shares issued and outstanding (liquidation preference $25.00 per share) as of June 30, 2023 and 913,987 shares issued and outstanding as of December 31, 2022		9,014			9,140
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 11,849,710 shares and 11,807,893 shares were issued and outstanding at June 30, 2023 and December 31, 2022, respectively		118,497			118,079
Additional paid-in capital		180,365,055			182,044,157
Dividends and accumulated losses		(142,294,778	)		(138,341,750	)
Total stockholders’ equity before noncontrolling interest		38,197,788			43,829,626
Noncontrolling interest		8,534,069			9,013,446
Total equity		46,731,857			52,843,072
TOTAL LIABILITIES AND EQUITY	$	179,051,688		$	291,351,654

CONSOLIDATED STATEMENT OF OPERATIONS

Presidio Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Rental income	$	4,329,588		$	4,188,076		$	8,271,641		$	8,640,394
Fees and other income		214,284			132,784			393,723			253,607
Total revenue		4,543,872			4,320,860			8,665,364			8,894,001
Costs and expenses:
Rental operating costs		1,399,159			1,348,083			2,974,149			2,931,556
General and administrative		1,813,184			1,214,005			3,777,804			2,797,696
Depreciation and amortization		1,368,829			1,316,193			2,702,403			2,655,418
Total costs and expenses		4,581,172			3,878,281			9,454,356			8,384,670
Other income (expense):
Interest expense - mortgage notes		(1,336,415	)		(1,085,860	)		(2,204,182	)		(2,103,573	)
Interest and other income, net		398,085			93,128			1,140,201			166,733
Gain on sales of real estate, net		1,119,952			1,227,484			1,537,289			2,750,269
Income tax expense		(349,074	)		(259,285	)		(497,527	)		(524,524	)
Total other income (expense), net		(167,452	)		(24,533	)		(24,219	)		288,905
Net income (loss)		(204,752	)		418,046			(813,211	)		798,236
Less: Income attributable to noncontrolling interests		(1,094,852	)		(709,202	)		(1,481,933	)		(1,917,878	)
Net loss attributable to Presidio Property Trust, Inc. stockholders	$	(1,299,604	)	$	(291,156	)	$	(2,295,144	)	$	(1,119,642	)
Less: Preferred Stock Series D dividends		(532,285	)		(539,056	)		(1,067,733	)		(1,078,111	)
Less: Series A Warrant dividend		—			—			—			(2,456,512	)
Net loss attributable to Presidio Property Trust, Inc. common stockholders	$	(1,831,889	)	$	(830,212	)	$	(3,362,877	)	$	(4,654,265	)

Net loss per share attributable to Presidio Property Trust, Inc. common stockholders:
Basic & Diluted	$	(0.15	)	$	(0.07	)	$	(0.28	)	$	(0.39	)

Weighted average number of common shares outstanding - basic & diluted		11,839,359			11,799,689			11,837,020			11,786,741

CONSOLIDATED STATEMENT OF CASH FLOWS

Presidio Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net (loss) income	$	(813,211	)	$	798,236
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		2,702,403			2,655,418
Stock compensation		540,501			568,701
Bad debt expense		32,729			13,416
Gain on sale of real estate assets, net		(1,537,289	)		(2,750,269	)
Net change in fair value marketable securities		(190,327	)		358,658
Net change in fair value SPAC Trust Account		(939,522	)		(201,767	)
Amortization of financing costs		187,303			125,850
Amortization of below-market leases		(2,487	)		(27,445	)
Straight-line rent adjustment		(240,007	)		(46,305	)
Changes in operating assets and liabilities:
Other assets		(399,159	)		317,942
Accounts payable and accrued liabilities		239,297			(1,423,341	)
Accounts payable and accrued liabilities for the SPAC		(281,723	)		138,645
Accrued real estate taxes		(902,217	)		(987,636	)
Net cash used in operating activities		(1,603,709	)		(459,897	)
Cash flows from investing activities:
Real estate acquisitions		(12,932,128	)		(4,646,330	)
Additions to buildings and tenant improvements		(1,001,836	)		(832,990	)
Investment in marketable securities		(1,826,458	)		(661,247	)
Proceeds from sale of marketable securities		1,951,095			1,111,608
Investment of SPAC IPO proceeds into Trust Account		(389,942	)		(134,895,000	)
Withdrawals from Trust Account for SPAC taxes		792,480			—
Withdrawals from Trust Account for Redemption of SPAC Shares		114,068,280			—
Deletions / (additions) to deferred leasing costs		3,872			(35,864	)
Proceeds from sales of real estate, net		4,590,187			18,839,913
Net cash provided by (used in) investing activities		105,255,550			(121,119,910	)
Cash flows from financing activities:
Proceeds from mortgage notes payable, net of issuance costs		12,848,849			12,590,235
Repayment of mortgage notes payable		(6,417,278	)		(7,361,659	)
Payment of deferred offering costs		—			(3,201,266	)
Distributions to noncontrolling interests, net		(1,961,310	)		(2,614,352	)
Proceeds from initial public offering of SPAC		—			132,250,000
Redemption of SPAC shares		(114,068,280	)		—
Repurchase of Series A Common Stock, at cost		—			(30,729	)
Repurchase of Series D Preferred Stock, at cost		(211,872	)		—
Dividends paid to Series D Preferred Stockholders		(1,067,733	)		(1,078,112	)
Dividends paid to Series A Common Stockholders		(590,151	)		(2,609,454	)
Net cash (used in) provided by financing activities		(111,467,775	)		127,944,663
Net (decrease) increase in cash equivalents and restricted cash		(7,815,934	)		6,364,856
Cash, cash equivalents and restricted cash - beginning of period		16,516,725			14,702,089
Cash, cash equivalents and restricted cash - end of period	$	8,700,791		$	21,066,945
Supplemental disclosure of cash flow information:
Interest paid-mortgage notes payable	$	2,351,642		$	1,971,942
Non-cash financing activities:
Deferred offering cost SPAC, underwriting commission payable	$	—		$	4,628,750
Accrued excise tax on January 24, 2023 SPAC redemptions	$	1,140,683		$	—
Dividends payable - Preferred Stock Series D	$	177,145		$	179,685

EBITDAre RECONCILIATION

	For 3 Months Ended Jun 30,						For 6 Months Ended Jun 30,
	2023			2022			2023			2022
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(1,831,889	)	$	(830,212	)	$	(3,362,877	)	$	(4,654,265	)
Adjustments
Interest Expense		1,336,415			1,085,861			2,204,182			2,103,573
Depreciation and Amortization		1,367,585			1,302,471			2,699,916			2,627,973
Net loss (gain) on sale of real estate		(1,119,952	)		(1,227,484	)		(1,537,289	)		(2,750,269	)
Income Taxes		349,074			259,285			497,527			524,524

EBITDAre	$	101,233		$	589,921		$	501,459		$	(2,148,464	)

FFO AND CORE FFO RECONCILIATION

	For the Three Months Ended						For the Six Months Ended
	6/30/2023			6/30/2022			6/30/2023			6/30/2022
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(1,831,889	)	$	(830,212	)	$	(3,362,877	)	$	(4,654,265	)
Adjustments:
Income attributable to noncontrolling interests		1,094,852			709,202			1,481,933			1,917,878
Depreciation and amortization		1,368,829			1,316,193			2,702,403			2,655,418
Amortization of above and below market leases, net		(1,244	)		(13,722	)		(2,487	)		(27,445	)
Loss (gain) on sale of real estate assets, net		(1,119,952	)		(1,227,484	)		(1,537,289	)		(2,750,269	)
FFO	$	(489,404	)	$	(46,023	)	$	(718,317	)	$	(2,858,683	)
Restricted stock compensation		279,656			280,981			540,501			568,700
Series A Warrant dividend		-			-			-			2,456,512
Core FFO	$	(209,748	)	$	234,958		$	(177,816	)	$	166,529

Weighted average number of common shares outstanding - basic and diluted		11,839,359			11,799,689			11,837,020			11,786,741

Core FFO / Wgt Avg Share	$	(0.018	)	$	0.020		$	(0.015	)	$	0.014

Quarterly Dividends / Share	$	0.023		$	0.106		$	0.045		$	0.211

SEGMENT DATA

DEFINITIONS – NON-GAAP MEASUREMENTS

EBITDAre - EBITDAre is defined by NAREIT as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs.

Funds from Operations (“FFO”) – The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO, a non-GAAP measure, as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

Core Funds from Operations (“Core FFO”) – We calculate Core FFO, a non-GAAP measure, by using FFO as defined by NAREIT and adjusting for certain other non-core items. We also exclude from our Core FFO calculation acquisition costs, loss on early extinguishment of debt, changes in the fair value of the earn-out, changes in fair value of contingent consideration, non-cash warrant dividends and the amortization of stock-based compensation.

Cover	Aug. 14, 2023
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 14, 2023
Entity File Number	001-34049
Entity Registrant Name	Presidio Property Trust, Inc.
Entity Central Index Key	0001080657
Entity Tax Identification Number	33-0841255
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	4995 Murphy Canyon Road
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92123
City Area Code	(760)
Local Phone Number	471-8536
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Information, Former Legal or Registered Name	Not Applicable
Series A Common Stock, $0.01 par value per share
Title of 12(b) Security	Series A Common Stock, $0.01 par value per share
Trading Symbol	SQFT
Security Exchange Name	NASDAQ
9.375% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share
Title of 12(b) Security	9.375% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share
Trading Symbol	SQFTP
Security Exchange Name	NASDAQ
Series A Common Stock Purchase Warrants to Purchase Shares of Common Stock
Title of 12(b) Security	Series A Common Stock Purchase Warrants to Purchase Shares of Common Stock
Trading Symbol	SQFTW
Security Exchange Name	NASDAQ