Business Context and Reporting Period
Company: Medalist Diversified, Inc. (formerly Medalist Diversified REIT, Inc.)
Filing Type: Form 10-K
Period: Fiscal year ended December 31, 2025
Reporting Status: Non-accelerated filer; Smaller reporting company.
Strategic Pivot: The Company revoked its REIT election effective January 1, 2026, and changed its name to Medalist Diversified, Inc. effective March 2, 2026. The primary focus is transitioning from a traditional equity REIT to a Delaware Statutory Trust (DST) sponsorship platform to generate fee income and increase assets under management. The Company is actively monetizing legacy real estate assets to fund this transition.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $10,396,618 | $9,735,127 |
| Net Loss (GAAP) | $(1,935,773) | $744,325 (Income) |
| Net Loss Attributable to Common Stockholders | $(2,388,837) | $27,524 (Income) |
| Funds from Operations (FFO) | $1,858,342 | $1,908,177 |
| Adjusted Funds from Operations (AFFO) | $716,349 | $1,372,493 |
| Cash and Restricted Cash | $4,134,070 | $6,072,736 |
| Total Mortgages Payable (Net) | $32,828,863 | $50,001,062 |
| Assets Held for Sale | $28,299,993 | $0 |
Material Changes vs. Prior Period
- Net Loss vs. Income: The Company reported a net loss of $1.94 million in 2025 compared to net income of $0.74 million in 2024. This reversal was driven by increased operating expenses (legal, accounting, and corporate G&A), impairment charges on assets held for sale ($662,394), and losses on extinguishment of debt ($430,644), partially offset by a gain on disposal of investment properties ($731,439).
- Revenue Growth: Total revenue increased by $661,491 (6.8%) to $10.4 million. This was primarily due to the acquisition of Single Tenant Net Lease (STNL) properties (Tesla Pensacola, Buffalo Wild Wings, United Rentals) and full-year contribution from the Citibank Property, offset by decreased retail revenues from property dispositions and vacancies at the Lancer Center.
- Debt Reduction: Total mortgages payable decreased by approximately $17.2 million to $32.8 million. This reduction resulted from the sale of the Salisbury Marketplace Property (proceeds used to pay down the Wells Fargo facility) and the repayment of the Farmers Line of Credit used to acquire the Tesla Pensacola Property.
- Portfolio Restructuring: Several properties (Greenbrier Business Center, Parkway, Tesla Pensacola, Hanover Square Outparcel) were reclassified as "Assets Held for Sale" totaling $28.3 million. The Company sold the Salisbury Marketplace, Buffalo Wild Wings, and United Rentals properties during the year.
Guidance, Outlook, and Risks
Outlook and Strategy: The Company is executing a strategic repositioning to build its DST Program. It intends to sell beneficial interests in DSTs holding real properties to generate fee-based income. The Company plans to selectively dispose of legacy portfolio properties to generate capital for the DST Program and may pursue non-real estate investments, including crypto assets (currently holding 3.36 Bitcoin) and marketable securities. No specific financial guidance was provided for 2026.
Key Risks and Contingencies:
- Tax Status Change: Revocation of REIT status effective January 1, 2026, subjects the Company to regular corporate income taxes, which will reduce earnings and cash available for distribution.
- Execution Risk: There is no assurance the Company will successfully execute its strategic repositioning, sell DST interests, or realize anticipated benefits from the transition.
- Liquidity and Dispositions: The ability to dispose of legacy assets on favorable terms is subject to market conditions. Delays in sales could reduce the ability to redeploy capital.
- Interest Rate Risk: Elevated interest rates increase borrowing costs and may reduce asset valuations. The Company has variable-rate debt (Parkway Property, Tesla DST Mortgage) though some is hedged.
- Crypto Asset Volatility: The Company holds Bitcoin, which is subject to significant market volatility and regulatory uncertainty.
Investor Verification Checklist
- REIT Termination Impact: Verify the specific tax implications and projected corporate tax liability for 2026 following the REIT election revocation.
- DST Program Progress: Confirm the status of the XXV DST offering (17.2% sold as of March 2, 2026) and the timeline for selling remaining beneficial interests to achieve fee income targets.
- Legacy Asset Dispositions: Monitor the closing of pending sales for the Greenbrier Business Center, Parkway, and Franklin Square properties to assess capital generation for the new strategy.
- Debt Covenants: Review compliance with debt service coverage ratios (DSCR) and liquidity covenants, particularly for the Wells Fargo Mortgage Facility and Tesla DST Mortgage, given the transition period.
- Crypto Holdings: Assess the valuation and risk exposure of the 3.36 Bitcoin holding relative to the Company's total asset base.