PW

Power REIT 10-Q Summary: Period Ended June 30, 2026

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026, for Power REIT, a Maryland-domiciled REIT owning transportation, energy infrastructure, and Controlled Environment Agriculture (CEA) assets. The portfolio includes approximately 112 miles of railroad infrastructure, 447 acres of solar land, and a greenhouse portfolio. Notably, on June 2, 2026, the company executed a 1-for-10 reverse stock split. All share and per-share data presented herein are retroactively adjusted to reflect this split.

Key Financial Metrics

Material Changes vs. Prior Period

• Income Growth: Total income increased by approximately 78% year-over-year, driven primarily by a $786,570 increase in "Other Income" due to the full repayment of a mortgage loan receivable (PW SD) and interest income.
• Expense Reduction: Total expenses decreased by $1.54 million, largely due to a $1.09 million reduction in interest expense following the settlement of the Greenhouse Loan in April 2025 and a $572,533 decrease in property expenses and taxes.
• Impairment Charges: Impairment expense increased significantly to $366,117 for the six months ended June 30, 2026, compared to $13,600 in the prior year, related to assets held for sale.
• Dispositions: The company sold two properties in the first half of 2026 (Vinita, OK and Mav 14, CO), recognizing a combined loss of approximately $604,000.
• Debt Settlement: The Greenhouse Loan balance was reduced to $0 following a deed-in-lieu of foreclosure settlement in the prior year, eliminating associated interest costs.

Guidance, Outlook, and Risks

Management Commentary: Management states that while the company has incurred recurring losses, current cash on hand and operating cash flows are sufficient to fund capital requirements for the next twelve months. The strategy focuses on selling non-core greenhouse properties, re-leasing vacant assets, and improving cash collections. The company is exploring strategic alternatives to increase shareholder value.

Risks and Contingencies:

• Dividend Arrears: The company has not declared dividends on its Series A Preferred Stock since Q4 2022. As of June 30, 2026, approximately $2.45 million in cumulative undeclared dividends are outstanding.
• Property Tax Delinquency: The company is not current on property taxes for the Greenhouse Portfolio, with approximately $1.33 million accrued. Continued delinquency could lead to tax foreclosure.
• Internal Controls: A material weakness in internal controls regarding the accounting for complex transactions (specifically the classification of Series A Preferred Stock) remains unremediated as of June 30, 2026.
• Liquidity Constraints: The ability to raise capital via an "at-the-market" offering is limited by SEC rules until the market value of voting securities held by non-affiliates reaches $75 million.

Investor Verification Checklist

• Preferred Stock Status: Verify the exact amount of cumulative undeclared dividends on Series A Preferred Stock and the potential impact on common equity liquidation preference.
• Property Tax Liability: Confirm the status of the $1.33 million in accrued property taxes for the Greenhouse Portfolio and the risk of imminent tax foreclosure.
• Internal Control Remediation: Review the specific plan and timeline for remedying the material weakness in internal controls over financial reporting.
• Asset Disposition Progress: Monitor the sale status of the remaining "Assets Held for Sale" (approximately $5.46 million in assets) to assess liquidity generation.
• Debt Covenants: Review the terms of the remaining $19.65 million in debt (Railroad and Solar loans) for any covenants that may be triggered by continued losses or lack of dividend payments.