sqft20230331

sqft20230331_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________

FORM 10-Q

___________________________________________________________

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period from _____ to _____

001-34049

(Commission file No.)

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PRESIDIO PROPERTY TRUST, INC.

(Exact name of registrant as specified in its charter)

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Maryland		33-0841255
(State or other jurisdiction of incorporation or organization		(I.R.S. employer identification no.)

4995 Murphy Canyon Road, Suite 300, San Diego, CA 92123

(Address of principal executive offices)

(760) 471-8536

(Registrant’s telephone number, including area code)

Title of each class of registered securities	Trading Symbol(s)	Name of each exchange on which registered
Series A Common Stock,	SQFT	The Nasdaq Stock Market LLC
$0.01 par value per share

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

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

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

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Accelerated filer

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Non-accelerated filer

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Smaller reporting company

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Emerging Growth company

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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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At May 12, 2023, registrant had issued and outstanding 13,075,199 shares of its Series A Common Stock, $0.01 par value per share.

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Index			Page

Part I. FINANCIAL INFORMATION:			5
Item 1. FINANCIAL STATEMENTS:			5
Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022			5
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (unaudited)			6
Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2023 and 2022 (unaudited)			7
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited)			9
Notes to Condensed Consolidated Financial Statements (unaudited)			10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3. Quantitative and Qualitative Disclosures about Market Risk			37
Item 4. Controls and Procedures			38
Part II. OTHER INFORMATION			38
Item 1. Legal Proceedings			38
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 3. Defaults Upon Senior Securities			39
Item 4. Mine Safety Disclosures			39
Item 5. Other Information			39
Item 6. Exhibits			39
Signatures			41

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CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS

This report 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 this report and in our other filings with the Securities and Exchange Commission (the “SEC”). 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, results of operations and other financial and operating information. Forward-looking statements included in this report include, but are not limited to, statements regarding purchases and sales of properties, plans for financing and refinancing our properties, the adequacy of our capital resources, changes to the markets in which we operate, our business plans and strategies, and our payment of dividends. When used in this report, 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. Important factors that may cause actual results to differ from projections include, but are not limited to:

•

inherent risks associated with real estate investments and with the real estate industry;

•

significant competition may decrease or prevent increases in our properties' occupancy and rental rates and may reduce the value of our properties;

•

a decrease in demand for commercial space and/or an increase in operating costs;

•

failure by any major tenant (or a substantial number of tenants) to make rental payments to us because of a deterioration of their financial condition, an early termination of their lease, a non-renewal of their lease or a renewal of their lease on terms less favorable to us;

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challenging economic conditions facing us and our tenants may have a material adverse effect on our financial condition and results of operations;

•

our failure to generate sufficient cash to service and/or retire our debt obligations in a timely manner;

•

our inability to borrow or raise sufficient capital to maintain and/or expand our real estate investment portfolio;

•

adverse changes in the real estate financing markets, including potential increases in interest rates and/or borrowing costs;

•

potential losses, including from adverse weather conditions, natural disasters and title claims, may not be covered by insurance;

•

inability to complete acquisitions or dispositions and, even if these transactions are completed, failure to successfully operate acquired properties and/or sell properties without incurring significant defeasance costs;

•

our reliance on third-party property managers to manage a substantial number of our properties, brokers and/or agents to lease our properties;

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•

decrease in supply and/or demand for single family homes, inability to acquire additional model homes and increased competition to buy such properties;

•

terrorist attacks or actions and/or risks relating to information technology and cybersecurity attacks, loss of confidential information and other related business disruptions;

•

failure to continue to qualify as a REIT;

•

adverse results of any legal proceedings;

•

changes in laws, rules and regulations affecting our business;

•

the other risks and uncertainties discussed in Risk Factors in our Annual Report on Form 10-K filed with the SEC on March 28, 2023; and

•

the possibility that if any of the banking institutions in which we deposit funds ultimately fails, we may lose any amounts of our deposits over federally insured levels which could reduce the amount of cash we have available to distribute or invest and could result in a decline in our value.

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PART I — FINANCIAL INFORMATION

ITEM 1. Financial Statements

Presidio Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

		*March 31,*				*December 31,*
		*2023*

SEC Form 10-Q filed by Presidio Property Trust Inc.