Company: SQFTP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001437749-25-010185
Chunk: 1458

Company: Presidio Property Trust, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 1458
---
 investments.

Our results of operations for the years ended December 31, 2024 and 2023 may not be indicative of those expected in future periods. Management does not expect the level of administrative expenses related to the 2024 annual meeting and the switching external auditors will be repeated in 2025.  Additionally the de-SPAC transaction in 2023 resulted in the Company having an investment in Conduit which totaled approximately $18.3 million as of December 31, 2023, with a cost basis of approximately $7.5 million.  The Company entered into a lock-up agreement with Conduit regarding the common stock held by the Company, for 180 days from the closing of the business combination which ended March 20, 2024.  Due to the declining stock price of Conduit, the Company was unable to monetize our investment.  As of December 31, 2024, the investment in Conduit was valued at approximately $0.2 million.  During 2023, elevated real estate prices in commercial real estate, increasing interest rates on lending, and compressing capitalization rates have made it challenging to acquire properties during 2024 that fit our portfolio needs.  As a result, we did not find any suitable commercial properties to acquire during 2024, but we were able to acquire 19 Model Home Properties.  Management will continue to evaluate potential acquisitions in an effort to increase our portfolio of commercial real estate and model homes.

      53

CRITICAL ACCOUNTING POLICIES

As a company primarily involved in owning income generating real estate assets, management considers the following accounting policies critical as they reflect our more significant judgments and estimates used in the preparation of our financial statements and because they are important for understanding and evaluating our reported financial results. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Impairment of Real Estate Assets. We regularly review for impairment on a property-by-property basis. Impairment is recognized on a property held for use when the expected undiscounted cash flows for a property are less than the carrying amount at which time