Power REIT Narrows Losses, Sheds Debt with Asset Sales

TL;DR

**Power REIT is cleaning house, ditching bad cannabis assets and slashing debt, which is a bullish sign for long-term stability despite revenue dips.**

AI Summary

Power REIT reported a significant turnaround in net income for the three months ended September 30, 2025, achieving a net income of $223,551 compared to a net loss of $325,015 in the prior-year period. However, for the nine months ended September 30, 2025, the company still posted a net loss of $868,648, a substantial improvement from the $21,547,182 net loss in the same period of 2024. Total revenue decreased significantly, falling from $1,426,112 in Q3 2024 to $513,110 in Q3 2025, and from $2,480,073 to $1,505,687 for the nine-month periods, primarily due to the absence of rental income from related parties in 2025. Key business changes include the resolution of the Greenhouse Loan default on April 11, 2025, through deeds-in-lieu of foreclosure for Michigan and Nebraska properties, resulting in a non-cash gain of approximately $1,093,000 and the write-off of $16,904,000 in properties and $17,997,000 in debt. The company also sold two cannabis-related greenhouse properties in Ordway, Colorado, for $125,000 and $200,000, respectively. Total assets decreased from $46,102,638 at December 31, 2024, to $27,955,657 at September 30, 2025, largely due to the reclassification of assets held for sale from $24,335,236 to $6,406,602 and the resolution of the Greenhouse Loan. Strategic outlook involves continuing to realize value from retained assets by leasing and/or selling.

Why It Matters

Power REIT's strategic shift away from its troubled Greenhouse Portfolio, evidenced by the resolution of the Greenhouse Loan and property sales, is a critical move for investors seeking stability. The significant reduction in net loss from $21.5 million to $0.87 million year-over-year, despite declining revenue, suggests a focus on debt reduction and asset optimization. This could signal a more sustainable path for the REIT, potentially attracting new investors wary of its previous high-risk cannabis exposure. For employees and customers, the divestment of non-performing assets might lead to a more focused and stable operational environment, though the impact on specific properties is localized. Competitively, shedding underperforming assets could allow Power REIT to better compete in its remaining transportation and energy infrastructure segments.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant reduction in total assets from $46.1 million to $27.9 million, indicating a substantial restructuring and divestment of properties. While the company recognized a non-cash gain of approximately $1,093,000 from debt extinguishment, the substantial decrease in rental income and the ongoing accumulated deficit of $50,557,311 as of September 30, 2025, highlight continued financial challenges and a need for sustained profitability.

Analyst Insight

Investors should monitor Power REIT's ability to generate consistent revenue and positive cash flow from its remaining railroad and solar assets. The resolution of the Greenhouse Loan is a positive step, but the company needs to demonstrate a clear path to profitability and dividend reinstatement for its Series A Preferred Stock, which has accumulated undeclared dividends of $1.45 per share for the nine months ended September 30, 2025.

Financial Highlights

debt To Equity

N/A

revenue

$1,505,687

operating Margin

N/A

total Assets

$27,955,657

total Debt

N/A

net Income

$223,551

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

-39.3%

Revenue Breakdown

Key Numbers

• $223,551 — Net Income (Q3 2025) (Turnaround from a $325,015 net loss in Q3 2024)
• $(868,648) — Net Loss (9M 2025) (Significant improvement from a $(21,547,182) net loss in 9M 2024)
• $1,505,687 — Total Revenue (9M 2025) (Decrease from $2,480,073 in 9M 2024)
• $1,092,670 — Gain on extinguishment of debt (9M 2025) (Non-cash gain from resolving the Greenhouse Loan)
• $16,904,000 — Properties written off (Related to deeds-in-lieu of foreclosure for Michigan and Nebraska properties)
• $17,997,000 — Greenhouse Loan balance written off (Elimination of significant debt obligation)
• $27,955,657 — Total Assets (Sep 30, 2025) (Decrease from $46,102,638 at Dec 31, 2024, reflecting asset divestment)
• $50,557,311 — Accumulated Deficit (Sep 30, 2025) (Indicates ongoing historical losses)
• $0.48 — Accumulated undeclared dividend per Series A Preferred Share (Q3 2025) (No dividends declared for preferred shareholders)
• 3,389,661 — Common Shares Outstanding (Consistent share count as of September 30, 2025 and December 31, 2024)

Key Players & Entities

• Power REIT (company) — Registrant and Maryland-domiciled REIT
• Pittsburgh & West Virginia Railroad (company) — Subsidiary owning 112 miles of railroad infrastructure
• PW CO CanRE MF LLC (company) — Wholly owned subsidiary that sold a cannabis property
• PW CO CanRE JAB LLC (company) — Wholly owned subsidiary that sold a cannabis property
• SEC (regulator) — Securities and Exchange Commission
• $223,551 (dollar_amount) — Net income for the three months ended September 30, 2025
• $868,648 (dollar_amount) — Net loss for the nine months ended September 30, 2025
• $1,093,000 (dollar_amount) — Non-cash gain on extinguishment of debt
• $16,904,000 (dollar_amount) — Write-off of Nebraska and Michigan properties
• $17,997,000 (dollar_amount) — Remaining balance of the Greenhouse Loan written off

FAQ

Risk Factors

• Debt Resolution and Asset Write-offs [high — financial]: The company resolved the Greenhouse Loan default through deeds-in-lieu of foreclosure, resulting in the write-off of $16,904,000 in properties and $17,997,000 in debt. This significantly reduced total assets from $46,102,638 to $27,955,657.
• Dependence on Divestment Strategy [medium — operational]: The company's strategy relies on realizing value from retained assets through leasing and/or selling. The success of this strategy is dependent on market conditions and the ability to find buyers or lessees for its properties.
• Accumulated Deficit [medium — financial]: As of September 30, 2025, the company has an accumulated deficit of $50,557,311, indicating a history of net losses. While Q3 2025 showed a net income, the nine-month period still resulted in a net loss.
• Property Divestitures and Foreclosures [medium — legal]: The resolution of the Greenhouse Loan involved deeds-in-lieu of foreclosure for Michigan and Nebraska properties, and the sale of two cannabis-related greenhouse properties. These actions indicate potential past issues with property performance or loan compliance.
• Revenue Decline from Related Parties [medium — financial]: The significant decrease in total revenue, from $2,480,073 to $1,505,687 for the nine months ended September 30, 2025, is primarily attributed to the absence of rental income from related parties. This raises questions about the sustainability of revenue streams without these related-party transactions.

Industry Context

Power REIT operates within the real estate investment trust (REIT) sector, with a specific focus on greenhouse and cannabis-related properties. The industry is subject to evolving regulations, particularly concerning cannabis, and faces competition for suitable properties and financing. The shift in rental income from related parties suggests a potential restructuring or change in operational strategy within this niche market.

Regulatory Implications

The company's past involvement with cannabis-related properties may expose it to regulatory scrutiny, especially given the varying legal landscape of cannabis across different jurisdictions. The resolution of loan defaults through deeds-in-lieu also highlights the importance of compliance and financial stability in this sector.

What Investors Should Do

1. Monitor revenue sustainability without related-party income.
2. Evaluate the success of the asset divestment strategy.
3. Analyze the impact of debt and asset write-offs on future profitability.
4. Assess the company's path to profitability given the accumulated deficit.

Key Dates

• 2025-04-11: Resolution of Greenhouse Loan default — Resolved a significant debt obligation through deeds-in-lieu of foreclosure, resulting in substantial non-cash gains and asset/debt write-offs, fundamentally restructuring the balance sheet.
• 2025-09-30: End of Q3 2025 — Reported a net income of $223,551, a significant turnaround from the prior year's Q3 loss, but the nine-month period still shows a net loss of $868,648.
• 2024-09-30: End of Q3 2024 — Reported a net loss of $325,015 for the quarter and a substantial net loss of $21,547,182 for the nine-month period.
• 2024-12-31: End of Fiscal Year 2024 — Total assets stood at $46,102,638 prior to the significant asset and debt restructuring in 2025.

Glossary

Deeds-in-lieu of foreclosure

A process where a borrower voluntarily transfers ownership of a property to the lender to avoid foreclosure proceedings. (This was the method used by Power REIT to resolve its Greenhouse Loan default, leading to significant asset and debt write-offs.)

Accumulated Deficit

The cumulative net losses of a company over its lifetime that have not been offset by net income. (Power REIT has an accumulated deficit of $50,557,311 as of September 30, 2025, indicating historical unprofitability.)

Non-cash gain

A gain that does not involve the receipt of cash, such as a gain from debt extinguishment or asset revaluation. (The company recognized a non-cash gain of approximately $1,093,000 from resolving the Greenhouse Loan.)

Assets held for sale

Assets that a company intends to sell within one year, which are reported separately on the balance sheet. (The reclassification of assets held for sale significantly impacted the decrease in total assets reported.)

Year-Over-Year Comparison

Power REIT has reported a significant financial turnaround in the third quarter of 2025, moving from a net loss of $325,015 in Q3 2024 to a net income of $223,551 in Q3 2025. However, this improvement is overshadowed by a substantial decrease in total revenue, which fell from $1,426,112 in Q3 2024 to $513,110 in Q3 2025, primarily due to the cessation of related-party rental income. The company also underwent a major balance sheet restructuring, writing off significant property and debt values related to loan defaults, leading to a considerable reduction in total assets from $46,102,638 at the end of 2024 to $27,955,657 by September 30, 2025.

Key Financial Figures

• $25 — Preferred Stock, Liquidation Preference $25 per Share PW.A NYSE American, LLC
• $25.00 — ble Perpetual Preferred Stock Par Value $25.00 Common Shares Additional Paid-in Ac

Filing Documents

• form10-q.htm (10-Q) — 896KB
• ex31-1.htm (EX-31.1) — 11KB
• ex32-1.htm (EX-32.1) — 6KB
• 0001493152-25-019229.txt ( ) — 5434KB
• pw-20250930.xsd (EX-101.SCH) — 37KB
• pw-20250930_cal.xml (EX-101.CAL) — 65KB
• pw-20250930_def.xml (EX-101.DEF) — 195KB
• pw-20250930_lab.xml (EX-101.LAB) — 408KB
• pw-20250930_pre.xml (EX-101.PRE) — 323KB
• form10-q_htm.xml (XML) — 774KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 3

– Financial Statements (Unaudited)

Item 1 – Financial Statements (Unaudited) 3 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 6 Notes to Unaudited Consolidated Financial Statements 7

– Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations 22

– Quantitative and Qualitative Disclosures About Market Risk

Item 3 – Quantitative and Qualitative Disclosures About Market Risk 28

– Controls and Procedures

Item 4 – Controls and Procedures 28

– OTHER INFORMATION

PART II – OTHER INFORMATION 29

– Legal Proceedings

Item 1 – Legal Proceedings 29

– Risk Factors

Item 1A – Risk Factors 30

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 32

– Defaults Upon Senior Securities

Item 3 – Defaults Upon Senior Securities 33

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 33

– Other Information

Item 5 – Other Information 33

– Exhibits

Item 6 – Exhibits 33 SIGNATURE 34 2 POWER REIT AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, 2025 December 31, 2024 ASSETS Land $ 4,730,741 $ 4,751,010 Greenhouse cultivation and processing facilities, net of accumulated depreciation 1,143,564 1,189,195 Net investment in direct financing lease - railroad 9,150,000 9,150,000 Total real estate assets 15,024,305 15,090,205 Cash and cash equivalents 1,993,495 2,194,502 Restricted cash - 37,084 Prepaid expenses and deposits 230,850 207,177 Intangible lease asset, net of accumulated amortization 2,106,317 2,276,933 Deferred rent receivable 324,107 338,106 Mortgage loan 1,604,265 1,602,000 Assets held for sale 6,406,602 24,335,236 Other assets 265,716 21,395 TOTAL ASSETS $ 27,955,657 $ 46,102,638 LIABILITIES AND EQUITY Accounts payable $ 226,405 $ 173,700 Accrued expenses 192,299 166,320 Other liabilities 8,177 - Liabilities held for sale 1,260,393 1,599,477 Current portion of long-term debt, net of unamortized discount 750,231 17,445,220 Long-term debt, net of unamortized discount 19,299,760 19,965,043 TOTAL LIABILITIES 21,737,265 39,349,760 Equity: Series A 7.75 % Cumulative Redeemable Perpetual Preferred Stock Par Value $ 25.00 ( 1,675,000 shares authorized; 336,944 issued and outstanding as of September 30, 2025 and December 31, 2024) 8,489,952 8,489,952 Common Shares, $ 0.001 par value ( 98,325,000 shares authorized; 3,389,661 shares issued and outstanding as of September 30, 2025 and December 31, 2024) 3,389 3,389 Additional paid-in capital 48,282,362 47,948,200 Accumulated deficit ( 50,557,311 ) ( 49,688,663 ) Total Equity 6,218,392 6,752,878 TOTAL LIABILITIES AND EQUITY $ 27,955,657 $ 46,102,638 The accompanying notes are an integral part of these unaudited consolidated financial statements. 3 POWER REIT AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

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