Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

You should read the following management's discussion and analysis of our financial condition and results of operations in conjunction with our unaudited financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed on March 31, 2026 (the "2025 10-K") with the U.S. Securities and Exchange Commission (the "SEC"). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Cautionary Statement Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q. You should review the disclosure under Part 1, Item 1A of the 2025 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. References in this Quarterly Report on Form 10-Q to the "Registrant" or the "Trust" refer to Power REIT and "we," "us," "our" and "Power REIT" refer to Power REIT, together with its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Report") includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words "believe," "expect," "will," "anticipate," "intend," "estimate," "project," "plan," "assume" or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words. All statements contained in this Report regarding our future strategy, future operations, projected financial position, estimated future revenues, projected costs, future prospects, the future of our industries and results that might be obtained by pursuing management's current or future plans and objectives are forward-looking statements.

You should not place undue reliance on any forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control, including those identified below, under Part II, Item 1A. "Risk Factors" and elsewhere in this Report, and those identified under Part I, Item 1A of the 2025 10-K. Our forward-looking statements are based on the information currently available to us and speak only as of the date of the filing of this Report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these matters or how they may affect us. Over time, our actual results, performance, financial condition or achievements may differ from the anticipated results, performance, financial condition or achievements that are expressed or implied by our forward-looking statements, and such differences may be significant and materially adverse to our security holders. Our forward-looking statements contained herein speak only as of the date hereof, and we make no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations.

Overview

We are a Maryland-domiciled, internally-managed real estate investment trust (a "REIT") that owns a portfolio of real estate assets related to transportation, energy infrastructure and Controlled Environment Agriculture ("CEA") in the United States.

We are structured as a holding company and own our assets through seventeen direct and indirect wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. As of March 31, 2026, our assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by our subsidiary Pittsburgh & West Virginia Railroad ("P&WV"), approximately 447 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 82 Megawatts ("MW") and approximately 77 acres of land with approximately 330,000 square feet of CEA properties in the form of greenhouses (the "Greenhouse Portfolio)

During the three months ended March 31, 2026, the Trust did not declare a quarterly dividend of approximately $163,000 ($0.484375 per share per quarter) to holders of Power REIT's 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Stock").

Our primary objective is to maximize the long-term value for our shareholders. To that end, our business goals are to obtain the best possible rental income at our properties in order to maximize our cash flows, net operating income, funds from operations, funds available for distribution to shareholders and other operating measures and results, and ultimately to maximize the values of our properties.

To achieve this primary goal, we have developed a business strategy focused on increasing the values of our properties, and ultimately of the Trust, which includes:

● Raising capital by monetizing the embedded value in our portfolio to improve our liquidity position and, as appropriate reducing debt levels to strengthen our balance sheet;

● Selling off non-core properties and underperforming assets;

● Seeking to re-lease properties that are vacant or have non-performing tenants

● Seeking to minimize the carrying costs related to the Greenhouse Portfolio given the speculative nature of valuing these asset;

● Raising the overall level of quality of our portfolio and of individual properties in our portfolio;

● Improving the operating results of our properties; and

●Taking steps to position ourselves for future growth opportunities.

Recent Events

On February 11, 2026, the PW CO CanRE Mav 14 LLC ("Mav 14") property was sold at action. As part of the sale, the Trust wrote off accrued property tax of approximately $61,000 and recognized a total loss of approximately $494,000.

Improving Our Balance Sheet by Reducing Debt and Leverage; Maintaining Liquidity

Leverage

We continue to seek ways to reduce our debt and debt leverage by improving our operating performance and through a variety of other means available to us. These means might include leasing vacant properties, selling properties, raising capital or through other actions.

Capital Recycling

In the later part of 2022, we commenced property reviews to establish a plan for the portfolio and, where appropriate, have been disposing of and seeking to dispose of properties that we do not believe meet financial and strategic criteria given economic, market and other circumstances. Disposing of these properties can enable us to redeploy or recycle our capital to other uses, such as to repay debt, to reinvest in other real estate assets and development and redevelopment projects, and for other corporate purposes. Along these lines, in 2023 and 2024 we completed sales of assets for total gross proceeds of approximately $9.81 million which included approximately $2.1 million of seller financing provided to the buyers. During 2025, we completed sales of assets for total gross proceeds of approximately $325,000 which included approximately $105,000 of seller financing provided to a buyer. We also have several properties that we are marketing for sale and/or lease which have been classified as "Assets Held for Sale."

Improving Our Portfolio

We are currently seeking to refine our property holdings by selling greenhouse properties and/or re-leasing them in an effort to improve the overall performance going forward. Effective April 11, 2025, we closed on a settlement agreement with the lender for the Greenhouse Loan, which resulted in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan. The transaction also relieved the ongoing costs associated with maintaining the Nebraska and Michigan properties. We will continue to seek to realize value from the retained assets. This will include entering into new leases and selling properties based on market conditions. We will also continue to focus on improving cash collections from existing tenants. In addition, we are exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

Taking Steps to Position the Company for Future Growth Opportunities

We are taking steps designed to position ourselves to create shareholder value. In connection therewith, we have implemented processes designed to ensure strong internal discipline in the use, harvesting and recycling of our capital, and these processes will be applied in connection with seeking to reposition properties.

We may seek to acquire, in an opportunistic, selective and disciplined manner, properties that have operating metrics that are better than or equal to our existing portfolio averages, and that we believe have strong potential for increased cash flows and appreciation in value. Taking advantage of any acquisition opportunities would likely involve some use of debt or equity capital. We will pursue transactions that we expect can meet the financial and strategic criteria we apply, given economic, market and other circumstances. In addition, we are exploring the potential to use our existing corporate structure for strategic transactions including potentially merging assets or companies with us. The Trust is also exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

The following table is a summary of our properties as of March 31, 2026:

Property Type/Name		Acres				Size1				Gross Book Value2
Railroad Property
P&WV - Norfolk Southern							112 miles			$	9,150,000
Solar Farm Land
California
PWRS			447				82				9,183,548
Solar Total			447				82			$	9,183,548
Greenhouse - Cannabis
Ordway, Colorado
Maverick 15,6			5.20				17,368				1,594,582
Tamarack 73,5			4.32				18,000				1,364,585
Tamarack 7 (MIP)3,4,5											636,351
Tamarack 193,5,6			2.11				18,528				1,311,116
Tamarack 8 - Apotheke4,5			4.31				21,548				2,061,542
Tamarack 35,6			2.20				24,512				2,080,414
Tamarack 27 and 283,5,6			4.00				38,440				1,872,340
Maverick 5 - Jacksons Farms4,5			5.20				15,000				1,358,634
Tamarack 4 and 53,5,6			4.41				26,076				2,239,870
Mortgage Loan											859,761
Mortgage Loan											92,670
Walsenburg, Colorado 3,5,6			35.00				74,800				4,219,170
Desert Hot Springs, California3,5,6			0.85				35,505				7,685,000
Vinita, Oklahoma3,5,6			9.35				40,000				2,593,313
Eliot, ME - Mortgage Loan5,7											597,000
Greenhouse Total			76.95	#			329,777			$	30,566,348
Total Portfolio										$	48,899,896
Impairment and Allowance for Receivable											20,895,269
Depreciation and Amortization											4,985,090
Net Book Value Net of Impairment, Allowance for Receivable, Depreciation and Amortization										$	23,019,537

¹ Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet

² Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs

³Property is vacant

⁴Tenant is not current on rent/in default

⁵An impairment/allowance for receivable has been taken against this asset

⁶Asset held for sale

⁷Loan is in default

Critical Accounting Estimates

The consolidated financial statements are prepared in conformity with accounting principles and generally accepted in the United States of America ("GAAP"), which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results may differ from the original estimates, requiring adjustments to these balances in future periods. None of the estimates are considered critical accounting estimates.

Results of Operations

Three Months Ended March 31, 2026 and 2025

Revenue

Revenue during the three months ended March 31, 2026 and 2025 was $480,436 and $485,794, respectively. Revenue during the three months ended March 31, 2026, consisted of rental income of $215,679, direct financing lease income of $228,750, and other income of $36,007. The decrease in total revenue was due to an increase in rental income of $4,900 and a decrease in other income of $10,258.

During the three months ended March 31, 2026, the Trust's revenue was concentrated from certain tenants. For the three months ended March 31, 2026, Power REIT collected approximately 96% of its rental income and lease income from direct financing lease from the tenants of two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 51% and 45% of rental income and lease income from direct financing lease, respectively. For the three months ended March 31, 2025, Power REIT collected approximately 98% of its rental income and lease income from direct financing lease from two properties. The tenants were Norfolk Southern Railway and Regulus Solar LLC which represented 52% and 46% of rental income and lease income from direct financing lease, respectively.

Expenses

Expenses for the three months ended March 31, 2026 compared to the same period in 2025 decreased by $1,024,395 to $845,441, primarily due to a decrease in interest expense of $757,059 due to the settlement of the Greenhouse Loan and a decrease in property expenses and taxes of $401,986 and to a lesser extent, a decrease in general and administrative expense of $120,867, offset by an increase in impairment expense of $247,353 and an increase in depreciation expense of $8,164.

Our non-property related expenses, are for general and administrative expenses, which consist principally of insurance, legal and other professional fees, consultant fees, NYSE American listing fees, shareholder service company fees and auditing costs as well as property related expenses that are not covered by tenants.

Other Expense

Other income increased by $499,197 primarily due to a loss on sale of properties of $493,890, and by an unrealized loss on marketable securities of $5,307.

Net Loss Attributable to Common Shareholders

Net loss attributable to common shareholders during the three months ended March 31, 2026 was $1,056,479 compared to a net loss of $1,576,319 for the three months ended March 31, 2025, a decrease of $519,840.

Liquidity and Capital Resources

Our cash, cash equivalents and restricted cash totaled $2,036,085 as of March 31, 2026, a decrease of $199,221 from December 31, 2025. Our current loan liabilities totaled approximately $770,000 as of March 31, 2026 as compared to approximately $759,000 as of December 31, 2025.

Effective April 11, 2025, we entered into a settlement agreement with the lender under the Greenhouse Loan that resulted in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan. The transaction also relieves the ongoing costs associated with maintaining the Nebraska and Michigan properties.

We are not current on payment of property taxes for the Greenhouse Portfolio. These taxes are included on the Balance Sheet as accrued expenses and liabilities held for sale of approximately $1,310,000. If the property taxes remain delinquent, the remaining Greenhouse Portfolio will be subject to tax foreclosure actions.

On January 24, 2025, the Trust entered into a sales agreement (the "Sales Agreement"), with A.G.P./Alliance Global Partners ("AGP") pursuant to which it may, from time to time, issue and sell its common shares in an "at the market offering," however, AGP is not obligated to sell any common shares and there are limits on the dollar amount of common shares it can sell pursuant to the Sales Agreement. In addition, the Trust's ability to raise capital through the sale of securities may be limited by the rules of the SEC and NYSE American LLC ("NYSE American") that place limits on the number and dollar amount of securities that may be sold. There can be no assurances that the Trust will be able to raise the funds needed, especially in light of the fact that its ability to sell securities registered on its registration statement on Form S-3 will be limited until such time as the market value of the Trust's voting securities held by non-affiliates is $75 million or more. As of March 31, 2026, 282,613 common shares have been sold pursuant to the Sales Agreement. During the three months ended March 31, 2026, the Trust sold 10,781 common shares pursuant to the Sales Agreement for net proceeds of $10,945.

During the three months ended March 31, 2026, we generated approximately $55,000 of cash from debt service related to the seller financing provided in 2024 and 2025. The remaining seller financing agreements have a combined remaining balance of $962,431 as of March 31, 2026.

We will continue to seek to maximize value from the retained assets. This will include entering into new leases and selling properties based on market conditions. We will also continue to focus on improving cash collections from existing tenants. In addition, we are exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

Cash Used in Operating Activities

During the three months ended March 31, 2026 and 2025, cash used in operating activities was $147,117 and $436,648, respectively. The decrease in cash used is primarily due to a smaller net loss during the three months ending March 31, 2026, as well as favorable changes in working capital, including a decrease in prepaid expense, stock-based compensation and a decrease in accrued expenses.

Our cash outlays at Power REIT (parent company) consist principally of professional fees, consultant fees, NYSE American listing fees, legal, insurance, shareholder service company fees, auditing costs and general and administrative expenses. Our cash outlays related to our various property-owning subsidiaries consist principally of principal and interest expense on debts, property maintenance, property taxes, insurance, legal as well as other property related expenses that are not covered by tenants. To the extent we need to raise additional capital to meet our obligations, there can be no assurance that financing on favorable terms will be available when needed. Although we entered into the Sales Agreement the rules of the SEC and NYSE American place limits on the number and dollar amount of securities that may be sold. There can be no assurances that we will be able to raise the funds needed. If we are unable to sell certain assets when anticipated at prices anticipated, we may not have sufficient cash to fund operations and commitments beyond the next twelve months.

Cash Provided By Investing Activities

Cash provided by investing activities during for the three months ended March 31, 2026 and 2025 were $28,604 and $92,260, respectively. The decrease of $63,656 is mainly due to lower proceeds from property sales and no purchases of marketable securities, and, to a lesser extent, less cash received from mortgage loans for the three months ended Marh 31, 2026 as compared to 2025.

Cash Used/Provided By Financing Activities

Cash used in financing activities during the three months ended March 31, 2026 was $80,708, compared to $146,013 generated by financing activities during the same period in the prior year. The decrease of $226,721 is primarily due to lower proceeds received from debt and lower principal payments on long-term debt and, partially offset by proceeds received from the sale of common shares pursuant to the Sales Agreement during the quarter ended March 31, 2026.

FUNDS FROM OPERATIONS - NON-GAAP FINANCIAL MEASURES

We assess and measure our overall operating results based upon an industry performance measure referred to as Core Funds From Operations ("Core FFO") which our management believes to be a useful indicator of our operating performance. Core FFO is a non-GAAP financial measure. Core FFO should not be construed as a substitute for net income (loss) (as determined in accordance with GAAP) for the purpose of analyzing our operating performance or financial position, as Core FFO is not defined by GAAP. The following is a definition of this measure, an explanation as to why we present it and, at the end of this section, a reconciliation of Core FFO to the most directly comparable GAAP financial measure.

Our management believes that Core FFO is a useful supplemental measure of our operating performance. Our management believes that alternative measures of performance, such as net income computed under GAAP, or Funds From Operations computed in accordance with the definition used by the National Association of Real Estate Investment Trusts ("NAREIT"), include certain financial items that are not indicative of the results provided by our asset portfolio and inappropriately affect the comparability of our period-over-period performance. These items include non-recurring expenses, and certain non-cash expenses, including amortization and certain upfront financing costs. Therefore, management uses Core FFO and defines it as net income excluding such items. We believe that Core FFO is a useful supplemental measure for the investing community to employ, including when comparing us to other REITs that disclose similarly computed Core FFO figures, and when analyzing changes in our performance over time. Readers are cautioned that other REITs may use different adjustments to their GAAP financial measures than we use, and that as a result, our Core FFO may not be comparable to the FFO measures used by other REITs or to other non-GAAP or GAAP financial measures used by REITs or other companies.

A reconciliation of our Core FFO to net income for the three months ended March 31, 2026 and 2025 is included in the table below:

CORE FUNDS FROM OPERATIONS (FFO)

(Unaudited)

		Three Months Ended March,
		2026				2025
Revenue		$	480,436			$	485,794
Net Income (Loss)		$	(893,272	)		$	(1,413,112	)
Stock-Based Compensation			-				143,213
Interest Expense - Amortization of Debt Costs			7,848				7,847
Amortization of Intangible Lease Asset			56,872				56,872
Depreciation on Land Improvements			10,866				-
Impairment Expense			247,353				-
Loss on sale of property			493,890				-
Core FFO Available to Preferred and Common Stock			(76,443	)			(1,205,180	)
Preferred Stock Dividends			(163,207	)			(163,207	)
Core FFO Available to Common Shares		$	(239,650	)		$	(1,368,387	)
Weighted Average Shares Outstanding (basic)			3,672,274				3,389,661
Core FFO per Common Share			(0.07	)			(0.40	)