5 – DIRECT FINANCING LEASES AND OPERATING LEASES

Information as Lessor Under ASC Topic 842

To generate positive cash flow, as a lessor, the Trust leases its facilities to tenants in exchange for payments. The Trust’s leases for its railroad, solar farms and greenhouse cultivation facilities have lease terms ranging between 5 and 99 years. Payments from the Trust’s leases are recognized on a straight-line basis over the terms of the respective leases or on a cash basis for tenants with collectability issues. During the three ended March 31, 2026 and 2025, the Trust wrote off a net amount of $0 in straight-line rent receivable against rental income. Total revenue from its leases recognized for the three months ended March 31, 2026 and 2025 is approximately $444,000 and $439,000, respectively.

The following table provides the breakdown of revenue:

SCHEDULE OF OPERATING LEASE INCOME 

Due to significant price compression in the wholesale cannabis market, the Trust’s cannabis related tenants have experienced severe financial distress. Unfortunately, starting in 2022, collections from the CEA portfolio has diminished to a nominal amount. The Trust intends to continue to focus on maximizing the value of the CEA portfolio. This will include entering into new leases and selling properties based on market conditions. The Trust will also continue to focus on improving cash collections from existing tenants. In addition, the Trust is exploring strategic alternatives that may or may not include real estate investments in an effort to increase shareholder value.

Historically, the Trust’s revenue has been concentrated to a relatively limited number of investments, industries and lessees. For the three months ended March 31, 2026, Power REIT recognized approximately 96% of its rental income and lease income from direct financing lease from 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.

The following is a schedule by years of minimum future rentals on non-cancelable operating leases as of March 31, 2026 for assets and assets held for sale where revenue recognition is considered on a straight-line basis:

 SCHEDULE OF MINIMUM FUTURE RENTALS ON NON-CANCELABLE OPERATION LEASES