Medalist Diversified (NASDAQ: MDRR) exits REIT model and sells Greenbrier
Rhea-AI Filing Summary
Medalist Diversified REIT, Inc. is exiting REIT status, repositioning its balance sheet, and reshaping its portfolio and strategy. The board authorized termination of the company’s REIT election effective January 1, 2026, removing prior share ownership limits, and the company will operate as a standard C‑corporation.
On February 13, 2026, Medalist sold the Greenbrier Business Center property in Chesapeake, Virginia for $11,000,000, using $7,000,000 of proceeds to repay existing debt. This sale follows earlier 2025 dispositions of the Salisbury Marketplace, Buffalo Wild Wings, and United Rentals properties, with unaudited pro forma financials showing the combined impact on assets, liabilities, revenue, and earnings.
The company reports it now has no indebtedness at the corporate level, with remaining obligations at the property level and limited guaranties it aims to reduce. Management estimates more than $40 million of net asset value in real estate and liquid investments, a significant portion expected to be liquid or readily deployable.
Reflecting the broader strategic shift, the company is changing its name to Medalist Diversified, Inc. effective March 2, 2026, while keeping its Nasdaq listing and ticker MDRR. The updated framework emphasizes growing a Delaware Statutory Trust sponsorship platform, investing excess liquidity in treasuries and investment‑grade securities, and preserving balance sheet capacity to pursue potential strategic acquisitions.
Positive
- None.
Negative
- None.
Insights
Medalist is simplifying its balance sheet, exiting REIT status, and reallocating capital from sold properties.
Medalist has been actively selling legacy properties, including the Greenbrier Business Center at $11,000,000, applying $7,000,000 to pay down debt. Alongside earlier sales of the Salisbury, Buffalo Wild Wings, and United Rentals assets, unaudited pro forma financials show lower investment property balances, reduced debt, and higher cash.
The company states it now carries no corporate‑level indebtedness, with remaining obligations at the property level and limited guaranties. Pro forma balance sheets as of September 30, 2025 and December 31, 2024 illustrate a shift toward more cash and lower mortgages payable, while equity and noncontrolling interests adjust to disposition gains and reduced depreciation and interest expense.
Strategically, management reports more than $40 million of net asset value in real estate and liquid investments, a significant portion expected to be liquid or readily deployable. How effectively that capital is redeployed into DST fee income, treasuries, and potential acquisitions—as outlined for 2026—will shape future earnings and risk, with further details likely in subsequent periodic reports.
Ending REIT status gives Medalist more flexibility but changes its tax and shareholder profile.
The board approved revoking REIT tax election effective January 1, 2026, shifting to C‑corporation taxation. The company cites relief from REIT constraints such as mandatory distributions and asset and income tests, and has filed a Certificate of Notice in Maryland reflecting that continued REIT qualification is no longer in its best interests.
With this move, share ownership limits in the Articles of Incorporation, including the Aggregate Share Ownership Limit, no longer apply. A name change to Medalist Diversified, Inc. effective March 2, 2026 and retention of the MDRR Nasdaq symbol underscore the repositioning. The press release links this structure to planned emphasis on DST sponsorship, a treasury investment program, and optionality for strategic acquisitions.
From an investor perspective, the shift means distributions will no longer be governed by REIT rules and taxable income will follow C‑corporation treatment. Actual economic outcomes will depend on future profitability, portfolio mix, fee income growth, and any acquisitions or further debt changes disclosed in upcoming 10‑K and 10‑Q filings.
8-K Event Classification
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 17, 2026 (
(Exact Name of Registrant as Specified in Its Charter)
|
| |||
(State or other jurisdiction of incorporation |
| (Commission File Number) |
| (I.R.S. Employer |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
| Name of each Exchange |
| Trading |
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging Growth Company
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. ¨
ITEM 1.01 | Entry Into a Material Definitive Agreement. |
As previously reported, wholly-owned subsidiaries (the “Borrower”) of Medalist Diversified Holdings, LP, a Maryland limited partnership and the operating partnership (the “Operating Partnership”) of Medalist Diversified REIT, Inc. (the “Company”) entered into a Credit Agreement, dated as of June 13, 2022 (the “Credit Agreement”), with Well Fargo Bank, National Association (the “Lender”), for a term loan (the “Term Loan”). On February 13, 2026, in connection with the disposition of the Greenbrier Business Center Property (as defined and described below), the Borrower, the Company and the Lender entered into the Fourth Amendment to the Credit Agreement (the “Credit Agreement Amendment), the Second Amended and Restated Term Note (the “Amended Term Note”), the Release of Guarantor (the “Release of Guarantor) and the Operating Partnership entered into the Continuing Guaranty (the “Guaranty” and together with the Credit Agreement Amendment, the Amended and Term Note and the Release of Guarantor, the “Amended Documents”). The Amended Documents make the following changes to the Credit Agreement:
| ● | Release the Company as a guarantor of payment of the Term Loan and replaces such guarantor with the Operating Partnership; |
| ● | Reduces the monthly payment under the Term Loan from $103,348 to $30,000; |
| ● | Removes the requirement that Borrower maintain liquid assets of not less than $1,500,000; |
| ● | Removes as cross collateral for the Term Loan the Greenbrier Business Center Property; and |
| ● | Removes MDR Greenbrier, LLC as a Borrower. |
The foregoing description of the Credit Agreement Amendment, the Amended Term Note, the Release of Guarantor and the Guaranty do not purport to be complete and are qualified in their entirety by reference to the full text of the Credit Agreement Amendment, the Amended Term Note, the Release of Guarantor and the Guaranty, which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
ITEM 2.01 | Completion of Acquisition or Disposition of Assets. |
As previously disclosed in the Form 8-K filed with the Securities and Exchange Commission by the Company on October 28, 2025, on October 27, 2025, MDR Greenbrier, LLC, a Delaware limited liability company (the “Seller”), a wholly owned subsidiary of the Company, entered into a Purchase and Sale Agreement (the “Agreement”), with CLM Acquisitions, LLC, a Virginia limited liability company (the “Purchaser”), whereby the Purchaser agreed to acquire from the Seller the property located 1244 Executive Boulevard, Chesapeake, VA, 23320, commonly known as Greenbrier Business Center (the “Greenbrier Business Center Property”).
On February 13, 2026, 2025, the Company closed on the sale of the Greenbrier Business Center Property (the “Disposition”). The total sales price of the Greenbrier Business Center Property was $11,000,000. The sale was based on arm’s length negotiations with an unaffiliated purchaser. The Company used $7,000,000 from the proceeds from the sale of the Greenbrier Business Center Property to repay a portion of existing debt.
The foregoing description is only a summary of the material provisions of the Agreement and is qualified in its entirety by reference to the full text of the Agreement, which was filed as Exhibit 10.1 to the Company’s Current Report on 8-K filed on October 28, 2025 and incorporated by reference herein.
The unaudited pro forma condensed consolidated financial information of the Company, together with the related notes thereto, giving effect to the consummation of the Disposition and the consummation of prior dispositions, is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
ITEM 3.03 | Material Modification to Rights of Security Holders. |
On February 12, 2026, the Company’s board of directors (the “Board”) authorized termination of the Company’s REIT election which when terminated will be effective January 1, 2026. The restrictions on ownership and transfer of Shares (as defined the in the Company’s Articles of Incorporation) set forth in Article VI of the Company’s Articles of Incorporation, including, without limitation, the “Aggregate Share Ownership Limit,” as defined therein, no longer apply.
On February 17, 2026, the Company filed a Certificate of Notice (the “Certificate of Notice”) with the State Department of Assessments and Taxation of Maryland (“MSDAT”) reflecting the Board’s determination that it is no longer in the best interests of the Company to continue to qualify as a REIT and that therefore the Aggregate Share Ownership Limit will no longer be in effect.
The foregoing summary of the material terms of the Certificate of Notice does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Certificate of Notice which is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On February 17, 2026, the Company amended its Articles of Incorporation and Bylaws solely to change the corporate name from “Medalist Diversified REIT, Inc.” to “Medalist Diversified, Inc.” effective March 2, 2026. A copy of the Company’s Articles of Amendment, as filed with the MSDAT, and the Company’s First Amendment to Bylaws, are attached hereto as Exhibits 3.2 and 3.3, respectively, and are incorporated herein by reference. Trading of the Company’s common stock on the Nasdaq Capital Market under the new name will begin on March 2, 2026 under the existing trading symbol “MDRR.”
ITEM 7.01 | Regulation FD Disclosure. |
On February 17, 2026, the Company issued a press release, a copy of which is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information, including the press release, furnished under this Item 7.01 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any other filing by the Company under the Exchange Act or the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. | Description | |
3.1 | Certificate of Notice, dated February 17, 2026 | |
3.2 | Articles of Amendment to the Articles of Incorporation of Medalist Diversified REIT, Inc., dated February 17, 2026 | |
3.3 | First Amendment to Bylaws, dated February 17, 2026 | |
10.1 | Fourth Amendment to Credit Agreement, dated February 13, 2026 | |
10.2 | Second Amended and Restated Term Note, dated February 13, 2026 | |
10.3 | Release of Guarantor, dated February 13, 2026 | |
10.4 | Continuing Guaranty, dated February 13, 2026 | |
99.1 | Unaudited Pro Forma Financial Statements | |
99.2 | Press Release, dated February 17, 2026 | |
104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL Document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MEDALIST DIVERSIFIED REIT, INC. | |
|
|
|
Dated: February 17, 2026 | By: | /s/ C. Brent Winn, Jr. |
|
| C. Brent Winn, Jr. |
|
| Chief Financial Officer |
Exhibit 99.1
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Pro Forma Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024
and
Unaudited Pro Forma Consolidated Statements of Operations for the
nine months ended September 30, 2025 and the year ended December 31, 2024
Summary of Unaudited Pro Forma Consolidated Financial Statements
The following pro forma financial information is presented in accordance with Article 11 of Regulation S-X promulgated the United States Securities and Exchange Commission (the “SEC”). In accordance with Article 11 of Regulation S-X, certain unaudited financial information for the properties disposed of since September 30, 2025 that are not individually significant have also been presented.
On October 23, 2025, Medalist Diversified REIT, Inc. (the “Company”), through its operating partnership, Medalist Diversified Holdings, LP (the “Operating Partnership”), and the Operating Partnership’s wholly owned subsidiaries, completed the disposition of that certain tract of real property containing a building at 2106 Statesville Blvd., Salisbury, NC, commonly known as Salisbury Marketplace Shopping Center (the “Salisbury Property”) to an unaffiliated purchaser.
On December 30, 2025, the Company, through the Operating Partnership and the Operating Partnership’s wholly owned subsidiaries, completed the disposition of those certain tracts of real property at 2545 Scottsville Road, Bowling Green, KY (the “Buffalo Wild Wings Property”) and 376 Dan Tibbs Road NW Huntsville, Madison County, Alabama (the “United Rentals Property”), each containing a single building, to an unaffiliated purchaser.
On February 13, 2026, the Company, through the Operating Partnership and the Operating Partnership’s wholly owned subsidiaries, completed the disposition of that certain tract of real property containing three buildings at 1244 Executive Boulevard, Chesapeake, Virginia, commonly known as Greenbrier Business Center (the “Greenbrier Property”) to an unaffiliated purchaser. Collectively, the four transactions are referenced herein as the “Dispositions.”
The following unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with the condensed consolidated balance sheet of Medalist Diversified REIT, Inc. and Subsidiaries as of September 30, 2025 (unaudited), the audited consolidated balance sheet of Medalist Diversified REIT, Inc. and Subsidiaries as of December 31, 2024, the condensed consolidated statement of operations of Medalist Diversified REIT, Inc. and Subsidiaries for the nine months ended September 30, 2025 (unaudited), and the audited consolidated statement of operations of Medalist Diversified REIT, Inc. and Subsidiaries for the year ended December 31, 2024.
The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2025 has been prepared to give effect to the Dispositions as if these transactions had occurred on September 30, 2025.
The following unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2025 has been prepared to give effect to the Dispositions as if these transaction had occurred on January 1, 2025.
The following unaudited pro forma consolidated balance sheet as of December 31, 2024 has been prepared to give effect to the Salisbury Property and Greenbrier Property dispositions as if these transactions had occurred on December 31, 2024. The Buffalo Wild Wings and United Rentals properties were not represented on the Company’s audited consolidated balance sheet as of December 31, 2024. As a result, no adjustments have been made to the December 31, 2024 audited consolidated balance sheet to reflect their disposition.
The following unaudited pro forma consolidated statement of operations for year ended December 31, 2024 has been prepared to give effect to the Dispositions as if these transactions had occurred on January 1, 2024.
The Company has based the unaudited pro forma adjustments on available information and assumptions that it believes are reasonable. These unaudited pro forma consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the Dispositions been consummated as of the dates indicated.
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of September 30, 2025
| | | | | Pro Forma Adjustments (b) | | | | ||||||||||
| | | | | | | Buffalo | | United | | | | | | ||||
| | | | Salisbury | | Wild Wings | | Rentals | | Greenbrier | | Pro Forma | ||||||
| | Historical | | Disposition | | Disposition | | Disposition | | Disposition | | September 30, | ||||||
| | September 30, | | (i) | | (ii) | | (ii) | | (iii) | | 2025 | ||||||
| | 2025 (a) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | ||||||
ASSETS | | | | | | | | | | | | | | | | | | |
Investment properties, net | | $ | 53,493,272 | | $ | - | | $ | (2,303,644) | (c) | $ | (2,454,930) | (c) | $ | - | | $ | 48,734,698 |
Cash | | | 1,886,677 | | | 4,500,772 | (d) | | 2,407,992 | (d) | | 2,644,920 | (d) | | 3,631,304 | (d) | | 15,071,665 |
Restricted cash | | | 1,915,909 | | | - | | | - | | | - | | | - | | | 1,915,909 |
Rent and other receivables | | | 100,143 | | | - | | | - | | | - | | | - | | | 100,143 |
Assets held for sale | | | 30,666,856 | | | (9,051,387) | (e) | | - | | | - | | | (6,312,658) | (e) | | 15,302,811 |
Unbilled rent | | | 1,253,026 | | | - | | | - | | | - | | | - | | | 1,253,026 |
Intangible assets, net | | | 1,798,255 | | | - | | | (210,132) | (f) | | (247,069) | (f) | | - | | | 1,341,054 |
Other intangible assets | | | 122,738 | | | - | | | - | | | - | | | - | | | 122,738 |
Other assets | | | 867,495 | | | - | | | - | | | - | | | - | | | 867,495 |
Total Assets | | $ | 92,104,371 | | $ | (4,550,615) | | $ | (105,784) | | $ | (57,079) | | $ | (2,681,354) | | $ | 84,709,539 |
| | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 1,702,384 | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 1,702,384 |
Liabilities associated with assets held for sale | | | 26,815,510 | | | (5,622,135) | (g) | | - | | | - | | | (7,000,000) | (g) | | 14,193,375 |
Intangible liabilities, net | | | 862,730 | | | - | | | (53,025) | (h) | | - | | | - | | | 809,705 |
Mortgages payable, net | | | 37,728,594 | | | - | | | - | | | - | | | - | | | 37,728,594 |
Total Liabilities | | $ | 67,109,218 | | $ | (5,622,135) | | $ | (53,025) | | $ | - | | $ | (7,000,000) | | $ | 54,434,058 |
| | | | | | | | | | | | | | | | | | |
EQUITY | | | | | | | | | | | | | | | | | | |
Common stock | | $ | 11,124 | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 11,124 |
Additional paid-in capital | | | 51,989,953 | | | - | | | - | | | - | | | - | | | 51,989,953 |
Offering costs | | | (3,404,055) | | | - | | | - | | | - | | | - | | | (3,404,055) |
Accumulated deficit | | | (38,219,239) | | | 536,724 | (i) | | (26,427) | (i) | | (28,591) | (i) | | 2,163,210 | (i) | | (35,574,323) |
Total Stockholders' Equity | | | 10,377,783 | | | 536,724 | | | (26,427) | | | (28,591) | | | 2,163,210 | | | 13,022,699 |
Noncontrolling interests - Parkway Property | | | 384,746 | | | - | | | - | | | - | | | - | | | 384,746 |
Noncontrolling interests - Operating Partnership | | | 14,232,624 | | | 534,796 | (j) | | (26,332) | (j) | | (28,488) | (j) | | 2,155,436 | (j) | | 16,868,036 |
Total Equity | | $ | 24,995,153 | | $ | 1,071,520 | | $ | (52,759) | | $ | (57,079) | | $ | 4,318,646 | | $ | 30,275,481 |
Total Liabilities and Equity | | $ | 92,104,371 | | $ | (4,550,615) | | $ | (105,784) | | $ | (57,079) | | $ | (2,681,354) | | $ | 84,709,539 |
See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2025
Notes to unaudited pro forma consolidated balance sheet as of September 30, 2025
| (a) | Historical financial information was derived from the condensed consolidated balance sheet of the Company as of September 30, 2025 (unaudited). |
| (b) | Represents the impact of the Dispositions as if each transaction had occurred on September 30, 2025. |
| i. | On October 23, 2025, the Company closed on the sale of the Salisbury Property. The total sales price received for the Property was $9,930,000. The Company used $5,145,479 of the proceeds from the sale of the Salisbury Property to repay a portion of the Wells Fargo Mortgage Facility that was cross collateralized by the Salisbury Property. |
| ii. | On December 30, 2025, the Company closed on the sales of the Buffalo Wild Wings and United Rentals Properties. The total sales price received for the two properties was $5,295,000. |
| iii. | On February 13, 2026, 2025, the Company closed on the sale of the Greenbrier Property. The total sales price received for the Property was $11,000,000. The Company used $7,000,000 of the proceeds from the sale of the Greenbrier Property to repay a portion of the Wells Fargo Mortgage Facility that was cross collateralized by the Greenbrier Property |
| (c) | Represents the book value of the Buffalo Wild Wings and United Rentals Properties which, as of September 30, 2025, had not yet been transferred to assets held for sale. |
| (d) | Represents the net cash proceeds of each of the transactions, net of pro rated operating items and the extinguishment of certain liabilities, including tenant security deposits transferred to the buyer. |
| (e) | Represents the book value of the Salisbury and Greenbrier Properties which, as of September 30, 2025, had been transferred to assets held for sale. |
| (f) | Represents the book value of the intangible assets associated with the Buffalo Wild Wings and United Rentals Properties which, as of September 30, 2025, had not yet been transferred to assets held for sale. |
| (g) | Represents the repayment of mortgages payable, net, associated with assets held for sale, and the book value of intangible liabilities associated with assets held for sale. |
| (h) | Represents the book value of the intangible liabilities associated with the Buffalo Wild Wings Property which, as of September 30, 2025, had not yet been transferred to liabilities associated with assets held for sale. |
| (i) | Represents the gain (loss) on disposition of investment properties. |
| (j) | Represents the Operating Partnership’s non-controlling interest in the gain on sale. As of September 30, 2025, the OP Units not held by the Company represent 49.91% of the outstanding OP Units. |
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 2025
| | | | | Pro Forma Adjustments (b) | | | | ||||||||||
| | | | | | | Buffalo | | United | | | | | | ||||
| | | | Salisbury | | Wild Wings | | Rentals | | Greenbrier | | Pro Forma | ||||||
| | Historical | | Disposition | | Disposition | | Disposition | | Disposition | | September 30, | ||||||
| | September 30, | | (i) | | (ii) | | (ii) | | (iii) | | 2025 | ||||||
| | 2025 (a) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | ||||||
REVENUE | | | | | | | | | | | | | | | | | | |
Retail center property revenues | | $ | 4,673,820 | | $ | (695,646) | (c) | $ | - | | $ | - | | $ | - | | $ | 3,978,174 |
Flex center property revenues | | | 2,053,868 | | | - | | | - | | | - | | | (819,209) | (c) | | 1,234,659 |
Single tenant net lease property revenues | | | 845,366 | | | - | | | (119,880) | (c) | | (123,846) | (c) | | - | | | 601,640 |
Total Revenue | | $ | 7,573,054 | | $ | (695,646) | | $ | (119,880) | | $ | (123,846) | | $ | (819,209) | | $ | 5,814,473 |
| | | | | | | | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | | | | | | | |
Retail center property operating expenses | | $ | 1,302,361 | | $ | (190,751) | (d) | $ | - | | $ | - | | $ | - | | $ | 1,111,610 |
Flex center property operating expenses | | | 545,143 | | | - | | | - | | | - | | | (183,130) | (d) | | 362,013 |
Single tenant net lease property operating expenses | | | 152,675 | | | - | | | - | | | - | | | - | | | 152,675 |
Bad debt expense | | | 1,686 | | | (365) | (d) | | - | | | - | | | (1,160) | (d) | | 161 |
Share based compensation expenses | | | 397,182 | | | - | | | - | | | - | | | - | | | 397,182 |
Legal, accounting and other professional fees | | | 1,172,673 | | | - | | | - | | | - | | | - | | | 1,172,673 |
Corporate general and administrative expenses | | | 1,041,918 | | | - | | | - | | | - | | | - | | | 1,041,918 |
Loss on impairment | | | 67,503 | | | - | | | - | | | - | | | - | | | 67,503 |
Impairment of assets held for sale | | | 120,000 | | | - | | | - | | | - | | | - | | | 120,000 |
Depreciation and amortization | | | 2,667,181 | | | (281,485) | (d) | | (64,169) | (d) | | (101,032) | (d) | | (206,664) | (d) | | 2,013,831 |
Total Operating Expenses | | | 7,468,322 | | | (472,601) | | | (64,169) | | | (101,032) | | | (390,954) | | | 6,439,566 |
Loss on redemption of mandatorily redeemable preferred stock | | | (9,375) | | | - | | | - | | | - | | | - | | | (9,375) |
Loss on extinguishment of debt | | | (27,066) | | | - | | | - | | | - | | | - | | | (27,066) |
Operating income (loss) | | | 68,291 | | | (223,045) | | | (55,711) | | | (22,814) | | | (428,255) | | | (661,534) |
Interest expense | | | 1,900,672 | | | (208,496) | (e) | | - | | | - | | | (172,713) | (e) | | 1,519,463 |
Net Loss from Operations | | | (1,832,381) | | | (14,549) | | | (55,711) | | | (22,814) | | | (255,542) | | | (2,180,997) |
Other income | | | 314,318 | | | - | | | - | | | - | | | - | | | 314,318 |
Other expense | | | (68,937) | | | - | | | - | | | - | | | - | | | (68,937) |
Net Loss | | | (1,587,000) | | | (14,549) | | | (55,711) | | | (22,814) | | | (255,542) | | | (1,935,616) |
Less: Net loss attributable to Parkway Property noncontrolling interests | | | (3,123) | | | - | | | - | | | - | | | - | | | (3,123) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | | | 337,556 | | | (6,356) | (f) | | (24,340) | (f) | | (9,967) | (f) | | (111,646) | (f) | | 185,246 |
Net Loss Attributable to Medalist Common Shareholders | | $ | (1,921,433) | | $ | (8,193) | | $ | (31,371) | | $ | (12,847) | | $ | (143,896) | | $ | (2,117,739) |
| | | | | | | | | | | | | | | | | | |
Loss per common share - diluted | | | (1.47) | | | | | | | | | | | | | | | (1.62) |
Weighted-average number of shares - diluted | | | 1,307,745 | | | | | | | | | | | | | | | 1,307,745 |
| | | | | | | | | | | | | | | | | | |
Dividends paid per common share | | | $0.20 | | | | | | | | | | | | | | | $0.20 |
See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025
Notes to unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2025
| (a) | Historical financial information was derived from the condensed consolidated statement of operations of the Company for the nine months ended September 30, 2025 (unaudited). |
| (b) | Represents the impact of the Dispositions to the Company’s statement of operations as if each transaction had occurred on January 1, 2025. Each adjustment reflects a reduction of revenues and expenses associated with each property as if the Company had not owned the property during the nine months ended September 30, 2025. |
| (c) | Represents the revenues recognized during the nine months ended September 30, 2025. |
| (d) | Represents the property operating and other expenses incurred during the nine months ended September 30, 2025. |
| (e) | Represents an allocation of interest expense from the Wells Fargo Mortgage Facility incurred during the nine months ended September 30, 2025. The Wells Fargo Mortgage Facility was collateralized by the Salisbury and Greenbrier Properties, and the Company’s Lancer Center Property. The total interest paid under the Wells Fargo Mortgage Facility is allocated to each property based on the relationship of each property’s appraised value at the initiation of the Wells Fargo Mortgage Facility to the total appraised value of the three collateral properties. |
| (f) | Represents the Operating Partnership’s non-controlling interest in each respective property’s net income (loss). During the nine months ended September 30, 2025, a weighted average of 43.69% of the Operating Partnership’s net loss was allocated to the noncontrolling unit holders. |
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2024
| | | | | Pro Forma Adjustments (b) | | | | ||||
| | | | | | | | | | | ||
| | | | Salisbury | | Greenbrier | | Pro Forma | ||||
| | Historical | | Disposition | | Disposition | | December 31, | ||||
| | December 31, | | (i) | | (ii) | | 2024 | ||||
| | 2024 (a) | | (Unaudited) | | (Unaudited) | | (Unaudited) | ||||
ASSETS | | | | | | | | | | | | |
Investment properties, net | | $ | 64,424,038 | | $ | (8,569,819) | (c) | $ | (6,290,551) | (c) | $ | 49,563,668 |
Cash | | | 4,776,021 | | | 4,500,772 | (d) | | 3,631,304 | (d) | | 12,908,097 |
Restricted cash | | | 1,296,715 | | | - | | | - | | | 1,296,715 |
Rent and other receivables, net | | | 331,096 | | | - | | | - | | | 331,096 |
Unbilled rent | | | 1,114,365 | | | - | | | - | | | 1,114,365 |
Intangible assets, net | | | 2,187,732 | | | (481,568) | (e) | | (22,107) | (e) | | 1,684,057 |
Other assets | | | 967,735 | | | - | | | - | | | 967,735 |
Total Assets | | $ | 75,097,702 | | $ | (4,550,615) | | $ | (2,681,354) | | $ | 67,865,733 |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 1,185,809 | | $ | - | | $ | - | | $ | 1,185,809 |
Intangible liabilities, net | | | 1,420,364 | | | (476,656) | (f) | | - | | | 943,708 |
Mortgages payable, net | | | 50,001,062 | | | (5,145,479) | (g) | | (7,000,000) | (g) | | 37,855,583 |
Mandatorily redeemable preferred stock, net | | | 1,488,221 | | | - | | | - | | | 1,488,221 |
Total Liabilities | | $ | 54,095,456 | | $ | (5,622,135) | | $ | (7,000,000) | | $ | 41,473,321 |
| | | | | | | | | | | | |
EQUITY | | | | | | | | | | | | |
Common stock | | $ | 13,453 | | $ | - | | $ | - | | $ | 13,453 |
Additional paid-in capital | | | 54,450,272 | | | - | | | - | | | 54,450,272 |
Offering costs | | | (3,404,055) | | | - | | | - | | | (3,404,055) |
Accumulated deficit | | | (36,027,063) | | | 829,356 | (h) | | 3,342,632 | (h) | | (31,855,075) |
Total Stockholders' Equity | | | 15,032,607 | | | 829,356 | | | 3,342,632 | | | 19,204,595 |
Noncontrolling interests - Parkway Property | | | 414,869 | | | - | | | - | | | 414,869 |
Noncontrolling interests - Operating Partnership | | | 5,554,770 | | | 242,164 | (i) | | 976,014 | (i) | | 6,772,948 |
Total Equity | | $ | 21,002,246 | | $ | 1,071,520 | | $ | 4,318,646 | | $ | 26,392,412 |
Total Liabilities and Equity | | $ | 75,097,702 | | $ | (4,550,615) | | $ | (2,681,354) | | $ | 67,865,733 |
See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2024
Notes to unaudited pro forma consolidated balance sheet as of December 31, 2024
| (a) | Historical financial information was derived from the audited consolidated balance sheet of the Company as of December 31, 2024. |
| (b) | Represents the impact of the Dispositions as if each transaction had occurred on December 31, 2024. |
| i. | On October 23, 2025, the Company closed on the sale of the Salisbury Property. The total sales price received for the Property was $9,930,000. The Company used $5,145,479 of the proceeds from the sale of the Salisbury Property to repay a portion of the Wells Fargo Mortgage Facility that was cross collateralized by the Salisbury Property. |
| ii. | On February 13, 2026, 2025, the Company closed on the sale of the Greenbrier Property. The total sales price received for the Property was $11,000,000. The Company used $7,000,000 of the proceeds from the sale of the Greenbrier Property to repay a portion of the Wells Fargo Mortgage Facility that was cross collateralized by the Greenbrier Property |
On December 30, 2025, the Company closed on the sales of the Buffalo Wild Wings and United Rentals Properties. The total sales price received for the two properties was $5,295,000. However, since these properties were acquired during the year ended December 31, 2025, the properties were not represented on the Company’s audited consolidated balance sheet as of December 31, 2024. As a result, no adjustments have been made to the December 31, 2024 audited consolidated balance sheet to reflect their disposition.
| (c) | Represents the book value of the Salisbury and Greenbrier Properties which, as of December 31, 2024, had not yet been transferred to assets held for sale. |
| (d) | Represents the net cash proceeds of each transaction, net of pro rated operating items and the extinguishment of certain liabilities, including tenant security deposits transferred to the buyer. |
| (e) | Represents the book value of the intangible assets associated with the Salisbury and Greenbrier Properties which, as of December 31, 2024, had not yet been transferred to assets held for sale. |
| (f) | Represents the book value of the intangible liabilities which, as of December 31, 2024, had not yet been transferred to liabilities associated with assets held for sale. |
| (g) | Represents the repayment of mortgages payable, net which, as of December 31, 2024, had not yet been transferred to liabilities associated with assets held for sale |
| (h) | Represents the gain on disposition of investment properties. |
| (i) | Represents the Operating Partnership’s non-controlling interest in the gain on sale. As of December 31, 2024, the OP Units not held by the Company represent 22.6% of the outstanding OP Units. |
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the year ended December 31, 2024
| | | | | Pro Forma Adjustments (b) | | | | ||||
| | | | | | | | | | | ||
| | | | Salisbury | | Greenbrier | | Pro Forma | ||||
| | Historical | | Disposition | | Disposition | | December 31, | ||||
| | December 31, | | (i) | | (ii) | | 2024 | ||||
| | 2024 (a) | | (Unaudited) | | (Unaudited) | | (Unaudited) | ||||
REVENUE | | | | | | | | | | | | |
Retail center property revenues | | $ | 6,624,734 | | $ | (943,431) | (c) | $ | - | | $ | 5,681,303 |
Flex center property revenues | | | 2,750,499 | | | - | | | (1,069,889) | (c) | | 1,680,610 |
Single tenant net lease property revenues | | | 359,894 | | | - | | | - | | | 359,894 |
Total Revenue | | $ | 9,735,127 | | $ | (943,431) | | $ | (1,069,889) | | $ | 7,721,807 |
| | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | |
Retail center property operating expenses | | $ | 1,621,898 | | $ | (211,396) | (d) | $ | - | | $ | 1,410,502 |
Flex center property operating expenses | | | 697,864 | | | - | | | (260,491) | (d) | | 437,373 |
Single tenant net lease property operating expenses | | | 31,977 | | | - | | | - | | | 31,977 |
Bad debt expense | | | 39,910 | | | (96) | (d) | | - | | | 39,814 |
Share based compensation expenses | | | 277,500 | | | - | | | - | | | 277,500 |
Legal, accounting and other professional fees | | | 1,170,270 | | | - | | | - | | | 1,170,270 |
Corporate general and administrative expenses | | | 968,435 | | | - | | | - | | | 968,435 |
Loss on impairment | | | 182 | | | (182) | (d) | | - | | | - |
Depreciation and amortization | | | 3,915,483 | | | (697,430) | (d) | | (357,446) | (d) | | 2,860,607 |
Total Operating Expenses | | | 8,723,519 | | | (909,104) | | | (617,937) | | | 7,196,478 |
Gain on disposal of investment properties | | | 2,819,502 | | | - | | | - | | | 2,819,502 |
Loss on redemption of mandatorily redeemable preferred stock | | | (47,680) | | | - | | | - | | | (47,680) |
Loss on extinguishment of debt | | | (51,837) | | | - | | | - | | | (51,837) |
Operating income (loss) | | | 3,731,593 | | | (34,327) | | | (451,952) | | | 3,245,314 |
Interest expense | | | 3,019,799 | | | (285,675) | (e) | | (236,645) | (e) | | 2,497,479 |
Net Income (Loss) from Operations | | | 711,794 | | | 251,348 | | | (215,307) | | | 747,835 |
Other income | | | 88,856 | | | - | | | - | | | 88,856 |
Other expense | | | (56,325) | | | - | | | - | | | (56,325) |
Net Income (Loss) | | | 744,325 | | | 251,348 | | | (215,307) | | | 780,366 |
Less: Net income attributable to Hanover Square Property noncontrolling interests | | | 453,928 | | | - | | | - | | | 453,928 |
Less: Net loss attributable to Parkway Property noncontrolling interests | | | (3,234) | | | - | | | - | | | (3,234) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | | | 266,107 | | | 20,535 | (f) | | (17,591) | (f) | | 269,052 |
Net Income (Loss) Attributable to Medalist Common Shareholders | | $ | 27,524 | | $ | 230,813 | | $ | (197,716) | | $ | 60,621 |
| | | | | | | | | | | | |
Earnings per common share - basic | | $ | 0.024 | | | | | | | | $ | 0.054 |
Weighted-average number of shares - basic | | | 1,132,588 | | | | | | | | | 1,132,588 |
| | | | | | | | | | | | |
Earnings per common share - diluted | | $ | 0.03 | | | | | | | | $ | 0.06 |
Weighted-average number of shares - diluted | | | 1,127,768 | | | | | | | | | 1,127,768 |
| | | | | | | | | | | | |
Dividends paid per common share | | $ | 0.17 | | | | | | | | $ | 0.17 |
See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2024
Notes to unaudited pro forma consolidated statement of operations for the year ended December 31, 2024
| (a) | Historical financial information was derived from the audited consolidated statement of operations of the Company for the year ended December 31, 2024. |
| (b) | Represents the impact of the Dispositions to the Company’s statement of operations as if each transaction had occurred on January 1, 2024. Each adjustment reflects a reduction of revenues and expenses as if the Company had not owned the property during the year ended December 31, 2024. |
| (c) | Represents the revenues recognized during the year ended December 31, 2024. |
| (d) | Represents the property operating and other expenses incurred during the year ended December 31, 2024. |
| (e) | Represents an allocation of interest expense from the Wells Fargo Mortgage Facility incurred during the year ended December 31, 2024. The Wells Fargo Mortgage Facility was collateralized by the Salisbury and Greenbrier Properties, and the Company’s Lancer Center Property. The total interest paid under the Wells Fargo Mortgage Facility is allocated to each property based on the relationship of each property’s appraised value at the initiation of the Wells Fargo Mortgage Facility to the total appraised value of the three collateral properties. |
| (f) | Represents the Operating Partnership’s non-controlling interest in each respective property’s net income. During the year ended December 31, 2025, a weighted average of 8.17% of the Operating Partnership’s net income (loss) was allocated to the noncontrolling unit holders. |
EXHIBIT 99.2
Medalist Diversified REIT, Inc. ANNOUNCES CORPORATE REPOSITIONING
RICHMOND, Va., February 17, 2026--Medalist Diversified REIT, Inc. (NASDAQ: MDRR) (the "Company" or "Medalist"), a Virginia-based corporation announced today that the Company’s Board of Directors has approved an updated strategic framework to continue the Company’s transition from an equity REIT to a business with increased capital allocation flexibility.
As part of this strategy, the Company intends to revoke its REIT tax election effective as of January 1, 2026 and transition to a standard C-corporation for its 2026 tax year and thereafter. The Company believes this change will eliminate the structural constraints required to qualify for REIT status, including mandatory distribution requirements and asset and income tests that may limit business activities. In connection with the revocation, the Company also expects to change its corporate name to Medalist Diversified, Inc., while retaining its NASDAQ listing and ticker symbol, MDRR.
Over the past two and a half years, the Company believes that it has substantially simplified its balance sheet and capital structure and has also repaid its corporate-level lines of credit. The Company currently has no indebtedness at the corporate level. All remaining debt is property-level financing with limited corporate guaranties that the Company is actively working to reduce or eliminate in the near future.
The Company expects to continue to reposition its portfolio by monetizing legacy real estate assets and retiring associated property-level debt. These actions are intended to convert stabilized assets into deployable capital to support strategic initiatives discussed below. The Company currently has more than $40 million of net asset value consisting of real estate assets and liquid investments, a significant portion of which is expected to be liquid or readily deployable.
Medalist intends to advance three parallel strategic workstreams during 2026. First, the Company plans to continue developing and expanding its Delaware Statutory Trust (“DST”) sponsorship platform, which generates fee income from the acquisition, management, and disposition of real estate assets for Section 1031 exchange investors. Second, the Company intends to implement a disciplined treasury strategy, deploying liquid assets into treasuries and investment-grade securities to generate income while preserving capital. Third, the Company will maintain balance sheet strength and public-company status to position itself to execute potential strategic acquisitions, should appropriate opportunities arise.
Frank Kavanaugh, Medalist’s President and CEO, said, “we are repositioning the Company with a cleaner, simpler structure with no corporate-level debt, warrants, or options. We believe that revoking our REIT tax status will reduce compliance expense and increase our flexibility to implement our 2026 strategy. We have historically generated positive cash flow, we expect to continue to grow our DST platform, and we are actively looking for the right acquisition opportunity to complement our business. We also continue to evaluate repositioning opportunities in our real estate holdings. We believe this potential repositioning will help give us the flexibility to pursue value creation across multiple paths for our shareholders."
About Medalist
Medalist (NASDAQ: MDRR) is a Virginia-based corporation executing a strategic transition from a traditional equity REIT to a more flexible corporate structure intended to support capital allocation across multiple strategies focused on investment income and fee-based business activities. Medalist’s current activities include managing a portfolio of income-producing investments, operating a DST sponsorship platform that generates fee income in connection with Section 1031 exchange transactions, and selectively monetizing legacy real estate assets. The Company maintains a disciplined approach to capital deployment, liquidity management, and risk assessment while evaluating opportunities that align with its long-term strategic objectives. For more information, please visit the Company’s website at www.medalistreit.com.
Forward-Looking Statements
This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward looking statements are not historical and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “may,” “will,” “should” and “could” and include statements about the Company’s updated strategic framework and the related timing, anticipated
name change, the impact of the Company’s revocation of its REIT tax election, future plans including debt retirement and changes to the Company’s investment strategy, and the impact, if any, of such actions on the Company and the trading price of the Company’s common stock. Forward-looking statements are based upon the Company’s present expectations but are not guarantees or assurances as to future developments or results. Factors that may cause actual developments or results to differ from those reflected in forward-looking statements include, without limitation, adverse changes in the pricing of the Company’s assets, disruptions associated with changes to the Company’s strategy, increased costs of, and reduced availability of, capital and those included in the Company’s most recent Annual Report on Form 10-K and in the Company’s other filings with the Securities and Exchange Commission. Investors should not place undue reliance upon forward-looking statements. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes and new developments except as required by law or regulations.
Contact
Brent Winn
Medalist Diversified REIT, Inc.
bwinn@medalistreit.com