Medalist Diversified REIT, Inc.

ITEM 1A.RISK FACTORS

Except as set forth below, there have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025. The following risk factor represents a material change from the risk factors described in that Form 10-K and should be read in conjunction with the other risk factors disclosed therein.

Our investment in bitcoin is subject to market volatility and regulatory uncertainty.

We have made, and may make additional, investments in bitcoin. The price of bitcoin has been highly volatile and may continue to be volatile in the future, due to market factors, regulatory developments and other risks that are outside of our control. The prevalence of bitcoin is a relatively recent trend, and the long-term adoption of bitcoin by inWe are seeking to maximize shareholder value by exploring strategic alternativestors, consumers, and businesses remains uncertain. Market participants lack sufficient data to predict the futu. There trend of bitcoins with precision. Bitcoins lack of a physical form and its relican be no assurance on technology may subject its integrity to the threat of malicious attacks and technological obsolescence. To the extent the market value of our bitcoin investment decreases, our financial condition may be adversely impacted.

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The DST Prothat we will be successful in executing a strategram could subject us to liabilities from litigaic transaction or otherwise.

We have initiated a DST Program to issue and sell beneficial interests (DST Interests) in specific Delaware statutory trusts (DSTs) holding one or more real properties (each, a DST Property and, collectively, the DST Properties). These DST Interests will be soldare actively considering strategic alternatives in private placements exempt from registrationan effort to under the Securities Act to accredited invelock and maximize stors in specific DSTs ckholding one or more DST Propertieser value. We expect that the DST Program will give us the opportunity to expand and diversimay not be able to identify our capital-raising stronsummategies by offering what we believe to be an attractive investment product for investors that may be seeking like-kind replacement properties to complete tax-deferred exchange tran a suitable transactions under Section 1031 of the Code. However, there is no guarantee that the DST Program will provide the tax benefits expected by investors. Investors who acquire DST Interests through such private placements may be seeking certain tax benefi and do not currently have any commitments that depend on the interpretrelation of,ng to and compliance with, federal and state income tax laws and regulaty transactions. We may become subject to liability, from litigation or otherwise, as a result of the DST Program.

The DST Program will not shield us from risks related to the performance of the DST Properties held through such structures.

Under the DST Program, certain of our existing real properties and real properties acquired from third parties may be placed into DSTs, the DST Interests of which will be sold to investors. Due to tax-related restrictions on a DSTs leasing activities, unless a DST Property is long-term absolute net leased to a credit tenant, we, through a wholly owned subsidiary, will hold a long-term leasehold interest in each DST Property under a master lease, which may be guaranteed by the Operating Partnership. Under each master lease, we, through such subsidiary or applicable master tenant, will be responsible for subleasing the applicable DST Property to occupying tenants until the earlier of the expiration of the master lease or the Operating Partnerships exercise of the FMV Optnot be able to successfully implement a strategic transaction we pursue, and even if we determine to pursue one or more strategic transaction, as defined belows, which means that we bear the risk that the underlying cash flows from a DST Property may e may be less than the master lease payments. Therefore, even though we will no longer own such applicaunable DST Property, because of the fixed terms of the master lease, which may be guaranteed by the Operating Partnership, negative operating performance by a DST Property could affect cash availato do so on acceptable for distributions to our stockholders and would likely have an adverse effect on our results of operations.

DST Properties may be less liquid than other assets, which could impair our ability to utilize cash proceeds from sales of sinancial terms and any such DST Properties for other purposes such as paying down debt, distributions or additransactional investments.

We m may later reacquire DST Propertiesnot improve through the Operating Partnerships exercise market price of its contractual right to acquire a DST Property from the DST at its fair market value (the FMV Option). In such cases, the investors who elect to receive OP Units pour common stock. Pursuant to the FMV Option and become limited partners in the Opeing a strating Partnership will generally still be tied to the applicable DST Property in terms of basis and built-in-gain. As a result, if a DST Propertegic opportunity is subsequently sold, unless we effectuate a like-kind exchange under Section 1031 of the Code, then tax will be triggered on the investors built-in-gain. Any replacement property acquired in connection with a 1031 exchange will similarly be tied to such investors with similar considerations if such replacement property ever is sold. We also may enter into tax protection agreements with investors who elect to receive OP Units in connection with the exercise of a FMV Option pursuant to which we will agree to indemnify such investors from their tax liabilities generated from a taxable disposition of a DST Property durinject to risks, including those outlined herein, and if we are unsuccessful in consummating a protected period of time. As a result of these factors, placing real properties into the DST Program may limit our ability to access liquidity from such real properties or replacement properties through sale without triggering taxes due to the built-in-gain tied to investors in the DST Program. Such reduced liquidity cstrategic transaction, our business could impair our ability to utilize cash proceeds from sales for other purposes such as paying down debt, paying distributions, funding repurchases or making additional investmentsbe materially adversely affected.