AND EXCHANGE COMMISSION
to Section 13 or 15(d) of the Securities Exchange Act of
of report (Date of earliest event reported): March 20,
name of registrant as specified in its charter)
or other jurisdiction of incorporation)
Employer Identification No.)
Bethpage, NY 11804
of principal executive offices and Zip Code)
telephone number, including area code: (212)
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 (see General Instruction A.2.
communications pursuant to Rule 425 under the Securities Act (17
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
registered pursuant to Section 12(b) of the Act:
of Each Class
of Each Exchange on Which Registered
Series A Cumulative Redeemable Perpetual Preferred Stock,
Liquidation Preference $25 per Share
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
growth company [ ]
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.
1.01. Entry into a Material Definitive Agreement.
Power REIT (“Power REIT” or the “Trust”) announces the acquisition
of a property located in southern Colorado (the “Property”) through
a newly formed wholly owned subsidiary of a wholly owned subsidiary
of the Trust (“PropCo”). Propco has entered into a triple-net lease
with an operator such that the tenant is
responsible for paying all expenses related to the Property,
including maintenance expenses, insurance and taxes. The term of
the lease is 20 years and provides two options to extend for
additional five-year periods. The lease also has financial guarantees
from affiliates of the tenants. The tenant intends to
operate the Property as a licensed cannabis cultivation and
The rent for the lease is structured whereby after a deferred-rent
period of six months, the rental payments provide Power REIT a full
return of invested capital over the next three years in equal
monthly payments. After the deferred-rent period, rent is
structured to provide a 12.5% return based on the original invested
capital amount with annual rent increases of 3% rate per annum. At
any time after year six, if cannabis is legalized at the federal
level, the rent will be readjusted down to an amount equal to a 9%
return on the original invested capital amount and will increase at
a 3% rate per annum based on a starting date of the start of year
The lease requires the tenant to maintain a medical cannabis
license and operate in accordance with all Colorado and state and
local regulations with respect to its operations. The lease
prohibits the retail sale of the cannabis and cannabis-infused
products from the Property.
The foregoing descriptions of the lease does not purport to be
complete and is qualified in its entirety by reference to the
complete text of the lease, a copy of which is attached hereto as
Exhibit 10.1 and is incorporated into this Current Report on Form
8-K by reference.
Item 2.01 Completion of Acquisition or Disposition of
On March 19, 2020, the Trust, through PropCo, completed the
acquisition of the Property.
Power REIT acquired “Maverick 5” for $150,000 which is 5.2 acres of
vacant land approved for cannabis cultivation. As part of the
transaction, the Trust has agreed to fund the immediate
construction of 5,040 square feet of greenhouse space and 4,920
square feet of head-house/processing space on the property for
$868,125. Accordingly, Power REIT’s total capital commitment totals
$1,008,925 plus acquisition expenses.
The acquisition and commitment to fund construction are being
funded from existing working capital.
7.01 Regulation FD Disclosure.
On March 20, 2020, the Trust issued a press release regarding the
acquisition of the Properties.
A copy of the press release is attached hereto as Exhibit 99.1. The
information contained in Item 7.01 of this report, including
Exhibit 99.1, is being furnished and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liabilities of that
section. Such information shall not be incorporated by reference
into any filing of the Trust, whether made before or after the date
hereof, regardless of any general incorporation language in such
8.01 Other Events.
9.01 Financial Statements and Exhibits.
of the information in this press release contains forward-looking
statements and within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. When used in this press release, words
such as “believe,” “expect,” “anticipate,” “estimate,” “plan,”
“continue,” “intend,” “should,” “may,” “target,” or similar
expressions, are intended to identify such forward-looking
statements. Forward-looking statements are subject to significant
risks and uncertainties. Investors are cautioned against placing
undue reliance on such statements. Actual results may differ
materially from those set forth in the forward-looking statements.
Factors that could cause actual results to differ materially from
those described in the forward-looking statements include those
discussed under the caption “Risk Factors” included in our Annual
Report on Form 10-K for our fiscal year ended December 31, 2018,
which was filed with the U.S. Securities and Exchange Commission
(“SEC”), as well as in other reports that we file with the
statements are based on beliefs, assumptions and expectations as of
the date of this press release. We disclaim any obligation to
publicly release the results of any revisions to these
forward-looking statements reflecting new estimates, events or
circumstances after the date of this press release.
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.
March 20, 2020
David H. Lesser
of the Board and Chief Executive Officer