Current Report Filing (8-k)
May 01 2020 - 6:47AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): May 1, 2020
POWER
REIT
(Exact
name of registrant as specified in its charter)
Maryland
(State
or other jurisdiction of incorporation)
001-36312
(Commission
File Number)
45-3116572
(IRS
Employer Identification No.)
301
Winding Road
Old
Bethpage, NY 11804
(Address
of principal executive offices and Zip Code)
Registrant’s
telephone number, including area code: (212) 750-0371
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 (see General Instruction A.2. below):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class
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Trading
Symbol
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Name
of Each Exchange on Which Registered
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Common
Shares
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PW
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NYSE
(American)
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7.75%
Series A Cumulative Redeemable Perpetual Preferred Stock, Liquidation Preference $25 per Share
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PW.A
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NYSE
(American)
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Indicate
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).
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.
Effective
May 1, 2020, Power REIT (“Power REIT” or the “Trust”) has entered into an agreement for expansion of a
property located in southern Colorado ( “Maverick 5”) owned by a wholly owned subsidiary of the Trust (“PropCo”)
and leased to Original Cannabis Growers of Ordway LLC (“Tenant”) pursuant to a lease (the “Lease”).
Power
REIT acquired Maverick 5 on March 19, 2020 for $150,000 which is a 5.2 acre parcel approved for cannabis cultivation. As part
of the acquisition, the Trust 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. The expansion consists of approximately 5,040 square feet of
additional greenhouse space for cultivation of cannabis. The Tenant is responsible for implementing the expansion and PropCo will
the fund the cost of such expansion up to a total of $340,539 with any additional amounts funded by Tenant.
As
part of the agreement, PropCo and Tenant have amended the Lease to increase the rent whereby after a six-month period, the additional
rental payments provide PropCo with a full return of its invested capital related to the expansion over the next three years in
equal monthly payments. Thereafter, rent is structured to provide a 12.5% return on the original invested capital amount which
will increase at a 3% rate per annum. At any time after year six of the Lease, 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 seven.
The
Lease provides that Tenant is responsible for
paying all expenses related to the Properties, including maintenance expenses, insurance and taxes. 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 Tenant’s cannabis and cannabis-infused
products from the Properties.
The
Trust’s commitment to fund construction and the expansion will be funded from existing working capital.
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 amendment to 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
7.01 Regulation FD Disclosure.
On
April 1, 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 filing.
Item
8.01 Other Events.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Forward-Looking
Statements
Some
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 SEC.
Forward-looking
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.
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.
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POWER
REIT
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Date:
May 1, 2020
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By
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/s/
David H. Lesser
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David
H. Lesser
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Chairman
of the Board and Chief Executive Officer
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