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):
[ ] |
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 |
|
Trading
Symbol |
|
Name
of Each Exchange on Which Registered |
Common
Shares |
|
PW |
|
NYSE
(American) |
|
|
|
|
|
7.75%
Series A Cumulative Redeemable Perpetual Preferred Stock,
Liquidation Preference $25 per Share |
|
PW.A |
|
NYSE
(American) |
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.
|
POWER
REIT |
|
|
Date:
May 1, 2020 |
By |
/s/
David H. Lesser |
|
|
David
H. Lesser |
|
|
Chairman
of the Board and Chief Executive Officer |
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