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What changed in Power REIT's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Power REIT's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+387 added−335 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-29)

Top changes in Power REIT's 2024 10-K

387 paragraphs added · 335 removed · 248 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+38 added−15 removed42 unchanged
Biggest changeProperties As of December 31, 2023, the Trust’s assets consisted of a total of approximately 112 miles of railroad infrastructure plus branch lines and related real estate, approximately 501 acres of fee simple land leased to two utility scale solar power generating projects with an aggregate generating capacity of approximately 88 Megawatts (“MW”), and approximately 256 acres of land with approximately 2,163,000 square feet of existing or under construction greenhouse/processing space. 6 Below is a chart that summarizes our properties as of December 31, 2023: Property Type/Name Acres Size 1 Gross Book Value 3 Railroad Property P&WV - Norfolk Southern 112 miles $ 9,150,000 Solar Farm Land Massachusetts PWSS 7,9 54 5.7 1,005,538 California PWRS 447 82.0 9,183,548 Solar Total 501 87.7 $ 10,189,086 Greenhouse - Cannabis Ordway, Colorado Maverick 1 4,6,7 5.20 16,416 1,594,582 Tamarack 18 4,6 2.11 12,996 1,075,000 Maverick 14 4,6,7 5.54 26,940 1,908,400 Sherman 6 - Green Street/Chronic 5,6,7,9 5.00 26,416 1,995,101 Tamarack 7 4,6 4.32 18,000 1,364,585 Tamarack 7 (MIP) 5 636,351 Tamarack 19 4,6 2.11 18,528 1,311,116 Tamarack 8 - Apotheke 5,6 4.31 21,548 2,061,542 Tamarack 14 4,6,7,9 2.09 24,360 2,252,187 Tamarack 13 4,6,7 2.37 9,384 1,031,712 Tamarack 3 4,6 2.20 24,512 2,080,414 Tamarack 27 and 28 4,6 4.00 38,440 1,872,340 Sherman 21 and 22 2,4,6 10.00 24,880 1,782,136 Maverick 5 - Jacksons Farms 5,6 5.20 15,000 1,358,634 Tamarack 4 and 5 4,6,7 4.41 27,988 2,239,870 Walsenburg, Colorado 4,6,7 35.00 102,800 4,219,170 Desert Hot Springs, California 6,7 0.85 37,000 7,685,000 Vinita, Oklahoma 4,6,7 9.35 40,000 2,593,313 Marengo Township, Michigan 4 61.14 556,146 24,171,151 Greenhouse - Food Crop O’Neill, Nebraska 4 90.88 1,121,153 9,350,000 Greenhouse Total 256.08 2,162,507 $ 72,582,605 Total Portfolio (Real Estate Owned) $ 91,921,691 Mortgage Loan 8 $ 850,000 Impairment 20,673,182 Depreciation and Amortization 6,739,995 Net Book Value Net of Impairment, Depreciation and Amortization $ 65,358,514 1 Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet 2 Building structure construction incomplete 3 Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs 4 Property is vacant 5 Tenant is not current on rent/in default 6 An impairment has been taken against this asset 7 Asset held for sale 8 Loan secured by a second mortgage related to property in Maine sold on November 1, 2023 9 Property sold after December 31, 2023 - see Note 13 Subsequent Events 7 Power REIT’s Business We are primarily engaged in the ownership, leasing, acquisition, development, and disposition of special purpose real estate assets.
Biggest changeCurrently, the Trust is structured as a holding company and owns its assets through twenty-four wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. 6 Properties Below is a chart that summarizes our properties as of December 31, 2024: Property Type/Name Acres Size 1 Gross Book Value 3 Railroad Property P&WV - Norfolk Southern 112 miles $ 9,150,000 Solar Farm Land California PWRS 447 82 9,183,548 Solar Total 447 82 $ 9,183,548 Greenhouse - Cannabis Ordway, Colorado Maverick 1 2,4,6,7 5.20 17,368 1,594,582 Tamarack 18 2,4,6,7 2.11 12,996 1,075,000 Maverick 14 2,4,6,7 5.54 26,940 1,908,400 Tamarack 7 2,4,6,7 4.32 18,000 1,364,585 Tamarack 7 (MIP) 2,5,6,7 636,351 Tamarack 19 2,4,6,7 2.11 18,528 1,311,116 Tamarack 8 - Apotheke 2,5,6,7 4.31 21,548 2,061,542 Tamarack 13 2,4,6,7 2.37 9,384 1,031,712 Tamarack 3 2,4,6,7 2.20 24,512 2,080,414 Tamarack 27 and 28 2,4,6,7 4.00 38,440 1,872,340 Maverick 5 - Jacksons Farms 2,5,6,7 5.20 15,000 1,358,634 Tamarack 4 and 5 2,4,6,7 4.41 26,076 2,239,870 Walsenburg, Colorado 2,4,6,7 35.00 74,800 4,219,170 Desert Hot Springs, California 2,5,6,7 0.85 35,505 7,685,000 Vinita, Oklahoma 4,6,7 9.35 40,000 2,593,313 Marengo Township, Michigan 2,4,6,7 61.14 556,146 24,171,151 Greenhouse - Food Crop O’Neill, Nebraska 2,4,5,7 90.97 1,130,575 9,350,000 Greenhouse Total 239.08 2,065,818 $ 66,553,180 Total Portfolio (Real Estate Owned) $ 84,886,728 Mortgage Loan 9 $ 597,000 Mortgage Loan 8 1,005,000 Impairment 36,207,472 Depreciation and Amortization 7,494,038 Net Book Value Net of Impairment, Depreciation and Amortization $ 42,787,218 1 Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet 2 Security for the Greenhouse Loan, which is in default 3 Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs 4 Property is vacant 5 Tenant is not current on rent and is in default 6 An impairment has been taken against this asset 7 Asset held for sale 8 Loan secured by a first mortgage (Ordway Properties) sold on January 8, 2024 and is security for the Greenhouse Loan 9 Loan secured by a second mortgage (Maine property) sold on October 30, 2023 7 2023 and 2024 Sale Transactions On January 6, 2023, one of our wholly owned subsidiaries sold its interest in five ground leases related to utility scale solar farms located in Tulare County, California for gross proceeds of $2.5 million.
To achieve this primary goal, we have developed a business strategy focused on increasing the values of our properties, and ultimately of the Trust, which includes: ● Raising capital by monetizing the embedded value in our portfolio to enhance our liquidity position and, as appropriate reducing debt levels to strengthen our balance sheet; ● Selling off non-core properties and underperforming assets; ● Seeking to re-lease properties that are vacant or have non-performing tenants; ● Raising the overall level of quality of our portfolio and of individual properties in our portfolio; ● Improving the operating results of our properties; and ● Taking steps to position the Company for future growth opportunities. 8 Improving Our Balance Sheet by Reducing Debt and Leverage; Improving Liquidity Leverage We continue to seek ways to reduce our leverage by improving our operating performance and through a variety of other means available to us.
To achieve this primary goal, we have developed a business strategy focused on increasing the values of our properties, and ultimately of the Trust, which includes: ● Raising capital by monetizing the embedded value in our portfolio to enhance our liquidity position and, as appropriate reducing debt levels to strengthen our balance sheet; ● Selling off non-core properties and underperforming assets; ● Seeking to re-lease properties that are vacant or have non-performing tenants; ● Raising the overall level of quality of our portfolio and of individual properties in our portfolio; ● Improving the operating results of our properties; and ● Taking steps to position the Trust for future growth opportunities. 8 Improving Our Balance Sheet by Reducing Debt and Leverage; Improving Liquidity Leverage We continue to seek ways to reduce our leverage by improving our operating performance and through a variety of other means available to us.
Furthermore, many of our properties have been repurposed for regulated cannabis operations, and historically were utilized for other purposes, including heavy industrial uses, which expose us to additional risks associated with historical releases of substances at the properties. Management and Trustees - Human Capital Mr. David H. Lesser serves as a member and Chairman of our Board of Trustees.
Furthermore, many of our properties have been repurposed for regulated cannabis operations, and historically were utilized for other purposes, including heavy industrial uses, which expose us to additional risks associated with historical releases of substances at the properties. 14 Management and Trustees - Human Capital Mr. David H. Lesser serves as a member and Chairman of our Board of Trustees.
If the Trust’s plan to focus on selling properties, entering into new leases, improving cash collections from existing tenants and raising capital in the form of debt or equity is effectively implemented, the Trust’s plan could potentially provide enough liquidity. However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity.
If the Trust’s plan to focus on selling greenhouse properties, entering into new leases, improving cash collections from existing tenants and raising capital in the form of debt or equity is effectively implemented, the Trust’s plan could potentially provide enough liquidity. However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity.
Hollander are full time employees. Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business. 13 We believe that our success depends on our ability to retain our key personnel, primarily David Lesser, our Chairman and Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer.
Hollander are full time employees. Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business. We believe that our success depends on our ability to retain our key personnel, primarily David Lesser, our Chairman and Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer.
The banking industry’s reluctance to finance cannabis operations may provide opportunities to deploy capital at attractive risk adjusted terms through the ownership of the real estate. Investment Opportunity Within the broader cannabis related investment opportunity, our investment thesis was that the ownership of real estate has the potential to provide an attractive risk adjusted investment area of focus.
The banking industry’s reluctance to finance cannabis operations may provide opportunities to deploy capital at attractive risk adjusted terms through the ownership of the real estate. Investment Opportunity Within the broader cannabis related investment opportunity, our investment thesis was that the ownership of real estate should have the potential to provide an attractive risk adjusted investment area of focus.
As our ESG story and portfolio expand, our investor engagement efforts will continue to build alongside, driving our commitment to the planet, its people, and generating returns for our shareholders. Revenue Concentration Historically, the Trust’s revenue has been concentrated to a relatively limited number of investments, industries and lessees.
As our ESG story and portfolio expand, our investor engagement efforts will continue to build alongside, driving our commitment to the planet, its people, and generating returns for our shareholders. 15 Revenue Concentration Historically, the Trust’s revenue has been derived from a relatively limited number of investments, industries and lessees.
See “Risk Factors” and our Description of Capital Stock, included as Exhibit 4.1. Our principal executive offices are located at 301 Winding Road, Old Bethpage, New York 11804, and our telephone number is (212) 750-0371. Our website address is www.pwreit.com .
See “Risk Factors” and our Description of Capital Stock, included as Exhibit 4.1. 16 General Corporate Information Our principal executive offices are located at 301 Winding Road, Old Bethpage, New York 11804, and our telephone number is (212) 750-0371. Our website address is www.pwreit.com .
In order for us to maintain our REIT qualification, at least 90% of our ordinary taxable annual income must be distributed to shareholders. As of December 31, 2022, our last tax return completed to date, we currently have a net operating loss of $24.5 million, which may reduce or eliminate this requirement.
In order for us to maintain our REIT qualification, at least 90% of our ordinary taxable annual income must be distributed to shareholders. As of December 31, 2023, our last tax return completed to date, we currently have a net operating loss of $30.8 million, which may reduce or eliminate this requirement.
For the year ended December 31, 2023, the Trust determined that there was substantial doubt as to its ability to continue as a going concern as a result of current liabilities that far exceed current assets, net losses incurred, expected reduced revenue and increased property expenses related to the greenhouse portfolio.
For the twelve months ended December 31, 2024, the Trust determined that there was substantial doubt as to its ability to continue as a going concern as a result of current liabilities that far exceed current assets, net losses incurred, reduced revenue and increased property expenses related to the greenhouse portfolio.
Our properties and the operations thereon are also subject to federal, state and local laws, ordinances, regulations and requirements related to the federal Occupational Safety and Health Act, as well as comparable state statutes relating to the health and safety of our employees and others working on our properties.
Our properties and the operations thereon are also subject to federal, state and local laws, ordinances, regulations and requirements related to the federal Occupational Safety and Health Act, as well as comparable state statutes relating to the health and safety of our employees and others working on our properties. Compliance with these laws and regulations could increase our operational costs.
As of December 31, 2023, the Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary Pittsburgh & West Virginia Railroad (“P&WV”), approximately 501 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 88 Megawatts (“MW”) and approximately 256 acres of land with approximately 2,163,000 square feet of existing or under construction CEA properties in the form of greenhouses.
As of December 31, 2024, the Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary Pittsburgh & West Virginia Railroad (“P&WV”), approximately 447 acres of fee simple land leased to a utility scale solar power generating project with an aggregate generating capacity of approximately 82 Megawatts (“MW”) and approximately 239 acres of land with approximately 2,066,000 square feet of existing or under construction CEA properties in the form of greenhouses.
In February of 2024, our subsidiary entered into a 20-year triple-net lease with an initial rent of $1 million per year after a 6-month deferred rent period along with a Letter of Intent to purchase the property for $9.2 million with a deadline of December 31, 2024.
In February of 2024, our subsidiary entered into a 20-year triple-net lease with respect to the Nebraska property with an initial rent of $1 million per year after a 6-month deferred rent period. Our subsidiary also entered into a Letter of Intent with the tenant to purchase the property for $9.2 million.
Capital Recycling In the later part of 2022, we commenced property reviews to establish a plan for the portfolio and, if appropriate, will seek to dispose of properties that we do not believe meet financial and strategic criteria given economic, market and other circumstances.
Capital Recycling In the later part of 2022, we commenced property reviews to establish a plan for the portfolio and, where appropriate, have been disposing of and seeking to dispose of properties that we do not believe meet financial and strategic criteria given economic, market and other circumstances.
Unfortunately, the market for tomatoes compressed and the tenant was unable to meet its financial obligations and has vacated the property. We have been actively exploring alternatives to secure a new tenant to put the facility back into operation and the potential to sell the Mill Pro Facility.
Unfortunately, the tenant was unable to meet its financial obligations and has vacated the property. We have been actively exploring alternatives to secure a new tenant to put the facility back into operation and potentially sell the property.
Relative to outdoor (field) production, greenhouse production is more predictable and consistent and produces a crop that is more uniform in appearance and quality. CEA allows for an average of 20x higher yield compared to outdoor cultivation, using 90% less water with no fertilizer runoff. Additionally, the specialized improvements needed for food crop production create higher asset value than farmland.
Relative to outdoor (field) production, greenhouse production is more predictable and consistent and produces a crop that is more uniform in appearance and quality. CEA allows for an average of 20x higher yield compared to outdoor cultivation, using 90% less water with no fertilizer runoff.
In addition to smoking and vaporizing of dried leaves, cannabis can be incorporated into a variety of edibles, vaporizers, spray products, transdermal patches and topicals. These additional form factors are driving a significant portion of the growth.
As the cannabis industry continues to evolve and mature, innovative products are being developed for consumers. In addition to smoking and vaporizing of dried leaves, cannabis can be incorporated into a variety of edibles, vaporizers, spray products, transdermal patches and topicals. These additional form factors are driving a significant portion of the growth.
We believe greenhouse cultivation represents a sustainable solution from both a business and environmental perspective. Certain of our greenhouse properties are operated for the cultivation of cannabis by state-licensed operators. Unfortunately, the market for cannabis compressed dramatically during 2022 and 2023 which has had a dramatic negative effect on this portfolio.
We believe greenhouse cultivation represents a sustainable solution from both a business and environmental perspective. Certain of our greenhouse properties are operated for the cultivation of cannabis by state-licensed operators. Unfortunately, the market for cannabis compressed dramatically during 2023 and 2024.
Regulated Cannabis Industry - Market Opportunity Cannabis Overview We believe that a convergence of changing public attitudes and increased legalization momentum in various states toward regulated cannabis, and medical-use cannabis in particular, has generated interest investment in regulated cannabis related opportunities.
Regulated Cannabis Industry - Market Opportunity Cannabis Overview We believe that a convergence of changing public attitudes and increased legalization momentum in various states toward regulated cannabis, and medical-use cannabis in particular, has generated interest investment in regulated cannabis related opportunities. The cannabis industry is still emerging and has suffered significant business fluctuations over the past couple of years.
The COVID-19 pandemic has underscored for us the importance of keeping our employees safe and healthy. In response to the pandemic, we have taken actions aligned with the World Health Organization and the Centers for Disease Control and Prevention in an effort to protect our workforce so they can more safely and effectively perform their work.
In response to the pandemic, we have taken actions aligned with recommendations from the World Health Organization and the Centers for Disease Control and Prevention in an effort to protect our workforce so they can more safely and effectively perform their work.
We also have several properties that we are marketing for sale and/or lease which have been classified as “Assets Held for Sale.” Improving Our Portfolio We are currently seeking to refine our property holdings by selling properties and/or re-leasing them in an effort to improve the overall performance going forward. 9 Taking Steps to Position the Company for Future Growth Opportunities We are taking steps designed to position the Trust to create shareholder value.
Improving Our Portfolio We are currently seeking to refine our property holdings by selling properties and/or re-leasing them in an effort to improve the overall performance going forward. Taking Steps to Position the Trust for Future Growth Opportunities We are taking steps designed to position the Trust to create shareholder value.
However, the Greenhouse Loan is non-recourse to Power REIT which means that in the event it cannot resolve issues with the lender and they foreclose on the properties, Power REIT should be able to continue as a going concern albeit with a smaller portfolio of assets.
The Greenhouse Loan is non-recourse to Power REIT which means that in the event it cannot resolve issues with the lender and they foreclose on the properties, Power REIT should be able to continue as a going concern albeit with a smaller portfolio of assets given that non-restricted cash should provide greater than twelve months of liquidity for capital needs unrelated to the greenhouse properties which are security for the Greenhouse Loan.
To date, the FDA has not approved a marketing application for cannabis for the treatment of any disease or condition. Governance We are an internally managed REIT with a Board comprised of three independent Trustees and one insider Trustee. Each Trustee serves a one-year term and as such, we do not have a staggered board.
To date, the FDA has not approved a marketing application for cannabis for the treatment of any disease or condition. Governance We are an internally managed REIT with a Board comprised of three independent Trustees and one insider Trustee. Power REIT management has strong alignment with shareholders through significant insider ownership.
CEA is an innovative method of growing plants that involves creating optimized growing environments for a given crop indoors. Power REIT is focused on CEA in the form of a greenhouse which uses dramatically less energy than indoor growing, 95% less water usage than outdoor growing, and does not have any agricultural runoff of fertilizers or pesticides.
CEA is an innovative method of growing plants that involves creating optimized growing environments for a given crop indoors. Power REIT is focused on CEA that utilizes greenhouses which use dramatically less energy than indoor growing, 95% less water than outdoor growing, and allows operators to control and reduce agricultural runoff of fertilizers or pesticides.
Permits for drilling water wells or withdrawing surface water may be required by federal, state and local governmental entities pursuant to laws, ordinances, regulations or other requirements, and such permits may be difficult to obtain due to drought, the limited supply of available water within the districts of the states in which our properties are located or other reasons.
Permits for drilling water wells or withdrawing surface water may be required by federal, state and local governmental entities pursuant to laws, ordinances, regulations or other requirements, and such permits may be difficult to obtain due to drought, the limited supply of available water within the districts of the states in which our properties are located or other reasons. 13 In addition to the regulation of water usage and water runoff, state, local and federal governments also seek to regulate the type, quantity and method of use of chemicals and materials for growing crops, including fertilizers, pesticides and nutrient rich materials.
As of December 31, 2023, 40 states, the District of Columbia, and four of five U.S. territories have passed laws allowing their citizens to use medical cannabis. Cannabis Industry Growth and Trends The cannabis industry over the past several years has experienced dramatic growth. As the cannabis industry continues to evolve and mature, innovative products are being developed for consumers.
As of December 31, 2024, 47 states, the District of Columbia, and three of five U.S. territories have passed laws allowing their citizens to use medical cannabis. 11 Cannabis Industry Growth and Trends The cannabis industry over the past several years has experienced dramatic growth.
In particular, we face competition from established companies in this industry, as well as local real estate investors, particularly for smaller retail assets. 12 Government Regulation Real Estate Industry Regulation Generally, the ownership and operation of real properties are subject to various laws, ordinances and regulations, including regulations relating to zoning, land use, water rights, wastewater, storm water runoff and lien sale rights and procedures.
Government Regulation Real Estate Industry Regulation Generally, the ownership and operation of real properties are subject to various laws, ordinances and regulations, including regulations relating to zoning, land use, water rights, wastewater, storm water runoff and lien sale rights and procedures.
We also own ground leases for utility scale solar farms. Our recent focus on CEA greenhouse properties consumes dramatically less energy than indoor growing, 95% less water, and do not generate the agricultural runoff associated with traditional fertilizers or pesticides. Power REIT does not currently anticipate any material costs related to its portfolio for compliance with environmental laws.
We also own a ground lease for a utility scale solar farm. Our recent focus on CEA greenhouse properties consumes dramatically less energy than indoor growing, 95% less water, and do not generate the agricultural runoff associated with traditional fertilizers or pesticides associated with field crops.
The Trust currently has a Board of Trustees that has three Independent Trustees in addition to Mr. Lesser. Power REIT does not have a staggered board; accordingly, the current policy is that each Trustee serves for one-year terms. Employee health and safety in the workplace is one of our core values.
The Trust currently has a Board of Trustees consisting of three Independent Trustees in addition to Mr. Lesser. Power REIT does not have a staggered board; accordingly, the current policy is that each Trustee serves for one-year term or until their earlier death, retirement or a successor is duly elected and qualified.
Social Our CEA tenant/operator roster is engaged with their local communities. Several of our CEA facilities will produce cannabis which is considered an alternative medical solution for a variety of ailments including, but not limited to, multiple sclerosis, PTSD, arthritis, and seizures.
Power REIT does not currently anticipate any material costs related to its portfolio for compliance with environmental laws. Social Several of our CEA facilities will produce cannabis which is considered an alternative medical solution for a variety of ailments including, but not limited to, multiple sclerosis, PTSD, arthritis, and seizures.
During 2022, we completed our first acquisition with the focus on the cultivation of food crops which is an approximately 1.1 million square foot greenhouse cultivation facility located in O’Neill, Nebraska. The greenhouse is configured for the cultivation of tomatoes and during 2022 grew a preliminary crop.
Additionally, the specialized improvements needed for food crop production create higher asset value than farmland. 12 During 2022, we completed the acquisition of an approximately 1.1 million square foot greenhouse cultivation facility located in O’Neill, Nebraska. The greenhouse is configured for the cultivation of tomatoes, and during 2022 the greenhouse’s tenant grew a preliminary crop of tomatoes.
Currently, most of the cannabis cultivation, nationally, occurs in industrial, warehouse-style facilities. This cultivation method is resource and energy intensive compared to greenhouse cultivation which should use dramatically less energy when compared to industrial facilities. As the cannabis industry continues to expand and prices compress, we believe that industrial, warehouse-style cultivation of cannabis may not be economically competitive.
Our investment thesis focused on CEA cultivation assets in the form of greenhouses that should provide a competitive advantage within the industry. Currently, most of the cannabis cultivation, nationally, occurs in industrial, warehouse-style facilities. This cultivation method is resource and energy intensive compared to greenhouse cultivation which should use dramatically less energy when compared to industrial facilities.
Dividends During the year ended December 31, 2023, the Trust accrued quarterly cash dividends of approximately $653,000 ($0.484375 per share per quarter) to holders of Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock. 14 Distributions declared by us will be authorized by our Board of Trustees in its sole discretion out of funds legally available therefor and will be dependent upon a number of factors, including the capital requirements for our business plans and meeting the distribution requirements necessary to maintain our qualification as a REIT.
Distributions declared by us will be authorized by our Board of Trustees in its sole discretion out of funds legally available therefor and will be dependent upon a number of factors, including the capital requirements for our business plans and meeting the distribution requirements necessary to maintain our qualification as a REIT.
We may continue to seek to acquire, in an opportunistic, selective and disciplined manner, properties that have operating metrics that are better than or equal to our existing portfolio averages, and that we believe have potential to generate cash flow and/or appreciation in value. Taking advantage of any acquisition opportunities would likely involve some use of debt or equity capital.
We may continue to seek to acquire, in an opportunistic, selective and disciplined manner, properties and other real estate related interest and interests in real estate companies that are intended to create shareholder value. Taking advantage of any acquisition opportunities would likely involve some use of debt or equity capital.
We typically enter into long-term “triple net” leases where our tenants are responsible for all costs related to the property, including insurance, taxes and maintenance. Corporate Structure Power REIT was formed as part of a reorganization and reverse triangular merger of P&WV that closed on December 2, 2011. P&WV survived the reorganization as a wholly-owned subsidiary of the Registrant.
Corporate Structure Power REIT was formed as part of a reorganization and reverse triangular merger of P&WV that closed on December 2, 2011. P&WV survived the reorganization as a wholly-owned subsidiary of the Registrant.
During the twelve months ended December 31, 2023, Power REIT collected approximately 84% of its consolidated revenue from two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 45% and 39% of consolidated revenue respectively.
During the twelve months ended December 31, 2024, Power REIT collected approximately 88% of its consolidated revenue from three properties. The tenants are Norfolk Southern Railway, Regulus Solar LLC and Marengo Cannabis LLC which represent 32%, 28% and 28% of consolidated revenue respectively. The concentration percentages does include the income from the recognition of security deposits related to defaulted leases.
In particular, larger companies may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies.
Competition The current market for properties that meet our investment objectives is limited. We are also in a capital constrained position with a high relative cost of capital. In particular, larger companies may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies.
State laws that legalize and regulate medical-use cannabis allow patients to consume cannabis for medicinal reasons with a designated healthcare provider’s recommendation, subject to various requirements and limitations.
In the United States, the development and growth of the regulated cannabis industry has generally been driven by state law and regulation. Accordingly, market conditions vary on a state-by-state basis. State laws that legalize and regulate medical-use cannabis allow patients to consume cannabis for medicinal reasons with a designated healthcare provider’s recommendation, subject to various requirements and limitations.
Of the total amount of cash, approximately $2.2 million is non-restricted cash available for general corporate purposes and $1.9 million is restricted cash related to the Greenhouse Loan.
The decrease in cash was primarily due to the monthly expenses related to the vacant greenhouse properties and paydown of the Greenhouse Loan. Of the total amount of cash as of December 31, 2024, approximately $2.2 million is non-restricted cash available for general corporate purposes and approximately $37,000 is restricted cash related to the Greenhouse Loan.
Financial Results for the years ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 Revenue $ 2,357,695 $ 8,517,720 Net Income (Loss) Attributable to Common Shareholders (before impairment) $ (6,783,206 ) $ 1,832,730 Net Income (Loss) per Common Share (basic) (before impairment) (2.00 ) 0.54 Net Loss Attributable to Common Shareholders (after impairment) $ (15,018,342 ) $ (14,906,310 ) Net Loss per Common Share (basic) (after impairment) (4.43 ) (4.41 ) Core FFO Available to Common Shareholders $ (4,173,118 ) $ 4,449,917 Core FFO per Common Share (1.23 ) 1.32 Growth and Investment Strategies – Controlled Environment Agriculture (CEA) In 2019, we expanded the focus of our real estate acquisitions to include CEA properties in the United States.
In addition, we are exploring the potential to use our existing corporate structure for strategic transactions including potentially merging assets or companies with the Trust. 10 Financial Results for the years ended December 31, 2024 and 2023 Year Ended December 31, 2024 2023 Revenue $ 3,049,875 $ 2,222,483 Net Loss Attributable to Common Shareholders (before impairment) $ (5,409,309 ) $ (6,783,206 ) Net Loss per Common Share (basic) (before impairment) (1.60 ) (2.00 ) Net Loss Attributable to Common Shareholders (after impairment) (25,363,569 ) (15,018,342 ) Net Loss per Common Share (basic) (after impairment) (7.48 ) (4.43 ) Core FFO Available to Common Shareholders $ (3,884,098 ) $ (4,173,118 ) Core FFO per Common Share (1.15 ) (1.23 ) Growth and Investment Strategies – Controlled Environment Agriculture (CEA) In 2019, we expanded the focus of our real estate acquisitions to include CEA properties in the United States.
The current loan liabilities include approximately $14.4 million of a bank loan secured by the majority of the greenhouse portfolio (the “Greenhouse Loan”) and which is non-recourse to the Trust as well as approximately $456,000 of debt secured by a property (Salisbury, MA) that was sold in early 2024 and the loan was paid off.
On a consolidated basis, our current loan liabilities totaled approximately $17.4 million as of December 31, 2024. The current loan liabilities include approximately $16.7 million of a bank loan secured by the majority of the greenhouse portfolio (the “Greenhouse Loan”) and which is in default and is non-recourse to the Trust.
Certain of our greenhouse properties are operated for the cultivation of cannabis by state-licensed operators. During 2022 we acquired a greenhouse focused on the cultivation of tomatoes. Unfortunately, the market for tomatoes compressed and the tenant was unable to meet its financial obligations and has vacated the property.
This has had a dramatic negative effect on our CEA portfolio with most properties vacant or occupied by tenants that are in default. During 2022 we acquired a greenhouse occupied by a tenant focused on the cultivation of tomatoes. Unfortunately, the tenant was unable to meet its financial obligations and has since vacated the property.
We will pursue transactions that we expect can meet the financial and strategic criteria we apply, given economic, market and other circumstances. In addition, we are exploring the potential to use our existing corporate structure for strategic transactions including potentially merging assets or companies with the Trust.
We will pursue transactions that we expect can meet the financial and strategic criteria we apply, given economic, market and other circumstances.
We believe that ultimately, greenhouse cultivation facilities should have the potential to become high-quality, low-cost producers of cannabis in their respective states. 11 During 2022 and 2023, the cannabis industry faced significant headwinds that had a dramatic impact on cultivation focused companies such as our tenants.
As the cannabis industry continues to expand and prices compress, we believe that industrial, warehouse-style cultivation of cannabis may not be economically competitive. We believe that ultimately, greenhouse cultivation facilities should have the potential to become high-quality, low-cost producers of cannabis in their respective states.
The wholesale prices in most markets compressed dramatically and in many cases were below the cost of cultivation and many cultivation companies have shut down. Due to the significant price compression in the wholesale cannabis market, all of our cannabis related tenants are experiencing significant financial challenges.
During 2023 and 2024, the cannabis industry faced significant headwinds that had a dramatic impact on cultivation focused companies such as our tenants. The wholesale prices in most markets compressed dramatically and in many cases were below the cost of cultivation and many cultivation companies have shut down.
Business Strategy Our primary objective is to maximize the long-term value of the Trust for our shareholders.
The sale of the above referenced properties is a part of a strategic review as we continue to evaluate alternatives to enhance liquidity and improve our opportunities. Business Strategy Our primary objective is to maximize the long-term value of the Trust for our shareholders.
In early 2024, the Trust sold three properties which should help with liquidity. The net proceeds from the sale of the Salisbury, MA property was approximately $662,000 of unrestricted cash and the approximately $456,000 loan was retired at closing and is eliminated from current liabilities.
The proceeds from the sale of the Salisbury, MA property was approximately $662,000 of unrestricted cash and the approximately $504,000 of debt was eliminated from liabilities.
These means might include leasing vacant properties, selling properties, raising capital or through other actions. Liquidity As of December 31, 2023, the Trust had approximately $4.1 million of cash and approximately $15.5 million of current loan liabilities.
These means might include leasing vacant properties, selling properties, raising capital or through other actions.
Environmental Regulation Our properties and the operations thereon are subject to federal, state and local environmental laws, ordinances and regulations, including laws relating to water, air, solid wastes and hazardous substances.
Environmental Regulation Our properties and the operations thereon are subject to federal, state and local environmental laws, ordinances and regulations, including laws relating to water, air, solid wastes and hazardous substances, that regulate certain activities and operations that may have environmental or health and safety effects, such as the management, generation, release or disposal of regulated materials, substances or wastes, and impose liability for the costs of cleaning up, and damages to natural resources from, past spills, waste disposals on and off-site, or other releases of hazardous materials or regulated substances.
Disposing of these properties can enable us to redeploy or recycle our capital to other uses, such as to repay debt, to reinvest in other real estate assets and development and redevelopment projects, and for other corporate purposes. Along these lines, in 2023 we completed sales of assets for total gross proceeds of approximately $7.3 million.
Disposing of these properties can enable us to repay debt and possibly, invest in other real estate assets and for other corporate purposes assuming the proceeds are in excess of liabilities.
In addition, we do not have any other management protection structures such as “poison pills” or “golden parachutes.” Power REIT management has strong alignment with shareholders through significant insider ownership. We believe that our corporate governance is a strong component of our ESG profile.
In addition, we do not have any other management protection structures such as “poison pills” or “golden parachutes.” Employee health and safety in the workplace is one of our core values. The COVID-19 pandemic has underscored for us the importance of keeping our employees safe and healthy.
Unfortunately, this has not been enough to solve the issues and many of the cannabis tenants have shut down or continue to try to operate but have limited ability to pay rent at this time. Food Cultivation Market Opportunity There is a growing trend towards cultivation of certain crops in CEA greenhouse cultivation facilities.
The significant price compression in the wholesale cannabis market led to significant tenant defaults and vacancies as all of our cannabis related tenants experienced significant financial challenges. Food Cultivation Market Opportunity There is a growing trend towards cultivation of certain crops in CEA greenhouse cultivation facilities.
The note is secured by a second mortgage on the property and certain corporate and personal guarantees. The sale of the Tulare solar ground leases and the PW SD cannabis related greenhouse cultivation facility are part of a strategic review as we continue to evaluate alternatives to enhance liquidity and improve our opportunities.
The note is secured by a second mortgage on the property and certain corporate and personal guarantees.Net proceeds from the sale were used to service the Greenhouse Loan.
There can be no assurance that the tenant will perform on either the Lease or Purchase. Competition The current market for properties that meet our investment objectives is limited. We are also in a capital constrained position with a high relative cost of capital.
The Letter of Intent included a deadline for the purchase of December 31, 2024, which the tenant did not meet. To date, the tenant has failed to perform with respect to its obligations, and there can be no assurance that the tenant will perform on either the lease or the purchase.
Removed
In 2019, we expanded the focus of our real estate activities to include CEA properties in the form of greenhouses in the United States. CEA is an innovative method of growing plants that involves creating optimized growing environments for a given crop indoors.
Added
In 2019, Power REIT pivoted to focus on greenhouses as a technology play in the form of real estate. Over the past 5 years, a significant amount of capital flowed into the Controlled Environment Agriculture sector in the United States.
Removed
Power REIT is focused on CEA in the form of greenhouses which use approximately 70% less energy than indoor growing, 95% less water usage than outdoor growing, and does not have any agricultural runoff of fertilizers or pesticides. We believe greenhouse cultivation represents a sustainable solution from both a business and environmental perspective.
Added
CEA facilities generally are either indoor warehouse facilities that require lights for plant growth and heating, ventilation and air conditioning to maintain the climate or greenhouses which benefit from free and natural sunlight and proven approaches to maintain a proper growing environment. Our investment thesis was based on greenhouses as sustainable approach to growing certain crops.
Removed
Currently, the Trust is structured as a holding company and owns its assets through twenty-four wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue.
Added
Power REIT invested in greenhouses for state-licensed cannabis and food cultivation. Unfortunately, the market for both opportunities has been challenging and the greenhouse portfolio has performed poorly with significant vacancy. Currently the entire greenhouse portfolio is being marketed for sale but the market to sell these properties is weak. We continue to explore all options to monetize these assets.
Removed
Our typical approach is to lease the properties on a long-term “triple net” basis whereby the tenant pays all property related costs including real estate taxes, insurance, and other operating costs including the maintenance of the property. 2022 and 2023 Acquisitions and Sale Transactions On March 31, 2022, we completed our first acquisition with the focus on the cultivation of food crops, through a newly formed wholly owned subsidiary, PW MillPro NE LLC, (“PW MillPro”), and acquired a 1,121,513 square foot greenhouse cultivation facility (the “MillPro Facility”) on an approximately 86-acre property and a separate approximately 4.88-acre property with a 21-room employee housing building (the “Housing Facility”) for $9,350,000 and closing costs of approximately $91,000 located in O’Neill, Nebraska (collectively the “Property”).
Added
As previously disclosed, the greenhouse portfolio is secured by a loan and is currently in default. The loan is non-recourse to Power REIT which reduces our exposure. While we may continue to explore opportunities in the greenhouse and cannabis space, we are now exploring new opportunities.
Removed
On April 1, 2022, we announced that we entered into a 10-year triple-net lease with a wholly owned subsidiary of Millennium Sustainable Ventures Corp. (ticker: MILC) related to the MillPro Facility. The MillPro Facility is configured for the cultivation of tomatoes and during 2022 grew a preliminary crop.
Added
The real estate market is in a state of transition and experiencing a wave of distressed properties due to factors including economic downturns, shifting property demand in a post-COVID environment, rising interest rates and mortgage defaults. We believe the current environment can create significant opportunities for Power REIT.
Removed
Unfortunately, the market for tomatoes compressed and the tenant was unable to meet its financial obligations and vacated the property. We are actively exploring alternatives to secure a new tenant to put the facility back into operation and the potential to sell the MillPro Facility.
Added
We are focused on special opportunities in the form of investing in distressed situations including debt and other types of secured interests in real estate, distressed properties and real estate related companies. As part of moving Power REIT forward, we are looking to selectively raise capital.
Removed
There can be no assurance that the tenant will perform on either the Lease or Purchase. On January 6, 2023, one of our wholly owned subsidiaries sold its interest in five ground leases related to utility scale solar farms located in Tulare County, California for gross proceeds of $2.5 million.
Added
On January 8, 2024, two wholly owned subsidiaries of Power REIT, PW CO CanRE Sherman 6 LLC and PW CO CanRE MF LLC, sold two cannabis related greenhouse cultivation properties located in Ordway, Colorado to an affiliate of a tenant of one of the properties.
Removed
The other sale produced approximately $53,000 of restricted cash and should generate cash flow from the seller financing provided that should help with liquidity to service the Greenhouse Loan. The Greenhouse Loan is in default and we continue to try to work with the lender to establish a path forward.
Added
The properties are described in prior filings as Sherman 6 (the tenant of which is affiliated with the tenant/purchaser) and Tamarack 14 which was vacant. The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $1,325,000.
Removed
In March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver (See Note 13 Subsequent Events). Unfortunately, this may lead to distressed sales, which would have a negative impact on our prospects. As of the filing date, The Trust’s current liabilities far exceed current assets.
Added
As part of the transaction, a subsidiary of the Trust provided seller financing in the amount of $1,250,000 with an initial 10% interest rate that increases over time to 15% until maturity.
Removed
During 2022 we acquired a greenhouse focused on the cultivation of tomatoes. Unfortunately, the market for tomatoes compressed and the tenant was unable to meet its financial obligations and has vacated the property.
Added
The seller financing has a three-year maturity with a fixed amortization schedule of $40,000 for the first month, $40,000 for the second month, $45,000 for the third month and $15,000 per month thereafter until maturity. The note is secured by a first mortgage on the properties and certain corporate and personal guarantees.
Removed
The cannabis industry is still emerging and has suffered significant business fluctuations over the past couple of year. 10 In the United States, the development and growth of the regulated cannabis industry has generally been driven by state law and regulation. Accordingly, market conditions vary on a state-by-state basis.
Added
Net proceeds from the sale were used to service the Greenhouse Loan and pay other accrued expenses and closing costs. On January 30, 2024, a wholly owned subsidiary of Power REIT, PW Salisbury Solar LLC, sold its interest in a ground lease related to a utility scale solar farm located in Salisbury, Massachusetts. for gross proceeds of $1.2 million.
Removed
Given the regulatory hurdles including the impact on access to traditional forms of capital, a potential opportunity exists to generate higher investment yields than traditional real estate asset classes. Our investment thesis has focused on CEA cultivation assets in the form of greenhouses that should provide a competitive advantage within the industry.
Added
The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation. As part of the transaction, the existing municipal financing (“Municipal Debt”) and the regional bank loan (“PWSS Term Loan”) were paid off.
Removed
The Trust has attempted to work with cannabis tenants by offering relief in the form of amending leases whereby monthly cash payments are restructured to reduced amounts.
Added
On December 26, 2024, a wholly owned subsidiary of Power REIT, PW CO CanRE JKL LLC, sold its interest in a cannabis related greenhouse cultivation property located in Ordway, Colorado. The property was described in prior filings as Sherman 21 and 22 and was vacant because the construction was incomplete.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFailure to qualify as a REIT could result in additional expenses or additional adverse consequences, which may include the forced liquidation of some or all of our investments. 28 Although we currently intend to operate in a manner designed to allow us to continue to qualify as a REIT, future economic, market, legal, tax or other considerations might cause us to lose our REIT status, which could have a material adverse effect on our business, prospects, financial condition and results of operations, and could adversely affect our ability to successfully implement our business strategy and pay dividends.
Biggest changeAlthough we currently intend to operate in a manner designed to allow us to continue to qualify as a REIT, future economic, market, legal, tax or other considerations might cause us to lose our REIT status, which could have a material adverse effect on our business, prospects, financial condition and results of operations, and could adversely affect our ability to successfully implement our business strategy and pay dividends. 30 If an investment that was initially believed to be a real property asset is later deemed not to have been a real property asset at the time of investment, we could lose our status as a REIT or be precluded from investing according to our current business plan.
In order to assist us in complying with limitations on the concentration of ownership of REIT stock imposed by the Internal Revenue Code, among other purposes, our charter provides that no natural person or entity may, directly or indirectly, beneficially or constructively own more than 9.9% (in value or number of shares, whichever is more restrictive) of the aggregate amount of our outstanding shares of all classes.
In order to assist us in complying with limitations on the concentration of ownership of REIT stock imposed by the Internal Revenue Code, among other purposes, our charter provides that no natural person or entity may, directly or indirectly, beneficially or constructively own more than 9.9% (in value or number of shares, whichever is more restrictive) of the aggregate amount of our outstanding shares of all classes.
The market price for our common shares may be influenced by many factors, including the following: ● sale of our common shares by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our securities; ● our ability to obtain financings to implement our business plans; ● our ability to attract new customers; ● The impact of pandemics; ● changes in our capital structure or dividend policy, future issuances of securities and sales of large blocks of securities by our stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● reputational issues; ● our inability to successfully manage our business or achieve profitability; ● changes in general economic, political and market conditions in any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; ● market conditions or trends in our industry; and ● other events or factors, many of which may be out of our control.
The market price for our common shares may be influenced by many factors, including the following: ● sale of our common shares by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our securities; ● our ability to obtain financings to implement our business plans; ● our ability to attract new customers; ● The impact of pandemics; 37 ● changes in our capital structure or dividend policy, future issuances of securities and sales of large blocks of securities by our stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● reputational issues; ● our inability to successfully manage our business or achieve profitability; ● changes in general economic, political and market conditions in any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; ● market conditions or trends in our industry; and ● other events or factors, many of which may be out of our control.
We may significantly increase the amount of leverage we utilize at any time which could materially and adversely affect us, including the risk that: ● our cash flow from operations may be insufficient to make required payments of principal and interest on the debt or we may fail to comply with all of the other covenants contained in the debt, which is likely to result in (i) acceleration of such debt that we may be unable to repay from internal funds or to refinance on favorable terms, or at all, and/or (ii) the loss of some or all of our assets to foreclosure or sale; ● we may be unable to borrow additional funds as needed or on favorable terms, or at all; ● to the extent we borrow debt that bears interest at variable rates, increases in interest rates could materially increase our interest expense; ● our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase with higher financing costs; ● we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, shareholder distributions, including distributions currently contemplated or necessary to satisfy the requirements for REIT qualification or other purposes; and ● we may be unable to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all.
We may significantly increase the amount of leverage we utilize at any time which could materially and adversely affect us, including the risk that: ● our cash flow from operations may be insufficient to make required payments of principal and interest on the debt or we may fail to comply with all of the other covenants contained in the debt agreements, which is likely to result in (i) acceleration of such debt that we may be unable to repay from internal funds or to refinance on favorable terms, or at all, and/or (ii) the loss of some or all of our assets to foreclosure or sale; ● we may be unable to borrow additional funds as needed or on favorable terms, or at all; ● to the extent we borrow debt that bears interest at variable rates, increases in interest rates could materially increase our interest expense; 19 ● our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase with higher financing costs; ● we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, shareholder distributions, including distributions currently contemplated or necessary to satisfy the requirements for REIT qualification or other purposes; and ● we may be unable to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all.
Lesser and his affiliates and interests on the other hand, and such conflicts may be unfavorable to us. Our lessees and many future lessees will likely be structured as special purpose vehicles (“SPVs”), and therefore their ability to pay us is expected to be dependent solely on the revenues of a specific project, without additional credit support.
Lesser and his affiliates and interests on the other hand, and such conflicts may be unfavorable to us. 27 Our lessees and many future lessees will likely be structured as special purpose vehicles (“SPVs”), and therefore their ability to pay us is expected to be dependent solely on the revenues of a specific project, without additional credit support.
In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties or to protect them from the consequence of climate change. Our operating results may be negatively affected by potential development and construction delays and cost overruns.
In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties or to protect them from the consequence of climate change. 24 Our operating results may be negatively affected by potential development and construction delays and cost overruns.
Currency and Foreign Transactions Reporting Act of 1970 (the “Bank Secrecy Act”), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001. The Financial Crimes Enforcement Network (“FinCEN”), a bureau within the U.S.
Currency and Foreign Transactions Reporting Act of 1970 (the “Bank Secrecy Act”), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001. 42 The Financial Crimes Enforcement Network (“FinCEN”), a bureau within the U.S.
To the extent that our Series A Preferred Stock may have call or conversion provisions that are in our favor at a given time, such provisions may be detrimental to the returns experienced by the holders of the securities. 36 Inflation may negatively affect the value of our preferred stock and the dividends we pay.
To the extent that our Series A Preferred Stock may have call or conversion provisions that are in our favor at a given time, such provisions may be detrimental to the returns experienced by the holders of the securities. Inflation may negatively affect the value of our preferred stock and the dividends we pay.
In addition, the outbreak of a pandemic could disrupt our operations and could have material and adverse effects on our tenants and their operations, and in turn on our performance, financial condition, results of operations and cash flows due to, among other factors: ● a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant actions; ● the temporary inability of consumers and patients to purchase our tenant’s cannabis products due to a number of factors, including but limited to illness, dispensary closures or limitations on operations (including but not limited to shortened operating hours, social distancing requirements and mandated “curbside only” pickup), quarantine, financial hardship, and “stay at home” orders, could severely impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations; ● difficulty accessing equity and debt capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets ● Difficulty obtaining capital necessary to fund business operations and our tenants’ ability to fund their business operations and meet their obligations to us; ● because of the federal regulatory uncertainty relating to the regulated cannabis industry, our tenants may not be eligible for financial relief ● delays in construction at our properties may adversely impact our tenants’ ability to commence operations and generate revenues from projects, including ○ construction moratoriums by local, state or federal government authorities; ○ delays by applicable governmental authorities in providing the necessary authorizations to continue construction or commence operations; ○ reductions in construction team sizes to effectuate social distancing and other requirements; ○ infection by one or more members of a construction team necessitating a partial or full shutdown of construction; and ○ manufacturing and supply chain disruptions for materials sourced from other geographies which may be experiencing shutdowns and shipping delays. ● a general decline in business activity in the regulated cannabis industry would adversely affect our ability to grow our portfolio of regulated ● the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, would result in a deterioration in our ability We have a limited operating history and operate in an industry in its very early stages of development.
In addition, the outbreak of a pandemic could disrupt our operations and could have material and adverse effects on our tenants and their operations, and in turn on our performance, financial condition, results of operations and cash flows due to, among other factors: ● a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant actions; 20 ● the temporary inability of consumers and patients to purchase our tenant’s cannabis products due to a number of factors, including but limited to illness, dispensary closures or limitations on operations (including but not limited to shortened operating hours, social distancing requirements and mandated “curbside only” pickup), quarantine, financial hardship, and “stay at home” orders, could severely impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations; ● difficulty accessing equity and debt capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets ● Difficulty obtaining capital necessary to fund business operations and our tenants’ ability to fund their business operations and meet their obligations to us; ● because of the federal regulatory uncertainty relating to the regulated cannabis industry, our tenants may not be eligible for financial relief ● delays in construction at our properties may adversely impact our tenants’ ability to commence operations and generate revenues from projects, including ○ construction moratoriums by local, state or federal government authorities; ○ delays by applicable governmental authorities in providing the necessary authorizations to continue construction or commence operations; ○ reductions in construction team sizes to effectuate social distancing and other requirements; ○ infection by one or more members of a construction team necessitating a partial or full shutdown of construction; and ○ manufacturing and supply chain disruptions for materials sourced from other geographies which may be experiencing shutdowns and shipping delays. ● a general decline in business activity in the regulated cannabis industry would adversely affect our ability to grow our portfolio of regulated ● the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, would result in a deterioration in our ability We have a limited operating history and operate in an industry in its very early stages of development that has experienced significant business challenges.
In addition, we would realize an economic loss on any and all improvements made to properties that were to be used in connection with cannabis cultivation and processing. 40 We may be subject to anti-money laundering laws and regulations in the United States.
In addition, we would realize an economic loss on any and all improvements made to properties that were to be used in connection with cannabis cultivation and processing. We may be subject to anti-money laundering laws and regulations in the United States.
Furthermore, if holders receive the greater of the full trading price of the Series A Preferred Stock on the last date prior to the first public announcement of an event described in the preceding sentence, or the $25.00 liquidation preference per share of Series A Preferred Stock plus accrued and unpaid dividends (whether or not declared) to, but not including, the date of such event, pursuant to the occurrence of any of the events described in the preceding sentence, then holders will not have any voting rights with respect to the events described in the preceding sentence. 37 Dividends on our Series A Preferred Stock can be suspended and not paid on a current basis.
Furthermore, if holders receive the greater of the full trading price of the Series A Preferred Stock on the last date prior to the first public announcement of an event described in the preceding sentence, or the $25.00 liquidation preference per share of Series A Preferred Stock plus accrued and unpaid dividends (whether or not declared) to, but not including, the date of such event, pursuant to the occurrence of any of the events described in the preceding sentence, then holders will not have any voting rights with respect to the events described in the preceding sentence. 39 Dividends on our Series A Preferred Stock can be suspended and not paid on a current basis.
Our Preferred Stock is subject to interest rate risk. Distributions payable on our Series A Preferred Stock are subject to interest rate risk. Because dividends on our Series A Preferred Stock are fixed, our costs may increase upon maturity or redemption of the securities.
Distributions payable on our Series A Preferred Stock are subject to interest rate risk. Because dividends on our Series A Preferred Stock are fixed, our costs may increase upon maturity or redemption of the securities.
Any potential delisting of our common shares from the NYSE American could, among other things, depress our share price, substantially limit liquidity of our common shares and materially adversely affect our ability to raise capital on terms acceptable to us, or at all. 38 The U.S. federal government’s approach towards cannabis laws may be subject to change or may not proceed as previously outlined.
Any potential delisting of our common shares from the NYSE American could, among other things, depress our share price, substantially limit liquidity of our common shares and materially adversely affect our ability to raise capital on terms acceptable to us, or at all. 40 The U.S. federal government’s approach towards cannabis laws may be subject to change or may not proceed as previously outlined.
Any lease payment defaults by a tenant could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders.
Any lease payment defaults by a tenant has and could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders.
We might not be entitled to the statutory relief described in this paragraph in all circumstances. 29 If we are deemed to be subject to Section 280E of the Code because of the business activities of our tenants, the resulting disallowance of tax deductions could cause us to incur U.S. federal income tax and jeopardize our REIT status.
We might not be entitled to the statutory relief described in this paragraph in all circumstances. 31 If we are deemed to be subject to Section 280E of the Code because of the business activities of our tenants, the resulting disallowance of tax deductions could cause us to incur U.S. federal income tax and jeopardize our REIT status.
Such a situation could materially harm our business. 21 Because we may distribute a significant portion of our income to our stockholders or lenders, we will continue to need additional capital to make new investments. If additional funds are unavailable or not available on favorable terms, our ability to make new investments will be impaired.
Such a situation could materially harm our business. 23 Because we may distribute a significant portion of our income to our stockholders or lenders, we will continue to need additional capital to make new investments. If additional funds are unavailable or not available on favorable terms, our ability to make new investments will be impaired.
Currently, there are 33 states plus the District of Columbia and certain U.S. territories that have laws and/or regulations that recognize, in one form or another, consumer use of cannabis in connection with medical treatment. Of those, 11 states plus the District of Columbia and certain U.S. territories have laws and/or regulations that permit the adult-use of cannabis.
Currently, there are 47 states plus the District of Columbia and certain U.S. territories that have laws and/or regulations that recognize, in one form or another, consumer use of cannabis in connection with medical treatment. Of those, 11 states plus the District of Columbia and certain U.S. territories have laws and/or regulations that permit the adult-use of cannabis.
The Trust is not obligated to distribute a dividend on its Series A Preferred Stock on a current basis. During 2023, the Trust did not declare dividends on Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock Dividends not declared accumulate and are added to the liquidation preference.
The Trust is not obligated to distribute a dividend on its Series A Preferred Stock on a current basis. During 2024, the Trust did not declare dividends on Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock. Dividends not declared accumulate and are added to the liquidation preference.
In any such case, you could lose all or part of your investment. 15 Risks Related to our Financial Position and Liquidity We have incurred a loss for the year ended December 31, 2023 and may be unable to generate sufficient revenue to cover expenses or generate net income.
In any such case, you could lose all or part of your investment. Risks Related to our Financial Position and Liquidity We have incurred a loss for the year ended December 31, 2024 and may be unable to generate sufficient revenue to cover expenses or generate net income.
If we are unable to comply with the covenants in our loan agreements, we might be adversely affected. The loan secured by our CEA portfolio is currently in default and the lender has commenced litigation.
If we are unable to comply with the covenants in our loan agreements, we might be adversely affected. The Greenhouse Loan secured by our greenhouse portfolio is currently in default and the lender has commenced litigation.
There can be no assurance that a leveraging strategy will be successful. If any one of these events were to occur, our business (including our financial performance and condition) and our ability to make distributions to our stockholders could be materially and adversely affected.
There can be no assurance that a leveraging strategy will be successful. If any one of these events were to occur, our business (including our financial performance and condition) and our ability to make distributions to our stockholders would likely be materially and adversely affected.
Because we may distribute a significant portion of our income to our shareholders or lenders, our business may from time to time require substantial amounts of new capital if we are to achieve our growth plans. In addition, in order to continue making acquisitions, we would require additional capital.
Because we may distribute a significant portion of our income to our shareholders or lenders, our business may from time to time require substantial amounts of new capital to pursue our growth plans. In addition, in order to continue making acquisitions, we would require additional capital.
The balance of the loan as of December 31, 2023 is $14,412,000 (net of approximately $276,000 of capitalized debt costs). We have substantial debt and preferred shares outstanding with substantial liquidation preference, which could adversely affect our overall financial health and our operating flexibility. We require cash flows to satisfy our debt service.
The balance of the loan as of December 31, 2024 is $14,198,000 (net of approximately $267,000 of capitalized debt costs). We have substantial debt and preferred shares outstanding with substantial liquidation preference, which could adversely affect our overall financial health and our operating flexibility. We require cash flows to satisfy our debt service.
Certain of our tenants may opt to cultivate adult-use cannabis in our medical-use cannabis facilities, which may in turn subject our cannabis tenant, us and our properties to federal enforcement actions. and could result in our inability to implement our business plan. 39 We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation, the loss of such assets would have a severe negative affect on our operations and liquidity.
Certain of our tenants may opt to cultivate adult-use cannabis in our medical-use cannabis facilities, which may in turn subject our cannabis tenant, us and our properties to federal enforcement actions. 41 We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation, the loss of such assets would have a severe negative affect on our operations and liquidity.
In March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver (See Note 13 Subsequent Events). Unfortunately, this may lead to distressed sales which would have a negative impact on our prospects.
In March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver. Unfortunately, this may lead to distressed sales which would have a negative impact on our prospects.
Of the total amount of cash, approximately $2.2 million is non-restricted cash available for general corporate purposes and $1.9 million is restricted cash related to the Greenhouse Loan.
Of the total amount of cash, approximately $2.2 million is non-restricted cash available for general corporate purposes and approximately $37,000 is restricted cash related to the Greenhouse Loan.
Although the Trust expects to deploy additional equity capital principally for the purpose of seeking to make accretive transactions, and in such cases seeks to not dilute the economic value of equity securities held by existing holders, such additional issuances may dilute existing equity securities holders’ percentage ownership of the Trust, and the percentage of voting power they hold, depending on the terms of the newly issued equity securities.
Although the Trust expects to deploy additional equity capital principally for the purpose of seeking to make accretive transactions, and in such cases seeks to not dilute the economic value of equity securities held by existing holders, such additional issuances may dilute existing equity securities holders’ percentage ownership of the Trust, and the percentage of voting power they hold, depending on the terms of the newly issued equity securities. 38 Our Preferred Stock is subject to interest rate risk.
Power REIT entered into a Greenhouse Loan with initial availability of $20 million that is non-recourse to Power REIT and has liens against the Power REIT greenhouse portfolio of properties. The balance of the loan as of December 31, 2023, is approximately $14,358,000 and is in default.
Power REIT entered into a Greenhouse Loan with initial availability of $20 million that is non-recourse to Power REIT and has liens against the Power REIT greenhouse portfolio of properties. The balance of the loan as of December 31, 2024, is approximately $16.7 million and is in default.
However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity, including its ability to sell properties, and the failure to do so could negatively impact its future operations. In early 2024, the Trust sold three properties which should help with liquidity.
However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity, including its ability to sell properties, and the failure to do so could negatively impact its future operations. In 2024, the Trust sold four properties in an effort to help with liquidity.
Infrastructure assets may be subject to the risk of fluctuations in commodity prices and in the supply of and demand for infrastructure consumption. The operations and financial performance of companies in the infrastructure sector may be directly or indirectly affected by commodity prices and fluctuations in infrastructure supply and demand.
The operations and financial performance of companies in the infrastructure sector may be directly or indirectly affected by commodity prices and fluctuations in infrastructure supply and demand.
On January 23, 2023, the lease was amended to restructure the timing of rent payments and eliminate the funding of remaining capital improvements for the cogeneration project, which includes eliminating payments that were expected to be paid to IntelliGen, a related party.
On January 23, 2023, the lease was amended to restructure the timing of rent payments and eliminate the funding of remaining capital improvements for the cogeneration project, which includes eliminating payments that were expected to be paid to IntelliGen, a related party. Based on the amendment of the terms with IntelliGen, a total of $1,102,500 was paid for equipment supplied.
It is possible that we may incur more debt, and issue additional preferred securities as we pursue our business strategy. In the case of indebtedness, specified amounts of principal and interest are customarily payable on specified due dates.
This debt and these preferred securities rank senior to the Trust’s common shares in our capital structure. It is possible that we may incur more debt, and issue additional preferred securities as we pursue our business strategy. In the case of indebtedness, specified amounts of principal and interest are customarily payable on specified due dates.
Historically, commodity prices have been cyclical and have exhibited significant volatility. Should infrastructure companies experience variations in supply and demand, the resulting decline in operating or financial performance could adversely affect the value or quality of our assets. Infrastructure investments are subject to obsolescence risks.
Should infrastructure companies experience variations in supply and demand, the resulting decline in operating or financial performance could adversely affect the value or quality of our assets. Infrastructure investments are subject to obsolescence risks.
Nevertheless, if we were deemed to be an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our operations and the price of our common shares.
Nevertheless, if we were deemed to be an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our operations and the price of our common shares. 32 Net leases may not result in fair market lease rates over time.
On December 11, 2023, the reported low sale price of our common shares was $.50, while the reported high sales price was $5.59, on February 2, 2023. We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance or prospects.
On December 11, 2024, the reported low sale price of our common shares was $.42 on May 8, 2024, while the reported high sales price was $2.52, on August 7, 2024. We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance or prospects.
Actual events involving reduced or limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems. 18 We are actively monitoring the effects these disruptions and increasing inflation could have on our operations.
Actual events involving reduced or limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems.
The percentage of leverage we employ will vary depending on our available capital, our ability to obtain and access financing arrangements with lenders, debt restrictions contained in financing arrangements.
We currently have secured debt against properties in our portfolio, and we may incur additional debt. The percentage of leverage we employ will vary depending on our available capital, our ability to obtain and access financing arrangements with lenders, debt restrictions contained in financing arrangements.
Further increasing inflation has raised operating costs for many businesses and, in the future, could impact demand or pricing manufacturing of our drug candidates or services providers, foreign exchange rates or employee wages.
Further increasing inflation has raised operating costs for many businesses and, in the future, could impact demand foreign exchange rates or employee wages.
The incurrence by the Trust of additional debt, and the issuance by the Trust of additional preferred securities, may limit or eliminate the amounts available to the Trust to pay dividends on our Series A Preferred Stock and common shares. We are dependent upon Mr. David H. Lesser for our success.
Incurring additional debt or issuing additional preferred securities, may limit or eliminate the amounts available to the Trust to pay dividends on our Series A Preferred Stock and common shares. We are dependent upon Mr. David H. Lesser for our success. We are dependent on the diligence, expertise and business relationships of our management team, particularly Mr. David H.
As of December 31, 2023, $1,102,500 had been paid to IntelliGen for equipment supplied. 25 Although our Declaration of Trust permits this type of business relationship and a majority of our disinterested trustees must approve, and in those instances did approve, Power REIT’s involvement in such transactions, in any such circumstance, there may be conflicts of interest between Power REIT on one hand, and subsidiaries of MILC, IntelliGen, Mr.
Although our Declaration of Trust permits this type of business relationship and a majority of our disinterested trustees must approve, and in those instances did approve, Power REIT’s involvement in such transactions, in any such circumstance, there may be conflicts of interest between Power REIT on one hand, and subsidiaries of MILC, IntelliGen, Mr.
The illiquidity of real estate investments might delay or prevent us from selling properties that we determine no longer meet the strategic and financial criteria we apply and could significantly affect our ability to respond in a timely manner to adverse changes in the performance of our properties and harm our financial condition.
There can be no assurance that the impaired carrying values will equate to the ultimately realizable value of such assets. 25 The illiquidity of real estate investments might delay or prevent us from selling properties that we determine no longer meet the strategic and financial criteria we apply and could significantly affect our ability to respond in a timely manner to adverse changes in the performance of our properties and harm our financial condition.
Any such loss could materially and adversely affect our business and our financial condition and results of operations. 22 To the extent that significant changes in the climate occur, we may experience extreme weather and changes in precipitation and temperature and rising sea levels, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions.
To the extent that significant changes in the climate occur, we may experience extreme weather and changes in precipitation and temperature and rising sea levels, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions.
Net leases may not result in fair market lease rates over time. We expect a portion of our future income to come from net leases, whereby the lessee is responsible for all the costs, insurance and taxes of a property, including maintenance.
We expect a portion of our future income to come from net leases, whereby the lessee is responsible for all the costs, insurance and taxes of a property, including maintenance.
Any proceeding that may be brought against us could have a material adverse effect on our business, financial condition and results of operations. 20 Violations of any U.S. federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements, arising from either civil or criminal proceedings brought by either the U.S. federal government or private citizens, including, but not limited to, property seizures, disgorgement of profits, cessation of business activities or divestiture.
Violations of any U.S. federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements, arising from either civil or criminal proceedings brought by either the U.S. federal government or private citizens, including, but not limited to, property seizures, disgorgement of profits, cessation of business activities or divestiture.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and our business could be adversely affected.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and our business could be adversely affected. 33 We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.
Either of these outcomes could adversely affect our financial condition and results of operations. 31 Provisions of the Maryland General Corporation Law and our Declaration of Trust and Bylaws could deter takeover attempts and have an adverse impact on the price of our common shares.
Provisions of the Maryland General Corporation Law and our Declaration of Trust and Bylaws could deter takeover attempts and have an adverse impact on the price of our common shares.
Such fines, penalties, administrative sanctions, convictions or settlements could have a material adverse effect on us, including, but not limited to: ● our reputation and our ability to conduct business and/or maintain our current business relationships; ● the listing of our securities on the NYSE American, LLC (the “NYSE American”); and ● the market price of our common shares.
Such fines, penalties, administrative sanctions, convictions or settlements could have a material adverse effect on us, including, but not limited to: ● our reputation and our ability to conduct business and/or maintain our current business relationships; ● the listing of our securities on the NYSE American, LLC (the “NYSE American”); and ● the market price of our common shares. 22 Certain of Power REIT’s properties have been negatively impacted by State and local government regulations and approvals that relate to cannabis cultivation.
Pittsburgh & West Virginia Railroad (“PWV”), one of our subsidiaries, entered into a Loan Agreement in the amount of $15,500,000 that is non-recourse to Power REIT and secured by our equity interest in our subsidiary PWV which is pledged as collateral.
As of December 31, 2024, the balance of the 2015 PWRS Loan was approximately $6,492,000 (net of unamortized debt costs of approximately $213,000). 18 Pittsburgh & West Virginia Railroad (“PWV”), one of our subsidiaries, entered into a Loan Agreement in the amount of $15,500,000 that is non-recourse to Power REIT and secured by our equity interest in our subsidiary PWV which is pledged as collateral.
In an effort to conserve liquidity and create financial flexibility, the Trust has not declared dividends on its preferred shares since the fourth quarter of 2022. As a result, unpaid dividends are accruing and increasing the liquidation preference for our preferred shares.
In an effort to conserve liquidity and create financial flexibility, the Trust has not declared dividends on its preferred shares since the fourth quarter of 2022. As a result, unpaid dividends increase the liquidation preference for our preferred shares. As of December 31, 2024, the amount of unpaid dividends on the outstanding preferred shares is approximately $1,469,000 .
If we find that the carrying value of goodwill or certain intangible assets exceeds estimated fair value, we will reduce the carrying value of the real estate investment or goodwill or intangible asset to the estimated fair value, and we will recognize impairment with respect to such investments or goodwill or intangible assets. 23 Impairment of long-lived assets is required to be recorded as a non-cash operating expense.
If we find that the carrying value of goodwill or certain intangible assets exceeds estimated fair value, we will reduce the carrying value of the real estate investment or goodwill or intangible asset to the estimated fair value, and we will recognize impairment with respect to such investments or goodwill or intangible assets.
There can be no guarantee that our stock price will remain at current prices or that future sales of our common shares will not be at prices lower than those sold to investors. 35 Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due short sellers of common shares, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company.
Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due short sellers of common shares, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of such companies.
In addition, Maryland law prohibits the payment of dividends if we are unable to pay our debts as they come due. 16 PW Regulus Solar, LLC (“PWRS”), one of our subsidiaries, entered into the 2015 PWRS Loan Agreement (as defined below) that is non-recourse to Power REIT and secured by all of PWRS’ interest in the land and intangibles.
PW Regulus Solar, LLC (“PWRS”), one of our subsidiaries, entered into the 2015 PWRS Loan Agreement (as defined below) that is non-recourse to Power REIT and secured by all of PWRS’ interest in the land and intangibles.
State and local regulation of cannabis may negatively impact our properties and the viability of tenant operations related thereto. Due to the illegal status of cannabis at the national level, the power to regulate the market through licensing, taxes, and other instruments lies with state and local governments.
Due to the illegal status of cannabis at the national level, the power to regulate the market through licensing, taxes, and other instruments lies with state and local governments.
In 2023, we recorded approximately $8.2 million in non-cash impairment charges. In 2022, we recorded approximately $16.7 million in non-cash impairment charges. Any decline in the estimated fair values of our assets could result in additional impairment charges in the future. It is possible that such impairments, if required, could be material.
Any decline in the estimated fair values of our assets could result in additional impairment charges in the future. It is possible that such impairments, if required, could be material.
Furthermore, our tenants and properties are concentrated in the regulated cannabis industry, an industry in its very early stages of development with significant uncertainties, and we cannot predict how tenant demand and competition for these properties will change over time.
Furthermore, our tenants and properties are concentrated in the regulated cannabis industry, an industry in its early stages of development with significant uncertainties, and we cannot predict how tenant demand and competition for these properties will change over time. We cannot assure you that we will be able to operate our business successfully or profitably or find additional suitable investments.
We cannot assure you that we will be able to operate our business successfully or profitably or find additional suitable investments. There can be no assurance that we will be able to continue to generate sufficient revenue from operations to pay our operating expenses and make distributions to stockholders.
There can be no assurance that we will be able to continue to generate sufficient revenue from operations to pay our operating expenses and make distributions to stockholders.
We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively. 30 In addition, several proposals have been made that would make substantial changes to the federal income tax laws generally.
We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively.
If we should fail to generate sufficient revenue to pay our outstanding secured debt obligations, the lenders may foreclose on the security pledged decreasing our ability to generate revenue and our ability to pay dividends.
If we should fail to generate sufficient revenue to pay our outstanding secured debt obligations, the lenders may foreclose on the security pledged decreasing our ability to generate revenue and our ability to pay dividends. In addition, Maryland law prohibits the payment of dividends if we are unable to pay our debts as they come due.
As a result, we could be held liable, under some circumstances, for debts incurred by the lessee company relating to the property.
As a result, we could be held liable, under some circumstances, for debts incurred by the lessee company relating to the property. Either of these outcomes could adversely affect our financial condition and results of operations.
These properties may be difficult to sell or re-lease upon tenant defaults or lease terminations, either of which could adversely affect our business. Our portfolio of properties is concentrated in greenhouse properties suitable for the cultivation of cannabis used therefore, we are subject to risks inherent in investments heavily in a single industry.
Our real estate investments are concentrated in greenhouse properties suitable for the cultivation of cannabis, and a decrease in demand for such facilities could materially and adversely affect our business. These properties may be difficult to sell or re-lease upon tenant defaults or lease terminations, either of which could adversely affect our business.
Our property portfolio has a high concentration of properties located in certain states. Certain of our properties are located in areas that may experience catastrophic weather and other natural events from time to time, including hurricanes or other severe weather, flooding fires, snow or ice storms, windstorms or earthquakes.
Certain of our properties are located in areas that may experience catastrophic weather and other natural events from time to time, including hurricanes or other severe weather, flooding fires, snow or ice storms, windstorms or earthquakes. These adverse weather and natural events could cause substantial damages or losses to our properties which could exceed our insurance coverage.
Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in significant growth stages of development. We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations.
We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations.
The results of our operations and the execution on our business plan depend on the availability of additional opportunities for investment, the performance of our existing properties and tenants, the evolution of tenant demand for regulated cannabis facilities, competition, the evolution of alternative capital sources for potential tenants, the availability of adequate equity and debt financing, the federal and state regulatory environment relating to the regulated cannabis industry, and conditions in the financial markets and economic conditions. 19 Our tenants have limited operating histories and may be more susceptible to payment and other lease defaults, which could materially and adversely affect our business Single tenants currently occupy our properties, and we expect that our properties will continue to be operated by single tenants.
The results of our operations and the execution on our business plan depend on the availability of additional opportunities for investment, the performance of our existing properties and tenants, the evolution of tenant demand for regulated cannabis facilities, competition, the evolution of alternative capital sources for potential tenants, the availability of adequate equity and debt financing, the federal and state regulatory environment relating to the regulated cannabis industry, and conditions in the financial markets and economic conditions.
We can provide no assurance that the industries utilizing our assets will succeed and if a tenant fails there is no visibility as to when we would find a replacement tenant or if there are any potential solutions in the broader market. 32 Our real estate investments are concentrated in greenhouse properties suitable for the cultivation of cannabis, and a decrease in demand for such facilities could materially and adversely affect our business.
We can provide no assurance that the industries utilizing our assets will succeed and if a tenant fails there is no visibility as to when we would find a replacement tenant or if there are any potential solutions in the broader market.
The Trust could lose its common shares listing or its Series A Preferred Stock listing, both on the NYSE American, depending on a number of factors, including a failure by us to continue to qualify as a REIT, a failure to meet the NYSE American ongoing listing requirements, including those relating to the number of shareholders, the price of the Trust’s securities and the amount and composition of the Trust’s assets, changes in NYSE American ongoing listing requirements and other factors. 34 Low trading volumes in the Trust’s listed securities may adversely affect holders’ ability to resell their securities at prices that are attractive, or at all.
The Trust’s common shares listing or its Series A Preferred Stock could be subject to delisting by, the NYSE American, based on a number of factors, including a failure by us to continue to qualify as a REIT, a failure to meet the NYSE American ongoing listing requirements, including those relating to the number of shareholders, the price of the Trust’s securities and the amount and composition of the Trust’s assets, changes in NYSE American ongoing listing requirements and other factors.
Interest rates have risen significantly of late relative to their recent historically low levels which will continue to have a negative impact on the perceived or actual values of our assets and dividends, and consequently the prices of our securities may decline. 27 Furthermore, to the extent the Trust has borrowed funds, a rise in interest rates may result in re-financing risk when those borrowings become due, and the Trust may be required to pay higher interest rates or issue additional equity to refinance its borrowings, which could adversely affect the Trust’s financial condition and results of operations.
Furthermore, to the extent the Trust has borrowed funds, a rise in interest rates may result in re-financing risk when those borrowings become due, and the Trust may be required to pay higher interest rates or issue additional equity to refinance its borrowings, which could adversely affect the Trust’s financial condition and results of operations. 29 Our quarterly results may fluctuate.
In March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver (See Note 13 Subsequent Events). If our acquisitions or our overall business performance fail to meet expectations, we could be restricted from paying dividends to shareholders and default on our loans, which are secured by collateral in our properties and assets.
If our acquisitions or our overall business performance fail to meet expectations, we could be restricted from paying dividends to shareholders and default on our loans, which are secured by collateral in our properties and assets.
To the extent we pay dividends in the future, the differing treatment of dividends received from REITs and other corporations might cause individual investors to view an investment in REITs as less attractive relative to other corporations, which might negatively affect the value of our shares.
To the extent we pay dividends in the future, the differing treatment of dividends received from REITs and other corporations might cause individual investors to view an investment in REITs as less attractive relative to other corporations, which might negatively affect the value of our shares. 26 The issuance of securities with claims that are senior to those of our common shares, including our Series A Preferred Stock, may limit or prevent us from paying dividends on our common shares.
If a property owner were to assert such a claim against us, we may be required to devote significant resources and costs to defending ourselves against such a claim, and if a property owner were to be successful on such a claim, our cannabis tenant may be unable to continue to operate its business in its current form at the property, which could materially adversely impact such tenant’s business and the value of our property, our business and, financial condition and results of operations. 41 Further, although we are not currently subject to any litigation, from time to time in the normal course of our business operations, we, or any of our subsidiaries, may become subject to litigation, complaints, enforcement actions and governmental inquiries that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required.
If a property owner were to assert such a claim against us, we may be required to devote significant resources and costs to defending ourselves against such a claim, and if a property owner were to be successful on such a claim, our cannabis tenant may be unable to continue to operate its business in its current form at the property, which could materially adversely impact such tenant’s business and the value of our property, our business and, financial condition and results of operations.
Furthermore, we cannot give any assurance that our cannabis tenants, and any future cannabis tenants, are currently operating, and will continue to operate, in strict compliance with state and local rules and regulations in which they operate.
Furthermore, we cannot give any assurance that our cannabis tenants, and any future cannabis tenants, are currently operating, and will continue to operate, in strict compliance with state and local rules and regulations in which they operate. Any proceeding that may be brought against us could have a material adverse effect on our business, financial condition and results of operations.
Moreover, environmental laws also may impose liens on property or other restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us or our lessees from operating such properties.
Accordingly, we may incur significant costs to defend against claims of liability, to comply with environmental regulatory requirements, to remediate any contaminated property, or to pay personal injury claims. 28 Moreover, environmental laws also may impose liens on property or other restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us or our lessees from operating such properties.
However, the Greenhouse Loan is non-recourse to Power REIT which means that in the event it cannot resolve issues with the bank and they foreclose on the properties, Power REIT should be able to continue as a going concern albeit with a significantly smaller portfolio of assets.
The Greenhouse Loan is non-recourse to Power REIT which means that in the event it cannot resolve issues with the lender and they foreclose on the properties, Power REIT should be able to continue is operation albeit with a smaller portfolio of assets given that non-restricted cash should provide greater than twelve months of liquidity for capital needs unrelated to the greenhouse properties which are security for the Greenhouse Loan.
Lesser is one of our major shareholders, on occasion, those other interests of his may conflict with his interests in Power REIT, and such conflicts may be unfavorable to us.
Lesser has other business interests to which he dedicates a portion of his time that are unrelated to Power REIT. Ms. Hollander is also a part time employee. Although Mr. Lesser is one of our major shareholders, on occasion, those other interests of his may conflict with his interests in Power REIT, and such conflicts may be unfavorable to us.
Historically, the Trust’s revenue has been concentrated to a relatively limited number of investments, industries and lessees. During the twelve months ended December 31, 2023, Power REIT collected approximately 84% of its consolidated revenue from two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 45% and 39% of consolidated revenue respectively.
Historically, the Trust’s revenue has been derived from a relatively limited number of investments, industries and lessees. During the twelve months ended December 31, 2024, Power REIT collected approximately 88% of its consolidated revenue from the tenants of three properties.
Because the Series A Preferred Stock has no maturity date, investors seeking liquidity may be limited to selling their shares of Series A Preferred Stock in the secondary market.
Power REIT’s Series A Preferred Stock is traded on the NYSE American under the ticker “PW PRA”. The Series A Preferred Stock has been listed since March 18, 2014. Because the Series A Preferred Stock has no maturity date, investors seeking liquidity may be limited to selling their shares of Series A Preferred Stock in the secondary market.
As a result, the presence of significant mold at any of our properties could require us to undertake a costly remediation program to contain or remove the mold from the affected property or development project. 26 Accordingly, we may incur significant costs to defend against claims of liability, to comply with environmental regulatory requirements, to remediate any contaminated property, or to pay personal injury claims.
As a result, the presence of significant mold at any of our properties could require us to undertake a costly remediation program to contain or remove the mold from the affected property or development project.
Further, extreme price fluctuation upwards or downwards could lead to the development of alternatives to existing energy-related infrastructure and could impair the value of our investments. 33 Volatility in commodity prices or in the supply of and demand for infrastructure assets may make it more difficult for companies in the infrastructure sector to raise capital to the extent the market perceives that their performance may be tied directly or indirectly to commodity prices.
Volatility in commodity prices or in the supply of and demand for infrastructure assets may make it more difficult for companies in the infrastructure sector to raise capital to the extent the market perceives that their performance may be tied directly or indirectly to commodity prices. Historically, commodity prices have been cyclical and have exhibited significant volatility.
Certain of Power REIT’s properties have been negatively impacted by State and local government regulations and approvals that relate to cannabis cultivation. Power REIT does not believe that its business is likely to be negatively impacted by existing or probable federal government regulation or the need for any federal governmental approval. Our business strategy includes growth plans.
Power REIT does not believe that its business is likely to be negatively impacted by existing or probable federal government regulation or the need for any federal governmental approval. Our business strategy includes growth plans. Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth or investments effectively.
We cannot predict whether any of these proposed changes will become law. We cannot predict the long-term effect of any recent or future tax law changes on REITs and their stockholders. Prospective investors are urged to consult with their tax advisors regarding the effect of potential changes to the federal tax laws on an investment in our stock.
Prospective investors are urged to consult with their tax advisors regarding the effect of potential changes to the federal tax laws on an investment in our stock.
For the year ended December 31, 2023, the Trust determined that there was substantial doubt as to its ability to continue as a going concern as a result of net losses incurred, expected reduced revenue and increased property maintenance expenses related to the greenhouse portfolio.
The Trust determined that there was substantial doubt as to its ability to continue as a going concern for a period of twelve months from the date of the filing with the SEC of this Annual Report on Form 10-K as a result of net losses incurred, and increased property maintenance expenses related to the greenhouse portfolio.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: ● Risk assessments designed to help identify material cybersecurity risks to our critical systems, and our IT environment; ● The use of external service providers to assess, test or otherwise assist with aspects of our security controls; ● Cybersecurity awareness training of our employees and senior management including consultation with third parties as deemed necessary; ● A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● We design and assess our program using the National Institute Cybersecurity Framework (“NIST CSF”) as a set of guiding principles.
Biggest changeOur cybersecurity risk management program includes: ● Risk assessments designed to help identify material cybersecurity risks to our critical systems, and our IT environment; ● The use of external service providers to assess, test or otherwise assist with aspects of our security controls; ● Cybersecurity awareness training of our employees and senior management including consultation with third parties as deemed necessary; ● A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● We design and assess our program using the National Institute Cybersecurity Framework (“NIST CSF”) as a set of guiding principles. 44 Our management team is responsible for oversight and administration of our cyber risk management protocol, and for informing relevant stakeholders regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents.
In addition, we have developed a risk mitigation plan to address such risks, and where necessary, remediate potential vulnerabilities identified through the annual assessment process. 42 We employ a risk management strategy for the assessment, identification and management of material risks stemming from cybersecurity threats.
In addition, we have developed a risk mitigation plan to address such risks, and where necessary, remediate potential vulnerabilities identified through the annual assessment process. We employ a risk management strategy for the assessment, identification and management of material risks stemming from cybersecurity threats.
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Our management team is responsible for oversight and administration of our cyber risk management protocol, and for informing relevant stakeholders regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Note 8 of our Financial Statements for discussion of impairments and of our assets held for sale. 43 Below is a chart that summarizes our properties owned as of December 31, 2023: Property Type/Name Acres Size 1 Gross Book Value 3 Railroad Property P&WV - Norfolk Southern 112 miles $ 9,150,000 Solar Farm Land Massachusetts PWSS 7,9 54 5.7 1,005,538 California PWRS 447 82.0 9,183,548 Solar Total 501 87.7 $ 10,189,086 Greenhouse - Cannabis Ordway, Colorado Maverick 1 4,6,7 5.20 16,416 1,594,582 Tamarack 18 4,6 2.11 12,996 1,075,000 Maverick 14 4,6,7 5.54 26,940 1,908,400 Sherman 6 - Green Street/Chronic 5,6,7,9 5.00 26,416 1,995,101 Tamarack 7 4,6 4.32 18,000 1,364,585 Tamarack 7 (MIP) 5 636,351 Tamarack 19 4,6 2.11 18,528 1,311,116 Tamarack 8 - Apotheke 5,6 4.31 21,548 2,061,542 Tamarack 14 4,6,7,9 2.09 24,360 2,252,187 Tamarack 13 4,6,7 2.37 9,384 1,031,712 Tamarack 3 4,6 2.20 24,512 2,080,414 Tamarack 27 and 28 4,6 4.00 38,440 1,872,340 Sherman 21 and 22 2,4,6 10.00 24,880 1,782,136 Maverick 5 - Jacksons Farms 5,6 5.20 15,000 1,358,634 Tamarack 4 and 5 4,6,7 4.41 27,988 2,239,870 Walsenburg, Colorado 4,6,7 35.00 102,800 4,219,170 Desert Hot Springs, California 6,7 0.85 37,000 7,685,000 Vinita, Oklahoma 4,6,7 9.35 40,000 2,593,313 Marengo Township, Michigan 4 61.14 556,146 24,171,151 Greenhouse - Food Crop O’Neill, Nebraska 4 90.88 1,121,153 9,350,000 Greenhouse Total 256.08 2,162,507 $ 72,582,605 Total Portfolio (Real Estate Owned) $ 91,921,691 Mortgage Loan 8 $ 850,000 Impairment 20,673,182 Depreciation and Amortization 6,739,995 Net Book Value Net of Impairment, Depreciation and Amortization $ 65,358,514 1 Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet 2 Building structure construction incomplete 3 Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs 4 Property is vacant 5 Tenant is not current on rent/in default 6 An impairment has been taken against this asset 7 Asset held for sale 8 Loan secured by a second mortgage related to property in Maine sold on November 1, 2023 9 Property sold after December 31, 2023 - see Note 13 Subsequent Events 44 Railway Property Pittsburgh & West Virginia Railroad (“P&WV”), a wholly owned subsidiary, is a business trust organized under the laws of Pennsylvania which owns railroad assets that are currently leased to Norfolk Southern Railway (“NSC”) pursuant to a 99-year lease that became effective in 1964 and is subject to an unlimited number of 99-year renewal periods under the same terms and conditions, including annual rent payments, at the option of NSC (the “Railroad Lease”).
Biggest changeSee Note 8 of our Financial Statements for discussion of impairments and of our assets held for sale. 45 Below is a chart that summarizes our properties owned as of December 31, 2024: Property Type/Name Acres Size 1 Gross Book Value 3 Railroad Property P&WV - Norfolk Southern 112 miles $ 9,150,000 Solar Farm Land California PWRS 447 82 9,183,548 Solar Total 447 82 $ 9,183,548 Greenhouse - Cannabis Ordway, Colorado Maverick 1 2,4,6,7 5.20 17,368 1,594,582 Tamarack 18 2,4,6,7 2.11 12,996 1,075,000 Maverick 14 2,4,6,7 5.54 26,940 1,908,400 Tamarack 7 2,4,6,7 4.32 18,000 1,364,585 Tamarack 7 (MIP) 2,5,6,7 636,351 Tamarack 19 2,4,6,7 2.11 18,528 1,311,116 Tamarack 8 - Apotheke 2,5,6,7 4.31 21,548 2,061,542 Tamarack 13 2,4,6,7 2.37 9,384 1,031,712 Tamarack 3 2,4,6,7 2.20 24,512 2,080,414 Tamarack 27 and 28 2,4,6,7 4.00 38,440 1,872,340 Maverick 5 - Jacksons Farms 2,5,6,7 5.20 15,000 1,358,634 Tamarack 4 and 5 2,4,6,7 4.41 26,076 2,239,870 Walsenburg, Colorado 2,4,6,7 35.00 74,800 4,219,170 Desert Hot Springs, California 2,5,6,7 0.85 35,505 7,685,000 Vinita, Oklahoma 4,6,7 9.35 40,000 2,593,313 Marengo Township, Michigan 2,4,6,7 61.14 556,146 24,171,151 Greenhouse - Food Crop O’Neill, Nebraska 2,4,5,7 90.97 1,130,575 9,350,000 Greenhouse Total 239.08 2,065,818 $ 66,553,180 Total Portfolio (Real Estate Owned) $ 84,886,728 Mortgage Loan 9 $ 597,000 Mortgage Loan 8 1,005,000 Impairment 36,207,472 Depreciation and Amortization 7,494,038 Net Book Value Net of Impairment, Depreciation and Amortization $ 42,787,218 1 Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet 2 Security for the Greenhouse Loan which is in default 3 Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs 4 Property is vacant 5 Tenant is not current on rent and is in default 6 An impairment has been taken against this asset 7 Asset held for sale 8 Loan secured by a first mortgage (Ordway Properties) sold on January 8, 2024 and is security for the Greenhouse Loan 9 Loan secured by a second mortgage (Maine property) sold on October 30, 2023 46 Railway Property Pittsburgh & West Virginia Railroad (“P&WV”), a wholly owned subsidiary, is a business trust organized under the laws of Pennsylvania which owns railroad assets that are currently leased to Norfolk Southern Railway (“NSC”) pursuant to a 99-year lease that became effective in 1964 and is subject to an unlimited number of 99-year renewal periods under the same terms and conditions, including annual rent payments, at the option of NSC (the “Railroad Lease”).
California On February 3, 2021, through a wholly owned indirect subsidiary, the Trust acquired an .85 acre property with a 37,000 square foot greenhouse located in Riverside County, CA (the “Canndescent Property”) and the Trust assumed an existing lease. During the fourth quarter of 2022, the tenant defaulted on the lease and vacated the property.
California On February 3, 2021, through a wholly owned indirect subsidiary, the Trust acquired an 0.85-acre property with a 37,000 square foot greenhouse located in Riverside County, CA (the “Canndescent Property”) and the Trust assumed an existing lease. During the fourth quarter of 2022, the tenant defaulted on the lease and vacated the property.
Rent during the renewal option periods is to be calculated as the greater of a minimum stated rental amount or a percentage of the total project-level gross revenue. The acquisition price, not including transaction and closing costs, was approximately $9.2 million. For the twelve months ended December 31, 2023, PWRS recorded rental income of $803,117.
Rent during the renewal option periods is to be calculated as the greater of a minimum stated rental amount or a percentage of the total project-level gross revenue. The acquisition price, not including transaction and closing costs, was approximately $9.2 million. For the twelve months ended December 31, 2024, PWRS recorded rental income of $803,117.
Pursuant to the lease agreement, PWSS’ tenant pays rent of $80,800 cash for the year December 1, 2012 to November 30, 2013, with a 1.0% escalation in each corresponding year thereafter.
Pursuant to the lease agreement, PWSS’ tenant paid rent of $80,800 cash for the year December 1, 2012 to November 30, 2013, with a 1.0% escalation in each corresponding year thereafter.
Rent was payable to Power REIT quarterly in advance and was recorded by Power REIT for accounting purposes on a straight-line basis with $89,494 having been recorded during the year ended December 31, 2023.
Rent was payable to Power REIT quarterly in advance and was recorded by Power REIT for accounting purposes on a straight-line basis with $89,494 having been recorded during the year ended December 31, 2023. The PWSS property was sold on January 30, 2024.
No income was recognized for this property in 2023. The Trust has taken an impairment against the PW Walsenburg assets. Unfortunately, the market for cannabis cultivation in Colorado deteriorated dramatically in 2022 and 2023 and all of the tenants have encountered an inability to pay contracted rent and are either paying a reduced amount or have vacated the premises.
The Trust has taken an impairment against the PW Walsenburg assets. 47 Unfortunately, the market for cannabis cultivation in Colorado deteriorated dramatically in 2023 and 2024 and all of the tenants have encountered an inability to pay contracted rent and are either paying a reduced amount or have vacated the premises.
Michigan On September 3, 2021, Power REIT, through a wholly owned indirect subsidiary, PW MI CanRE Marengo, LLC, (“PW Marengo”), completed the acquisition of a 556,146 square foot greenhouse cultivation facility on a 61.14-acre property in Marengo Township, Michigan (“Marengo Property”).
This asset is not pledged as security for the Greenhouse Loan. Michigan On September 3, 2021, Power REIT, through a wholly owned indirect subsidiary, PW MI CanRE Marengo, LLC, (“PW Marengo”), completed the acquisition of a 556,146 square foot greenhouse cultivation facility on a 61.14-acre property in Marengo Township, Michigan (“Marengo Property”).
The Trust has taken an impairment against the Ordway, CO assets. 45 On May 21, 2021, through a wholly owned indirect subsidiary, the Trust purchased a 35-acre property that includes greenhouses plus processing/auxiliary facilities (“Walsenburg Property”) approved for cannabis cultivation in Huerfano County, Colorado. PW Walsenburg’s total capital investment as of December 31, 2023 is approximately $4.2 million.
On May 21, 2021, through a wholly owned indirect subsidiary, the Trust purchased a 35-acre property that includes greenhouses plus processing/auxiliary facilities (“Walsenburg Property”) approved for cannabis cultivation in Huerfano County, Colorado. PW Walsenburg’s total capital investment as of December 31, 2024 is approximately $4.2 million.
As of December 31, 2023, our portfolio consisted of a total of approximately 112 miles of railroad infrastructure plus branch lines and related real estate, approximately 501 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 88 Megawatts (“MW”), and approximately 256 acres of land with approximately 2,162,000 square feet of existing or partially complete greenhouse/processing space.
As of December 31, 2024, our portfolio consisted of a total of approximately 112 miles of railroad infrastructure plus branch lines and related real estate, approximately 447 acres of fee simple land leased to a utility scale solar power generating project with an aggregate generating capacity of approximately 82 Megawatts (“MW”), and approximately 239 acres of land with approximately 2,066,000 square feet of existing or partially complete greenhouse/processing space.
On October 2, 2023 a lease with a replacement tenant was executed and the tenant is gearing up for operations. As of December 31, 2023, the Canndescent Property is considered held for sale as the Trust initiated an active program to locate a buyer through a third party. The Trust has taken an impairment against this asset.
On October 2, 2023 a lease with a replacement tenant was executed which is currently in default and an eviction process is underway. As of December 31, 2024, the Canndescent Property is considered held for sale as the Trust initiated an active program to locate a buyer through a third party. The Trust has taken an impairment against this asset.
The total size of the Ordway, Colorado portfolio is approximately 59 acres and approximately 300,000 square feet of greenhouse and related structures have been constructed for a total investment of approximately $24 million. Each property was acquired based on entering into a triple-net lease with a cultivation operator.
The total size of the Ordway, Colorado portfolio as of December 31, 2024 is approximately 42 acres and approximately 229,000 square feet of greenhouse and related structures have been constructed for a total investment of approximately $18.5 million. Each property was acquired based on entering into a triple-net lease with a cultivation operator.
In February of 2024, our subsidiary entered into a 20 year triple-net lease with an initial rent of $1 million per year after a 6 month deferred rent period along with a Letter of Intent to purchase the property for $9.2 million with a deadline of December 31, 2024.
In February of 2024, our subsidiary entered into a 20-year triple-net lease with an initial rent of $1 million per year after a 6month deferred rent period. Our subsidiary also entered into a Letter of Intent to purchase the property for $9.2 million. The Letter of Intent included a deadline of December 31, 2024, which the tenant did not meet.
A significant portion of the Ordway portfolio is vacant and the Trust is seeking to sell or re-tenant these properties.
A significant portion of the Ordway portfolio is vacant and the Trust is seeking to sell or re-tenant these properties. The Trust has taken an impairment against the Ordway, CO assets.
The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 45% and 39% of consolidated revenue respectively. For the fiscal year ended 2022, Power REIT collected approximately 57% of its consolidated revenue from four properties.
For the fiscal year ended 2024, Power REIT collected approximately 88% of its consolidated revenue from the tenants of three properties. The tenants are Norfolk Southern Railway, Regulus Solar LLC and Marengo Cannabis LLC which represent 32%, 28% and 28% of consolidated revenue respectively.
There can be no assurance as to how long this process will take. CEA Greenhouse Properties – Food Related Nebraska On March 31, 2022, Power REIT, through a wholly owned subsidiary, completed its first acquisition with the focus on the cultivation of food crops.
CEA Greenhouse Properties – Food Related Nebraska On March 31, 2022, Power REIT, through a wholly owned subsidiary, completed its first acquisition with the focus on the cultivation of food crops.
As of December 31, 2023, the Trust considered Desert Hot Spring (CA), Walsenburg (CO) , Vinita (OK), Maverick 14 (Ordway, CO), Tamarack 4 and 5 (Ordway, CO), Sherman 6 (Ordway, CO), Tamarack 14 (Ordway, CO), Tamarack 13 (Ordway, CO), Maverick 1 (Ordway, CO) and Salisbury (MA) as Assets Held for Sale.
As of December 31, 2024, the Trust considered Maverick 1 (Ordway, CO), Tamarack 18 (Ordway, CO), Maverick 14 (Ordway, CO), Tamarack 7 (Ordway, CO), Tamarack 19 (Ordway, CO), Tamarack 8 (Ordway, CO), Tamarack 13 (Ordway, CO), Tamarack 3 (Ordway, CO), Tamarack 27 and 28 (Ordway, CO), Maverick 5 (Ordway, CO), Tamarack 4 and 5 (Ordway, CO), Walsenburg (CO), Desert Hot Spring (CA), Vinita (OK), Marengo Township (MI) and O’Neill (NE) as Assets Held for Sale.
Concurrent with the acquisition, PW Marengo entered into a 20-year “triple-net” lease (the “Marengo Lease”) with Marengo Cannabis, LLC (“MC”) for the operation of a cannabis cultivation facility. As previously announced, cannabis licensing at the Marengo Township greenhouse cultivation facility was delayed based on a dispute with Marengo Township Building Official (“BO”).
Concurrent with the acquisition, PW Marengo entered into a 20-year “triple-net” lease (the “Marengo Lease”) with Marengo Cannabis, LLC (“MC”) for the operation of a cannabis cultivation facility. The tenant defaulted on the lease and the property is vacant.
Concurrent with the acquisition, PW Vinita entered into a 20-year “triple-net” lease with VinCann LLC (“VC LLC”) to operate a cannabis cultivation facility.
Concurrent with the acquisition, PW Vinita entered into a 20-year “triple-net” lease with VinCann LLC (“VC LLC”) to operate a cannabis cultivation facility but the tenant has defaulted and the property is vacant. No income was recognized for this property in 2024 and 2023. The Trust has taken an impairment against this asset.
There can be no assurance that the tenant will perform on either the Lease or Purchase. Revenue Concentration The Trust’s revenue is highly concentrated. For the fiscal year ended 2023, Power REIT collected approximately 84% of its consolidated revenue from two properties.
There can be no assurance that the tenant will perform on either the lease or purchase and the tenant has not paid rent or expenses and is currently in default on the Lease. 48 Revenue Concentration The Trust’s revenue is highly concentrated.
Unfortunately, the market for tomatoes compressed and the tenant was unable to meet its financial obligations and has vacated the property. We have been actively exploring alternatives to secure a new tenant to put the facility back into operation and the potential to sell the MillPro Facility.
During the third quarter of 2022, the tenant defaulted on the lease and the property subsequently became vacant. The Nebraska property is security for the Greenhouse Loan which is in default. We have been actively exploring alternatives to secure a new tenant to put the facility back into operation and the potential to sell the MillPro Facility.
During 2022, the Trust recognized revenue of $250,000 related to a security deposit from the tenant and the Walsenburg Property is considered an asset held for sale as the Trust has initiated an active program to locate a buyer through a third party and the assets are not in operations, therefore, not generating any rental income and we are evaluating collectability related to the guaranties.
Concurrent with the acquisition, PW Walsenburg entered into a 20-year “triple-net” lease (the “Walsenburg Lease”) with Walsenburg Cannabis LLC. The Walsenburg Property is considered an asset held for sale as the Trust has initiated an active program to locate a buyer through a third party. No income was recognized for this property in 2024 and 2023.
Removed
The PWSS property was sold on January 30, 2024 (see Note 13 Subsequent Events in the notes to the financial statements contained elsewhere in this Annual Report).
Added
The Colorado greenhouse properties are security for the Greenhouse Loan which is in default and therefore are shown on our balance sheet for the years ended December 31, 2023 and 2024 as assets held for sale.
Removed
Concurrent with the acquisition, PW Walsenburg entered into a 20-year “triple-net” lease (the “Walsenburg Lease”) with Walsenburg Cannabis LLC.
Added
The Canndescent Property is security for the Greenhouse Loan which is in default and therefore are shown on our balance sheet for the years ended December 31, 2023 and 2024 as assets held for sale.
Removed
During the second quarter of 2022, the tenant defaulted on the lease and revenue recognition is currently being handled on a cash-basis but no revenue is expected as the tenant has ceased operations and we are evaluating collectability related to the guaranties. The Trust has taken an impairment against this asset.
Added
The Marengo Property is security for the Greenhouse Loan which is in default and therefore is shown on our balance sheet for the years ended December 31, 2023 and 2024 as an asset held for sale.
Removed
The BO has taken the position that changing the plant grown in the greenhouse to cannabis would require building permits and a Certificate of Occupancy for the existing structure which previously did not require any.
Added
For the fiscal year ended 2023, Power REIT collected approximately 84% of its consolidated revenue from the tenants of two properties. The tenants were Norfolk Southern Railway and Regulus Solar LLC which represented 45% and 39% of consolidated revenue respectively. These concentration percentages include income from the recognition of security deposits related to defaulted leases.
Removed
On November 21, 2022, representatives of Power REIT met with the Marengo Township Construction Board of Appeals which has agreed to allow the project to proceed as follows: ● The existing greenhouse portion of the facility was granted the following variances: ◌ A variance from the Energy Code requirements ◌ A variance from fire suppression consistent with the conclusion of the Michigan Bureau of Fire Services ◌ A variance related to egress requirements consistent with the conclusion of the Michigan Bureau of Fire Services ● Building permits may be required for modifications to the structure but not for the pre-existing structure itself 46 We continue to work on a strategy related to seeking the required permits for some work that has been completed or is in process after which we could receive a Certificate of Occupancy for cannabis cultivation purposes but the process the process with Marengo Township remains quite challenging.
Removed
There can be no assurance that Marengo Township will ultimately approve proceeding with cannabis cultivation at this property or do so on terms that are economically feasible given the current state of the market. Unfortunately, the market for cannabis has compressed dramatically in Michigan over the course of 2022 and 2023.
Removed
This greenhouse property would be the largest cultivation facility in Michigan if put into operation for cannabis and would have the potential to produce a significant percentage of the overall Michigan cannabis market opportunity.
Removed
The Trust is currently evaluating alternatives for this asset included but not limited to: (i) restructuring the lease with the original Tenant, (ii) finding a replacement tenant interested in the cultivation of cannabis at the property, or (iii) finding a replacement tenant interested in the cultivation of produce at the property, or (iv) the sale of the property.
Removed
During the third quarter of 2022, the tenant defaulted on the lease by not paying rent that was due and revenue recognition is currently being handled on a cash-basis but no rental income is expected as the tenant has ceased operations at the property.
Removed
The tenants are NorthEast Kind Assets, LLC (“Sweet Dirt”), Fiore Management LLC (“Canndescent”), Norfolk Southern Railway and JAB Industries, Ltd (“JAB”), which represent 22%, 10%, 11% and 14% of consolidated revenue respectively.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. We are, from time to time, the subject of claims and suits arising out of matters related to our business. In general, litigation claims can be expensive, and time consuming to bring or defend against and could result in settlements or damages that could significantly affect financial results.
Biggest changeIn general, litigation claims can be expensive, and time consuming to bring or defend against and could result in settlements or damages that could significantly affect financial results.
The litigation relates to purported work by Anchor at the property owned by PW MI CanRE Marengo LLC in Michigan.
The litigation relates to purported work by Anchor at the greenhouse property owned by PW MI CanRE Marengo LLC in Michigan.
On November 17, 2023, Anchor Hydro (“Anchor”) initiated a complaint, as amended, in the Michigan Circuit Court for the County of Calhoun (Case No. 2023-3145-CB) against Power REIT, PW MI CanRE Marengo LLC for Breach of Contract, Unjust Enrichment and Account Stated.
Item 3. Legal Proceedings. On November 17, 2023, Anchor Hydro (“Anchor”) initiated a complaint, as amended, in the Michigan Circuit Court for the County of Calhoun (Case No. 2023-3145-CB) against Power REIT, PW MI CanRE Marengo LLC (collectively the “PW Defendants”) for Breach of Contract, Unjust Enrichment and Account Stated in the amount of approximately $600,000.
It is not possible to predict the final resolution of the current litigation to which we are party to, and the impact of certain of these matters on our business, results of operations, and financial condition could be material.
It is not possible to predict the final resolution of the current litigation to which we are party to, and the impact of certain of these matters on our business, results of operations, and financial condition could be material. Regardless of the outcome, litigation has adversely impacted our business because of defense costs, diversion of management resources and other factors.
The complaint is seeking (i) Judicial Foreclosure (ii) Specific Performance (iii) Appointment of Receiver; (iv) Injunctive Relief; (v) Breach of Contract (Security Agreement); (vi) Breach of Contract (Guaranty); (vii) Money Due; and (viii) Account Stated. Item 4. Mine Safety Disclosures. Not Applicable. PART II
The complaint is seeking (i) Judicial Foreclosure (ii) Specific Performance (iii) Appointment of Receiver; (iv) Injunctive Relief; (v) Breach of Contract (Security Agreement); (vi) Breach of Contract (Guaranty); (vii) Money Due; and (viii) Account Stated. A forbearance agreement with the lender for the Greenhouse Loan was effective on May 10, 2024, which provides additional time to retire the loan.
Removed
Regardless of the outcome, litigation has adversely impacted our business because of defense costs, diversion of management resources and other factors. 47 On January 15, 2022, Power REIT’s subsidiary, PW CanRe Cloud Nine LLC (“PW Cloud Nine”), filed for the eviction of its tenant Cloud Nine for failure to pay rent when due in District Court, Crowly County, Colorado and a judgement against Cloud Nine and the lease guarantor for unpaid rent.
Added
On July 9, 2024, Anchor and the PW Defendants entered into a settlement agreement (the “Anchor Settlement”) whereby Anchor will complete certain work at the greenhouse property in Michigan and the PW Defendants will pay Anchor $265,000 ($150,000 up front and $11,500 per month for ten months commencing on September 1, 2024) as well as the return of certain uninstalled equipment provided by Anchor.
Removed
On February 11, 2022 the court granted a Writ of Restitution for the eviction of Cloud Nine LLC which was appealed but Cloud Nine ultimately agreed to turn over possession of the property.
Added
In connection with the Anchor Settlement, the Trust recognized $351,000 as income related to forgiveness of accounts payable during the year ended December 31, 2024.
Removed
On February 14, 2022, the defendants in the case filed counterclaims against PW Cloud Nine, Power REIT and David Lesser for: (i) fraudulent misrepresentation, (ii) negligent misrepresentation and/or concealment, (iii) breach of contract, (iv) breach of the duty of good faith and fair dealing, (v) alter ego/piercing the corporate veil, and (vi) unjust enrichment.
Added
The expiration date of the original forbearance agreement was September 30, 2024. On September 30, 2024, we entered into an amendment to the forbearance agreement which moves the expiration of the forbearance agreement to January 31, 2025.
Removed
The case was pending in Crowley County Colorado District Court (Case Number: 2022CV8). On February 13, 2024, the court issued a ruling dismissing all of the counterclaims and granting a default judgement against Cloud Nine and the guarantor of the lease.
Added
As of the date of this filing, the forbearance agreement has terminated and the greenhouse portfolio is subject to foreclosure but we continue to explore options for a resolution with the bank (see Subsequent Events).
Removed
On April 8, 2022, JKL2 Inc., Chelsey Joseph, Alan Kane and Jill Lamoureux (collectively the “JKL Parties”) filed a complaint in District Court, Crowley County Colorado (Case Number: 2022CV30009) against PW CO CanRe JKL LLC (“PW JKL”), Power REIT and David H. Lesser (the “Power REIT parties”) and Crowley County Builders, LLC and Dean Hiatt (the “CC Parties”).
Added
On September 11, 2024, our wholly owned subsidiary, PW CO CanRE Cloud Nine LLC received a Final Order and Entry of Judgement in favor of PW CO CanRE Cloud Nine LLC against the former tenant and guarantor of the lease in the amount of approximately $10.9 million.
Removed
The JKL Parties are owners of JKL 2 Inc. and have provided personal guaranties of the lease between PW JKL, a wholly owned subsidiary of Power REIT, and JKL 2, Inc.
Added
The ruling eliminated claims by the former tenant against PW CO CanRE Cloud Nine LLC. The Trust is evaluating the potential to collect against the defendants in this litigation for this Judgement, but will treat any recovery on a cash basis for accounting purposes.
Removed
The complaint is seeking a judgement against the Power REIT Parties for (i) fraudulent inducement and (ii) breach of duty of good faith and fair dealing and (iii) civil conspiracy and (iv) unjust enrichment.
Added
On February 6, 2025, our wholly owned subsidiary, PW CO CanRE JKL LLC received a Final Order and Entry of Judgement in favor of PW CO CanRE JKL LLC against the former tenant and guarantors of the lease in the amount of $10,988,749. The ruling eliminated claims by the former tenant against PW CO CanRE JKL LLC.
Removed
On May 2, 2022, PW CO CanRe JKL LLC commenced an eviction process against JKL2 Inc. for failure to pay rent when due and has filed counter-claims seeking damages for unpaid rent including against the guarantors of the lease.
Added
The Trust is evaluating the potential to collect against this litigation for this Judgement, but will treat any recovery on a cash basis for accounting purposes. (See Subsequent Events). We are, from time to time, the subject of claims and suits arising out of matters related to our business.
Removed
The Trust does not believe it has material exposure to the claims brought by the JKL Parties beyond the costs associated with the litigation. A trial was held in May of 2023 and we are awaiting a ruling from the court.
Added
Item 4. Mine Safety Disclosures. Not Applicable. 49 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Plan’s purpose is to secure and retain the services of Employees, Directors and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Trust and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the common shares through the granting of awards. 49 The following table provides information regarding our equity compensation plans as of December 31, 2023: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under Plan (excluding securities in first column) (1) Equity compensation plans approved by security holders 197,500 13.44 1,501,295 Equity compensation plans not approved by security holders n/a n/a n/a Total 197,500 13.44 1,501,295 (1) The number of shares of our common stock reserved for issuance under the Plan will automatically increase on January 1 of each year, beginning on January 1, 2020 and ending on and including January 1, 2029, by 12.5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Board of Trustees.
Biggest changeThe following table provides information regarding our equity compensation plans as of December 31, 2024: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under Plan (excluding securities in first column) (1) Equity compensation plans approved by security holders 192,778 13.44 1,925,002 Equity compensation plans not approved by security holders n/a n/a n/a Total 192,778 13.44 1,925,002 (1) The number of shares of our common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2020 and ending on and including January 1, 2029, by 12.5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Board of Trustees. 51 Performance Graph We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Securities Authorized for Issuance Under Equity Compensation Plans Power REIT’s 2020 Equity Incentive Plan (the “Plan”), which superseded the 2012 Equity Incentive Plan, was adopted by the Board on May 27, 2020 and approved by shareholders on June 24, 2020.
Securities Authorized for Issuance Under Equity Compensation Plans Power REIT’s 2020 Equity Incentive Plan (the “2020 Plan”), which superseded the 2012 Equity Incentive Plan, was adopted by the Board on May 27, 2020 and approved by shareholders on June 24, 2020.
As of December 31, 2022, our last tax return completed to date, we have a net operating loss of $24.5 million which reduces our taxable net income, thereby reducing the amount we are required to distribute to our shareholders as dividends, until such Net Operating Losses are exhausted.
As of December 31, 2023, our last tax return completed to date, we have a net operating loss of $30.8 million which reduces our taxable net income, thereby reducing the amount we are required to distribute to our shareholders as dividends, until such Net Operating Losses are exhausted.
As of December 31, 2023, the Company has not repurchased any shares of stock under the stock repurchase program. Sales of Unregistered Equity Securities There were no unregistered sales of equity securities by us during the year ended December 31, 2023 or 2022.
As of December 31, 2024, the Trust has not repurchased any shares of stock under the stock repurchase program. Sales of Unregistered Equity Securities There were no unregistered sales of equity securities by us during the year ended December 31, 2024.
Issuer Purchases of Equity Securities On January 19, 2017, the board of trustees approved a stock repurchase program of up to $750,000 and which is approved for both common shares and preferred shares of the Trust.
Dividends on our Series A Preferred Stock are cumulative and must be paid in full and on a current basis in order for the Trust to pay dividends on its common shares. 50 Issuer Purchases of Equity Securities On January 19, 2017, the board of trustees approved a stock repurchase program of up to $750,000 and which is approved for both common shares and preferred shares of the Trust.
Registrar, Transfer Agent and Disbursing Agent The transfer agent and registrar for our common shares is Broadridge Corporate Issuer Solutions, Inc. 48 The registrar, transfer agent and disbursing agent for dividends and other distributions in respect of our Series A Preferred Stock is Broadridge Corporate Issuer Solutions, Inc.
The registrar, transfer agent and disbursing agent for dividends and other distributions in respect of our Series A Preferred Stock is Broadridge Corporate Issuer Solutions, Inc. Stock Issued for Cash During the twelve months ended December 31, 2024 or 2023, we did not issue any securities.
As of March 27, 2024, there were approximately 375 registered holders of registrant’s common shares.
As of March 27, 2025, there were approximately 375 registered holders of registrant’s common shares. Registrar, Transfer Agent and Disbursing Agent The transfer agent and registrar for our common shares is Broadridge Corporate Issuer Solutions, Inc.
Removed
Stock Issued for Cash During the twelve months ended December 31, 2023 or 2022, we did not issue any securities.
Added
The 2020 Plan’s purpose is to secure and retain the services of Employees, Directors and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Trust and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the common Stock through the granting of awards.
Removed
Dividends on our Series A Preferred Stock are cumulative and must be paid in full and on a current basis in order for the Trust to pay dividends on its common shares.
Added
As of December 31, 2024, the aggregate number of shares of Common Stock that may be issued pursuant to outstanding awards is currently 1,925,002 which is subject to adjustment per the 2020 Plan.
Removed
Performance Graph We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+47 added−25 removed40 unchanged
Biggest changeThe current loan liabilities include approximately $14.4 million of a bank loan secured by the majority of the greenhouse portfolio (the “Greenhouse Loan”) and which is non-recourse to the Trust as well as approximately $456,000 of debt secured by a property (Salisbury, MA) that was sold in early 2024 and the loan was paid off. 52 Of the total amount of cash, approximately $2.2 million is non-restricted cash available for general corporate purposes and $1.9 million is restricted cash related to the Greenhouse Loan.
Biggest changeOf the total amount of cash as of December 31, 2024, approximately $2.2 million is non-restricted cash available for general corporate purposes and $37,000 is restricted cash related to the Greenhouse Loan. Our current loan liabilities totaled approximately $17.4 million as of December 31, 2024.
The lender has declared a default which allows for the acceleration of the Greenhouse Loan which is being treated as a current debt obligation.
The lender has declared a default of the loan which allows for the acceleration of the Greenhouse Loan which is being treated as a current debt obligation.
To achieve this primary goal, we have developed a business strategy focused on increasing the values of our properties, and ultimately of the Trust, which includes: ● Raising capital by monetizing the embedded value in our portfolio to improve our liquidity position and, as appropriate reducing debt levels to strengthen our balance sheet; ● Selling off non-core properties and underperforming assets; ● Seeking to re-lease properties that are vacant or have non-performing tenants ● Raising the overall level of quality of our portfolio and of individual properties in our portfolio; 50 ● Improving the operating results of our properties; and ●Taking steps to position the Company for future growth opportunities.
To achieve this primary goal, we have developed a business strategy focused on increasing the values of our properties, and ultimately of the Trust, which includes: ● Raising capital by monetizing the embedded value in our portfolio to improve our liquidity position and, as appropriate reducing debt levels to strengthen our balance sheet; ● Selling off non-core properties and underperforming assets; ● Seeking to re-lease properties that are vacant or have non-performing tenants ● Raising the overall level of quality of our portfolio and of individual properties in our portfolio; ● Improving the operating results of our properties; and ●Taking steps to position the Trust for future growth opportunities.
On March 13, 2023 the Greenhouse Loan entered into an additional modification of which the terms are summarized as follows: - The total commitment is reduced from $20 million to $16 million. - The interest rate is changed to the greater of: (i) 1% above the Prime rate and (ii) 8.75%. - Monthly payments on the Greenhouse Loan will be interest only until maturity. - A portion of the proceeds from the sale of assets within the Borrowing Base for the Greenhouse Loan will be required to pay the outstanding loan amount. - The maturity date of the Greenhouse Loan is changed to December 21, 2025. - The Debt Service Coverage ratio will be 1.50 to 1.00 and the test will be performed on an annual basis and is eliminated until the calendar year 2024. - The definition of assets included in the Borrowing Base for the Greenhouse Loan no longer eliminates assets where tenants are in default for failure to make timely rent payments. - An agreed upon minimum liquidity amount shall be maintained in the amount of $1 million. - A $160,000 fee will be charged by the bank for the modification.
On March 13, 2023 an additional modification of the terms of the Greenhouse Loan was implemented which is summarized as follows: - The total commitment was reduced from $20 million to $16 million. - The interest rate was changed to the greater of: (i) 1% above the Prime rate and (ii) 8.75%. - Monthly payments on the Greenhouse Loan will be interest only until maturity. - A portion of the proceeds from the sale of assets within the Borrowing Base for the Greenhouse Loan will be required to pay the outstanding loan amount. - The maturity date of the Greenhouse Loan was changed to December 21, 2025. - The Debt Service Coverage ratio will be 1.50 to 1.00 and the test will be performed on an annual basis and is eliminated until the calendar year 2024. - The definition of assets included in the Borrowing Base for the Greenhouse Loan no longer eliminates assets where tenants are in default for failure to make timely rent payments. - An agreed upon minimum liquidity amount shall be maintained in the amount of $1 million. - A $160,000 fee will be charged by the bank for the modification.
Quantitative and Qualitative Disclosures about Market Risk. Not applicable. 58 Item 8. Financial Statements and Supplementary Data. This information appears following Item 15 of this document and is incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None
Quantitative and Qualitative Disclosures about Market Risk. Not applicable. Item 8. Financial Statements and Supplementary Data. This information appears following Item 15 of this document and is incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None 61
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis is based on, and should be read in conjunction with, the Consolidated and Combined Consolidated Financial Statements and the related notes thereto of the Trust as of and for the years ended December 31, 2023 and December 31, 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis is based on, and should be read in conjunction with, the Consolidated and Combined Consolidated Financial Statements and the related notes thereto of the Trust as of and for the years ended December 31, 2024 and December 31, 2023.
The debt service, related to the PWV and the PWRS loans is anticipated to be approximately $700,000 over the next twelve months and the Greenhouse Loan is currently in default and the subject of litigation so the balance is currently due along with a default rate of interest.
The debt service, related to the PWV and the PWRS loans is anticipated to be approximately $750,000 over the next twelve months and the Greenhouse Loan is currently in default and the subject of litigation so the balance is currently due along with a default rate of interest.
We also have several properties that we are marketing for sale and/or lease which have been classified as “Assets Held for Sale.” Improving Our Portfolio We are currently seeking to refine our property holdings by selling properties and/or re-leasing them in an effort to improve the overall performance going forward.
We also have several properties that we are marketing for sale and/or lease which have been classified as “Assets Held for Sale.” Improving Our Portfolio We are currently seeking to refine our property holdings by selling greenhouse properties and/or re-leasing them in an effort to retire indebtedness and improve the overall performance going forward.
Core FFO is a non-GAAP financial measure and should not be substituted for net income. 57 Core FFO: Management believes that Core FFO is a useful supplemental measure of the Trust’s operating performance.
Core FFO is a non-GAAP financial measure and should not be substituted for net income. 60 Management believes that Core FFO is a useful supplemental measure of the Trust’s operating performance.
If the Trust’s plan to focus on selling properties, entering into new leases, improving cash collections from existing tenants and raising capital in the form of debt or equity is effectively implemented, the Trust’s plan could potentially provide enough liquidity. However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity.
If the Trust’s plan to focus on selling greenhouse properties, entering into new leases, improving cash collections from existing tenants and raising capital in the form of debt or equity is effectively implemented, the Trust’s plan could potentially provide liquidity to support our operations. However, the Trust cannot predict, with certainty, the outcome of its actions to generate liquidity.
Impairment of long-lived assets is required to be recorded as a non-cash operating expense. During the fourth quarter of 2022 and the third quarter of 2023, the Trust concluded that an impairment of value of certain assets within its CEA portfolio was appropriate based on market conditions.
Impairment of long-lived assets is required to be recorded as a non-cash operating expense. During the fourth quarter of 2022, the third quarter of 2023 and in all four quarters of 2024, the Trust concluded that an impairment of value of certain assets within its CEA portfolio was appropriate based on market conditions.
On January 30, 2024, the PWSS property was sold and the loan was paid off (see Note 13 Subsequent Events). On November 6, 2015, PWRS entered into a loan agreement (the “2015 PWRS Loan Agreement”) with a lender for $10,150,000 (the “2015 PWRS Loan”). The 2015 PWRS Loan is secured by land and intangibles owned by PWRS.
On January 30, 2024 the PWSS property was sold and the loan was paid off. On November 6, 2015, PWRS entered into a loan agreement (the “2015 PWRS Loan Agreement”) with a lender for $10,150,000 (the “2015 PWRS Loan”). The 2015 PWRS Loan is secured by land and intangibles owned by PWRS.
These policies are as follows: Asset Impairment Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a “triggering event.” A property to be held and used is considered impaired only if management’s estimate of the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges, are less than the carrying value of the property.
We believe that our Impairment of Lont-Lived Assets policy Asset Impairment policies meets these criteria. 59 Impairment of Long-Lived Assets Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable, which is referred to as a “triggering event.” A property to be held and used is considered impaired only if management’s estimate of the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges, are less than the carrying value of the property.
Based on our leases in place as of December 31, 2023, we anticipate generating approximately $1,700,000 in cash rent from PWRS and PWV. In addition, the Trust sold two properties in the first quarter of 2024 for approximately $2,450,000 and is seeking additional property sales that may occur over the next twelve months.
Based on our leases in place as of December 31, 2024, we anticipate generating approximately $1,700,000 in cash rent from PWRS and PWV. In addition, the Trust sold four properties in 2024 for approximately $2.6 million and is seeking additional property sales that may occur over the next twelve months.
For the year ended December 31, 2023, the Trust determined that there was substantial doubt as to its ability to continue as a going concern as a result of current liabilities that far exceed current assets, net losses incurred, expected reduced revenue and increased property expenses related to the greenhouse portfolio.
For the twelve months ended December 31, 2024, the Trust determined that there was substantial doubt as to its ability to continue as a going concern as a result of current liabilities that far exceed current assets, net losses incurred, and increased property expenses related to the greenhouse portfolio.
As of December 31, 2023, the Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary Pittsburgh & West Virginia Railroad (“P&WV”), approximately 501 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 88 Megawatts (“MW”) and approximately 256 acres of land with approximately 2,163,000 square feet of existing or under construction CEA properties in the form of greenhouses.
As of December 31, 2024, the Trust’s assets consisted of approximately 112 miles of railroad infrastructure and related real estate which is owned by its subsidiary Pittsburgh & West Virginia Railroad (“P&WV”), approximately 447 acres of fee simple land leased to a utility scale solar power generating projects with an aggregate generating capacity of approximately 82 Megawatts (“MW”) and approximately 249 acres of land with approximately 2,112,000 square feet of existing or partially completed CEA properties in the form of greenhouses.
Debt issuance expenses of approximately $0 and $44,000 have been capitalized during the twelve months ended December 31, 2023 and 2022, respectively.
Debt issuance expenses of $0 have been capitalized during the twelve months ended December 31, 2024 and 2023, respectively.
In July 2013, PWSS borrowed $750,000 from a regional bank (the “PWSS Term Loan”). The PWSS Term Loan carries a fixed interest rate of 5.0% for a term of 10 years and amortizes based on a 20-year principal amortization schedule.
On January 30, 2024, the PWSS property was sold and the loan was paid off. In July 2013, PWSS borrowed $750,000 from a regional bank (the “PWSS Term Loan”). The PWSS Term Loan had a fixed interest rate of 5.0% for a term of 10 years and amortizes based on a 20-year principal amortization schedule.
Capital Recycling In the later part of 2022, we commenced property reviews to establish a plan for the portfolio and, where appropriate, have been disposing of and seeking to dispose of properties that we do not believe meet financial and strategic criteria given economic, market and other circumstances.
These means might include leasing vacant properties, selling properties, raising capital or through other actions. 53 Capital Recycling In the later part of 2022, we commenced property reviews to establish a plan for the portfolio and, where appropriate, have been disposing of and seeking to dispose of properties that we do not believe meet financial and strategic criteria given economic, market and other circumstances.
The balance of the loan as of December 31, 2023 was approximately $14,412,000 (net of approximately $276,000 of capitalized debt costs). On December 21, 2021, a wholly-owned subsidiary of Power REIT (“PW CanRE Holdings”) entered into the Greenhouse Loan with initial availability of $20 million.
The balance of the loan as of December 31, 2024 was approximately $14,198,000 (net of approximately $267,000 of capitalized debt costs). 57 On December 21, 2021, a wholly-owned subsidiary of Power REIT (“PW CanRE Holdings”) entered into a debt facility with initial availability of $20 million (the “Greenhouse Loan”).
Improving Our Balance Sheet by Reducing Debt and Leverage; Maintaining Liquidity Leverage We continue to seek ways to reduce our debt and debt leverage by improving our operating performance and through a variety of other means available to us. These means might include leasing vacant properties, selling properties, raising capital or through other actions.
Improving Our Balance Sheet by Reducing Debt and Leverage; Maintaining Liquidity Leverage We continue to seek ways to reduce our debt and debt leverage by improving our operating performance and through a variety of other means available to us.
However, the Greenhouse Loan is non-recourse to Power REIT which means that in the event it cannot resolve issues with the lender and they foreclose on the properties, Power REIT should be able to continue as a going concern albeit with a smaller portfolio of assets.
The Greenhouse Loan is non-recourse to Power REIT which means that in the event it cannot resolve issues with the lender and they foreclose on the properties, Power REIT should be able to continue as a going concern albeit with a smaller portfolio of assets given that non-restricted cash should provide greater than twelve months of liquidity for capital needs unrelated to the greenhouse properties which are security for the Greenhouse Loan.
The PWSS Term Loan matured on August 1, 2023 and the bank agreed to provide a 6-month extension of the maturity. The loan is secured by PWSS’ real estate assets and a parent guarantee from the Trust. The balance of the PWSS Term Loan as of December 31, 2023 was approximately $456,000 (net of approximately $0 of capitalized debt costs).
The loan was secured by PWSS’ real estate assets and a parent guarantee from the Trust. The balance of the PWSS Term Loan as of December 31, 2024 and December 31, 2023 is approximately $0 and $456,000 (net of approximately $0 of capitalized debt costs), respectively.
Amortization of approximately $264,600 and $44,000 has been recognized for the years ended December 31, 2023 and 2022, respectively and approximately $46,000 deferred debt issuance costs were re-classed as contra liability upon the loan commitment reduction for the year ended December 31, 2023; approximately $255,165 deferred debt issuance costs were re-classed as contra liability upon the loan draw for the year ended December 31, 2022.
Amortization of approximately $0 and $265,000 has been recognized for the twelve months ended December 31, 2024 and 2023, respectively and $0 and approximately $46,000 deferred debt issuance costs were re-classed as contra liability upon the loan commitment reduction for the twelve months ended December 31, 2024 and 2023.
PWRS issued a note to the benefit of the lender dated November 6, 2015 with a maturity date of October 14, 2034 and a 4.34% interest rate. The 2015 PWRS Loan is non-recourse to Power REIT. The balance of the PWRS Bonds as of December 31, 2023 was approximately $6,957,000 (net of approximately $235,000 of capitalized debt costs).
PWRS issued a note to the benefit of the lender dated November 6, 2015 with a maturity date of October 14, 2034 and a 4.34% interest rate. The 2015 PWRS Loan is non-recourse to Power REIT.
Disposing of these properties can enable us to redeploy or recycle our capital to other uses, such as to repay debt, to reinvest in other real estate assets and development and redevelopment projects, and for other corporate purposes. Along these lines, in 2023 we completed sales of assets for total gross proceeds of approximately $7.3 million.
Disposing of these properties can enable us to redeploy or recycle our capital to other uses, such as to repay debt, to reinvest in other real estate assets and development and redevelopment projects, and for other corporate purposes assuming the proceeds are in excess of liabilities.
Our expenses, other than dividend payments on our Series A Preferred Stock, are for general and administrative expenses, which consist principally of insurance, legal and other professional fees, consultant fees, NYSE American listing fees, shareholder service company fees and auditing costs as well as property related expenses that are not covered by tenants.
Our non-property related expenses, are for general and administrative expenses, which consist principally of insurance, legal and other professional fees, consultant fees, NYSE American listing fees, shareholder service company fees and auditing costs as well as property related expenses that are not covered by tenants. During 2024, the Trust’s revenue has been concentrated from certain tenants.
Results of Operations Results of Operations for the Year ended December 31, 2023 as compared to the year ended December 31, 2022 Revenue during the years ending December 31, 2023 and 2022 was $2,357,695 and $8,517,720, respectively.
Results of Operations Results of Operations for the Year ended December 31, 2024 as compared to the year ended December 31, 2023 Revenue during the years ending December 31, 2024 and 2023 was $3,049,875 and $2,222,483, respectively.
Typically, estimates may require adjustments from time to time based on, among other things, changing circumstances and new or better information. 56 The accounting policies that we consider to be our “critical accounting policies” are those that we believe are either the most judgmental or involve the selection or application of alternative accounting policies, and that in each case are material to our consolidated financial statements.
The accounting policies that we consider to be our “critical accounting policies” are those that we believe are either the most judgmental or involve the selection or application of alternative accounting policies, and that in each case are material to our consolidated financial statements.
These impairments also take into account assets held for sale and the write off of the lease of any associated lease intangible. In 2023, we recorded approximately $8.2 million in non-cash impairment charges. In 2022, we recorded approximately $16.7 million in non-cash impairment charges.
These impairments also take into account assets held for sale which are accounted for at the lower of carrying amount and fair value less cost to sell, and the write off of the lease of any associated lease intangible. In 2024, we recorded approximately $20 million and in 2023, we recorded approximately $8.2 million in non-cash impairment charges.
The Municipal Debt has a simple interest rate of 5.0% that is paid annually, due on February 1 of each year. The balance of the Municipal Debt as of December 31, 2023 was approximately $51,000. On January 30, 2024, the PWSS property was sold and the Municipal Debt was paid off (see Note 13 Subsequent Events).
The Municipal Debt had approximately 9 years remaining. The Municipal Debt had a simple interest rate of 5.0% that is paid annually, due on February 1 of each year. The balance of the Municipal Debt as of December 31, 2024 and December 31, 2023 is approximately $0 and $51,000, respectively.
CORE FUNDS FROM OPERATIONS (FFO) Years ended December 31, 2023 2022 Revenue $ 2,357,695 $ 8,517,720 Net Loss $ (14,365,513 ) $ (14,253,483 ) Stock-Based Compensation 885,314 682,259 Interest Expense - Amortization of Debt Costs 290,554 87,430 Amortization of Intangible Lease Asset 227,488 371,804 Amortization of Intangible Lease Liability - (29,776 ) Depreciation on Land Improvements 2,260,655 1,505,470 Impairment Expense 8,235,136 16,739,040 Gain on sale of property (1,053,923 ) - Core FFO Available to Preferred and Common Stock (3,520,289 ) 5,102,744 Preferred Stock Dividends (652,829 ) (652,827 ) Core FFO Available to Common Shares $ (4,173,118 ) $ 4,449,917 Weighted Average Shares Outstanding (basic) 3,389,661 3,377,676 Core FFO per Common Share (1.23 ) 1.32 Item 7A.
CORE FUNDS FROM OPERATIONS (FFO) Years ended December 31, 2024 2023 Revenue $ 3,049,875 $ 2,222,483 Net Loss $ (24,710,741 ) $ (14,365,513 ) Stock-Based Compensation 693,575 885,314 Interest Expense - Amortization of Debt Costs 31,391 290,554 Amortization of Intangible Lease Asset 227,488 227,488 Depreciation on Land Improvements 819,893 2,260,655 Impairment Expense 19,954,260 8,235,136 Gain on sale of property (247,136 ) (1,053,923 ) Core FFO Available to Preferred and Common Stock (3,231,270 ) (3,520,289 ) Preferred Stock Dividends (652,828 ) (652,829 ) Core FFO Available to Common Shares $ (3,884,098 ) $ (4,173,118 ) Weighted Average Shares Outstanding (basic) 3,389,661 3,389,661 Core FFO per Common Share (1.15 ) (1.23 ) Item 7A.
The facility is non-recourse to Power REIT and has perfected liens against all of Power REIT CEA portfolio properties except for the property located in Vinita, OK.
The facility is non-recourse to Power REIT and has perfected liens against all of Power REIT CEA portfolio properties except for the property located in Vinita, OK. The Greenhouse Loan had a 12 month draw period and then converts to a term loan that is fully amortizing over five years.
We regularly review the application of our accounting policies and evaluate the appropriateness of the estimates that are required to be made in order to prepare our consolidated financial statements.
We regularly review the application of our accounting policies and evaluate the appropriateness of the estimates that are required to be made in order to prepare our consolidated financial statements. Typically, estimates may require adjustments from time to time based on, among other things, changing circumstances and new or better information.
Revenue during the year ended December 31, 2023, consisted of rental income of $1,139,148, direct financing lease income of $915,000 and other income of $303,547.
Revenue during the year ended December 31, 2024, consisted of rental income of $1,135,193, direct financing lease income of $915,000, rental income – related parties of $785,000 and other income of $214,682.
At December 31, 2023, we owed debt in the principal amount of approximately $36,700,000 of which $14,700,000 relates to PWV, approximately $7,200,000 relates to PWRS, approximately $14,400,000 relates to the Greenhouse Loan and approximately $500,000 relates to the Salisbury loan that was retired during the first quarter or 2024 from sale proceeds.
At December 31, 2024, we owed debt in the principal amount of approximately $37,400,000 of which $14,500,000 relates to PWV, approximately $6,700,000 relates to PWRS, and approximately $16,700,000 relates to the Greenhouse Loan.
During 2023, the Trust’s revenue has been concentrated from certain tenants. For the fiscal year ended 2023, Power REIT collected approximately 84% of its consolidated revenue from two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 45% and 39% of consolidated revenue respectively.
For the fiscal year ended 2023, Power REIT collected approximately 84% of its consolidated revenue from the tenants of two properties. The tenants were Norfolk Southern Railway and Regulus Solar LLC which represented 45% and 39% of consolidated revenue respectively. The concentration percentages include the income from the recognition of security deposits related to defaulted leases.
The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless we redeem or otherwise repurchase them or they are converted.
The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless we redeem or otherwise repurchase them or they are converted. 56 As previously disclosed, on September 3, 2024, the Trust received a letter from the NYSE American regarding a lack of compliance with listing requirements (the “Deficiency Letter”).
Although the Greenhouse Loan is non-recourse to Power REIT, foreclosure of properties, would result in a significant decrease in assets and potential income to Power REIT.
There can be no assurance that PW CanRe, LLC Holdings will be able to satisfy the requirements of the lender which could result in the foreclosure of collateral. Although the Greenhouse Loan is non-recourse to Power REIT, foreclosure of properties would result in a decrease in assets and potential income to Power REIT.
The purchaser is an unaffiliated third party and the price was established based on an arm’s length negotiation.
The property was described in prior filings as Sherman 21 and 22 and was vacant and the construction was incomplete. The purchaser was an unaffiliated third party and the price was established based on an arm’s length negotiation.
Any decline in the estimated fair values of our assets could result in additional impairment charges in the future. It is possible that such impairments, if required, could be material. There can be no assurance that the impaired carrying values will equate to the ultimately realizable value of such assets.
The impairment in 2024 was based on an assessment of estimated values of the greenhouse portfolio. A further decline in the estimated fair values of our assets could result in additional impairment charges in the future. It is possible that such impairments, if required, could be material.
For further information, see Note 2 to the consolidated financial statements appearing following Item 16 of this document, which is incorporated herein by reference.
There can be no assurance that the impaired carrying values will equate to the ultimately realizable value of such assets. For further information, see Note 2 – Significant Accounting Policies to the consolidated financial statements appearing following Item 16 of this document, which is incorporated herein by reference. The significant accounting policies are not deemed to be Critical Accounting estimates.
The amount of principal payments remaining on Power REIT’s long-term debt as of December 31, 2023 is as follows: Total Debt 2024 15,529,584 2025 755,634 2026 797,628 2027 841,452 2028 887,325 Thereafter 17,933,071 Long term debt $ 36,744,694 Critical Accounting Estimates Critical accounting policies are those that require the application of management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that might change in subsequent periods.
As of the date of this filing, the forbearance agreement has terminated and the greenhouse portfolio is subject to foreclosure but we continue to explore options for a resolution with the bank (see Subsequent Events). 58 The amount of principal payments remaining on Power REIT’s consolidated debt as of December 31, 2024 is as follows: Total Debt 2025 $ 17,468,764 2026 $ 791,212 2027 $ 835,036 2028 $ 880,909 2029 $ 928,923 Thereafter $ 16,985,073 Long term debt $ 37,889,917 Critical Accounting Estimates Critical accounting policies are those that require the application of management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that might change in subsequent periods.
The balance of the loan as of December 31, 2023 and 2022 is approximately $14,358,000 (net of approximately $0 of debt costs) and $15,781,000 (net of approximately $219,000 of unamortized debt costs) During the year ended December 31, 2023, the Trust also recognized $160,000 loan modification expense in connection with the March 13, 2023 modification. 55 As of December 31, 2023, PW CanRe Holdings, LLC has an outstanding balance on the Greenhouse Loan of $14,358,000.
The balance of the loan as of December 31, 2024 and December 31, 2023 is approximately $16,720,000 (net of approximately $0 of debt costs) and $14,358,000 (net of approximately $0 of debt costs). During the twelve months ended December 31, 2024 and 2023, the Trust recognized $0 and $160,000, respectively of loan modification expense.
In early 2024, the Trust sold three properties which should help with liquidity. The net proceeds from the sale of the Salisbury, MA property was approximately $662,000 of unrestricted cash and the approximately $456,000 loan was retired at closing and is eliminated from current liabilities.
The net proceeds from the sale of the Salisbury, MA property was approximately $662,000 of unrestricted cash and the approximately $504,000 of debt was eliminated from liabilities.
The other sale produced approximately $53,000 of restricted cash and should generate cash flow from the seller financing provided that should help with liquidity to service the Greenhouse Loan. The Greenhouse Loan is in default and we continue to try to work with the lender to establish a path forward.
We sold two greenhouse properties in a transaction that produced approximately $53,000 of restricted cash at closing and generated approximately $345,000 of restricted cash from the seller financing provided which had a remaining balance of $ 1,005,000 at December 31, 2024 and should help with liquidity to service the Greenhouse Loan.
For the fiscal year ended 2022, Power REIT collected approximately 57% of its consolidated revenue from four properties. The tenants are NorthEast Kind Assets, LLC (“Sweet Dirt”), Fiore Management LLC (“Canndescent”), Norfolk Southern Railway and JAB Industries, Ltd (“JAB”), which represent 22%, 10%, 11% and 14% of consolidated revenue respectively.
For the fiscal year ended 2024, Power REIT collected approximately 88% of its consolidated revenue the tenants of three properties. The tenants are Norfolk Southern Railway, Regulus Solar LLC and Marengo Cannabis LLC which represent 32%, 28% and 28% of consolidated revenue respectively.
In addition, we are exploring the potential to use our existing corporate structure for strategic transactions including potentially merging assets or companies with the Trust. On January 6, 2023, a wholly owned subsidiary of Power REIT, sold its interest in five ground leases related to utility scale solar farms located in Tulare County, California for gross proceeds of $2,500,000.
In addition, we are exploring the potential to use our existing corporate structure for strategic transactions including potentially merging assets or companies with the Trust.
Liquidity and Capital Resources Our cash and cash equivalents and restricted cash totaled $4,104,884 as of December 31, 2023, an increase of $257,013 from December 31, 2022. During the year ended December 31, 2023, the increase in cash was primarily due to the proceeds from the sale of the Tulare and Sweet Dirt properties.
Liquidity and Capital Resources Our cash and cash equivalents and restricted cash totaled $2,231,586 as of December 31, 2024, a decrease of $1,873,298 from December 31, 2023. During the twelve months ended December 31, 2024, the decrease in cash was primarily due to the monthly expenses related to the vacant greenhouse properties and paydown of the Greenhouse Loan.
Other income increased by $893,923 due to a gain on disposal of the Tulare and Sweet Dirt properties netted with debt modification expense of $160,000. Net loss attributable to common shareholders during the years ended December 31, 2023 and 2022 was $15,018,342 and $14,906,310, respectively. Net loss attributable to common shareholders increased by $112,032.
In 2023 an expense due to debt modification of $160,000 occurred whereas in 2024, non-cash income increased by $215,492 for forgiveness of accounts payable. 54 Net loss attributable to common shareholders during the years ended December 31, 2024 and 2023 was $25,363,569 and $15,018,342, respectively. Net loss attributable to common shareholders increased by $10,345,227.
Recent Events On November 1, 2023, a wholly owned subsidiary of Power REIT (“PW SD”) sold its interest in a cannabis related greenhouse cultivation facility located in Maine to an affiliate of its tenant.
On January 8, 2024, two wholly owned subsidiaries of Power REIT, PW CO CanRE Sherman 6 LLC and PW CO CanRE MF LLC, sold two cannabis related greenhouse cultivation properties located in Ordway, Colorado to an affiliate of a tenant of one of the properties.
During the year ended December 31, 2022, our net cash generated was $14,791,443 which included $16,000,000 of proceeds from a new Greenhouse Loan, payments on long-term debt of $674,979, payment of debt issuance costs of $43,958 and payments for dividend payments to the holders of our Series A Preferred Stock of $489,620. 53 Our cash outlays at Power REIT (parent company) consist principally of professional fees, consultant fees, NYSE American listing fees, legal, insurance, shareholder service company fees, auditing costs and general and administrative expenses.
As of the date of this filing, the forbearance agreement has terminated and the greenhouse portfolio is subject to foreclosure but we continue to explore options for a resolution with the bank (see Note 14—Subsequent Events to the Financial Statements included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024). 55 Our cash outlays at Power REIT (parent company) consist principally of professional fees, consultant fees, NYSE American listing fees, legal, insurance, shareholder service company fees, auditing costs and general and administrative expenses.
Removed
As previously announced, PW SD had entered into a Purchase and Sale Agreement related to this property that has been renegotiated based on current circumstances as part of proceeding towards closing.
Added
Recent Events On February 6, 2025, our wholly owned subsidiary, PW CO CanRE JKL LLC received a Final Order and Entry of Judgement in favor of PW CO CanRE JKL LLC against the former tenant and guarantors of the lease in the amount of $10,988,749. The ruling eliminated claims by the former tenant against PW CO CanRE JKL LLC.
Removed
The total consideration was $4,787,000, of which $3,400,000 was paid in cash, $537,000 was paid in the form of the release of the security deposit held by PW SD and seller financing in the form of an $850,000 note with an 8.5% interest rate that will accrue until maturity on October 30, 2025.
Added
The Trust is evaluating the potential to collect against this litigation for this Judgement, but will treat any recovery on a cash basis for accounting purposes. (See Note 14—Subsequent Events to the Financial Statements included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024).
Removed
The note is secured by a second mortgage on the property and certain corporate and personal guarantees. Of the cash proceeds received from the Sweet Dirt sale, $1,642,187.50 was used to pay down the Greenhouse Loan.
Added
On January 24, 2025 we entered into a sales agreement (the “Sales Agreement”), with A.G.P./Alliance Global Partners pursuant to which we may, from time to time, issue and sell our Common Shares, however, the Sales Agent is not obligated to sell any shares of Common Stock and there are limits on the dollar amount of shares of common stock we can sell pursuant to the Sales Agreement.
Removed
The properties were acquired by Power REIT in 2013 for $1,550,000. 51 On November 1, 2023, a wholly owned subsidiary of Power REIT (“PW SD”) sold its interest in a cannabis related greenhouse cultivation facility located in Maine to an affiliate of its tenant.
Added
In addition, our ability to raise capital through the sale of securities may be limited by the rules of the SEC and NYSE American LLC (“NYSE American”) that place limits on the number and dollar amount of securities that may be sold.
Removed
PW SD had entered into a Purchase and Sale Agreement related to this property that had been renegotiated as part of proceeding toward closing.
Added
There can be no assurances that we will be able to raise the funds needed, especially in light of the fact that our ability to sell securities registered on our registration statement on Form S-3 will be limited until such time the market value of our voting securities held by non-affiliates is $75 million or more. 52 On December 26, 2024, a wholly owned subsidiary of Power REIT, PW CO CanRE JKL LLC, sold its interest related to a cannabis related greenhouse cultivation property located in Ordway, Colorado.
Removed
The total consideration was $4,787,000, of which $3,400,000 was paid in cash, $537,000 was paid in the form of the release of the security deposit held by PW SD and seller financing in the form of an $850,000 note with an 8.5% interest rate that will accrue until maturity on October 30, 2025.
Added
The sale price was $80,000 and the net proceeds were used to pay down the loan secured by the greenhouse portfolio and pay other accrued expenses related to the property. Effective October 1, 2024, PW CanRE Holdings entered into an extension of the forbearance agreement with the lender for the Greenhouse Loan.
Removed
The note is secured by a second mortgage on the property and certain corporate and personal guarantees. The sale of the Tulare solar ground leases and the PW SD cannabis related greenhouse cultivation facility are part of a strategic review as we continue to evaluate alternatives to enhance liquidity and improve our opportunities.
Added
The forbearance agreement terminated on January 31, 2025 and has not been extended (see Note 14—Subsequent Events to the Financial Statements included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024).
Removed
The decrease in total revenue was primarily related to a decrease of $5,884,400 in rental income from unrelated parties and to a lesser extent a decrease in rental income of $578,991 from transactions with related parties, due to defaulted leases related to the challenges within the cannabis industry.
Added
On January 30, 2024, a wholly owned subsidiary of Power REIT, PW Salisbury Solar LLC, sold its interest in a ground lease related to utility scale solar farms located in Salisbury, Massachusetts for gross proceeds of $1.2 million. The purchaser is an unaffiliated third party and the price was established based on an arm’s length negotiation.
Removed
The decrease in revenue is offset by an increase in other income of $303,366. Expenses for the year ended December 31, 2023 decreased $5,154,072 as compared to 2022. This is primarily due to a larger non-cash impairment charge of $16,739,040 in 2022 versus a non-cash impairment charge of $8,235,136 in 2023.
Added
As part of the transaction, the Municipal Debt was assumed by the purchaser and the PWSS Term Loan was paid off.
Removed
Due to tenant defaults, property maintenance expense increased $1,465,462 and property tax increased $95,529. Also, general and administrative expense increased $234,113, depreciation expense increased $755,185, interest expense increased $943,859 offset by a decrease in amortization of intangible assets of $144,316.
Added
The properties are described in prior filings as Sherman 6 (the tenant of which is affiliated with the tenant/purchaser) and Tamarack 14 which was vacant. The purchaser is an unaffiliated third party and the price was established based on an arm’s length negotiation. The sale price was $1,325,000.
Removed
For the year ended December 31, 2023, we accrued a dividend of our holders of Series A Preferred Stock of $652,829. For the year ended December 31, 2022, we accrued a dividend to our holders of Series A Preferred Stock of 163,207 and paid a cash dividend to our holders of Series A Preferred Stock of $489,620.
Added
As part of the transaction, a subsidiary of the Trust provided seller financing in the amount of $1,250,000 with an initial 10% interest rate that increases over time to 15% until maturity.
Removed
Our current loan liabilities totaled approximately $15.5 million as of December 31, 2023.
Added
The seller financing has a three-year maturity with a fixed amortization schedule of $40,000 for the first and second months, $45,000 for the third month and $15,000 per month thereafter until maturity. The note is secured by a first mortgage on the properties and certain corporate and personal guarantees.
Removed
In March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver (See Note 13 Subsequent Events). Unfortunately, this may lead to distressed sales which would have a negative impact on our prospects. As of the filing date, The Trust’s current liabilities far exceed current assets.
Added
On November 17, 2023, Anchor Hydro (“Anchor”) initiated a complaint, as amended, in the Michigan Circuit Court for the County of Calhoun (Case No. 2023-3145-CB) against Power REIT, PW MI CanRE Marengo LLC (collectively the “PW Defendants”) for Breach of Contract, Unjust Enrichment and Account Stated in the amount of approximately $600,000.
Removed
Our cash outlays at Power REIT (parent company) consist principally of professional fees, consultant fees, NYSE American listing fees, legal, insurance, shareholder service company fees, auditing costs and general and administrative expenses.
Added
The litigation relates to purported work by Anchor at the greenhouse property owned by PW MI CanRE Marengo LLC in Michigan.

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Other PW 10-K year-over-year comparisons