SEC 8-K filings with transcript text
Aug 12, 2022
2 ex99-1.htm
Exhibit 99.1
Power REIT Provides Corporate Update
Stable Quarterly FFO with Potential for Significant Internal Growth
WITH RESPECT TO Michigan Greenhouse Cannabis Licensing
Old Bethpage, New York, August 12, 2022 (GLOBE NEWSWIRE) Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”), with a focused “Triple Bottom Line” strategy and a commitment to people, planet, and profit, is providing information regarding its quarterly financial performance, cannabis licensing at is Michigan greenhouse property and other portfolio updates. The information provided below includes highlights from its quarterly report and current business activities as reported on its Form 10Q filed with the
Q2
●During the second quarter of 2022, the Trust reported Core FFO of $0.41 per share compared to Core FFO per share of $0.51 for the comparable period in 2021.
●Core FFO for the period ended June 30, 2022, of $0.41 per share compares to $0.40 per share for the quarter ended March 31, 2022.
Commenting on the results and Q2-2022 achievements, David Lesser, Chief Executive Officer stated, “Power REIT is currently focused on greenhouse as a unique real estate asset class as a sustainable solution for the cultivation of certain crops. Since pivoting to focus on greenhouses, we have acquired approximately 2.2 million square feet of which approximately 51% is currently focused on food cultivation and 49% is currently focused on cannabis cultivation. We recently acquired a 1.1 million square foot greenhouse focused on the cultivation of tomatoes which we believe was acquired at a deep discount to replacement cost. Regarding our cannabis portfolio, the wholesale price for cannabis has exhibited significant price compression over the past several quarters in most markets, which is impacting our cannabis tenants. As we work through this market dynamic, we remain optimistic that our investment thesis focused on greenhouses provides a competitive advantage relative to the common approach to cannabis cultivation in the form of warehouse/indoor facilities. Simply put, greenhouses cost less to build and are more efficient to operate than warehouse style indoor cultivation facilities.”
Michigan Greenhouse Cannabis Licensing Update
As previously disclosed in a Form 8K filed July 18, 2022, cannabis licensing for Power REIT’s property located in Michigan has been delayed. The Michigan Cannabis Regulatory Authority (“CRA”) application requires submitting a Certificate of Occupancy (“CO”) or alternative documentation where a CO does not exist, Since the property has Agricultural zoning, it is exempt from the Marengo Township building code and the requirement for a CO. Power REIT requested a simple two sentence letter from Marengo Township that the CRA had pre-approved in order to meet this requirement but Marengo Township refused to provide the letter which ultimately led to Power REIT filing two litigations against Marengo Township. As previously disclosed, PW Marengo recently secured the requested statement from Marengo Township and the application for cannabis licensing was submitted to CRA. With respect to the litigations, Power REIT agreed to dismiss one of the two actions and Marengo Township has agreed to continue with a court ordered mediation process to resolve remaining issues.
With the licensing process now moving forward, on August 9, 2022, CRA performed a pre-licensure inspection and identified that no deficiencies existed. In addition to the CRA approval we received, we are required to secure the approval of the Michigan Bureau of Fire Services (“BFS”). The BFS process is underway but there is no certainty as to the timing to complete this process and ultimately secure the cannabis licenses. We will continue to provide updates as the licensing process progresses.
Due to the uncertainty of the timing for receipt of cash rent, effective Q1 2022, we concluded that income from this lease will be recognized on a cash basis rather than on a straight-line basis until there is more clarity regarding the ability to pay rent based on commencement of operations. As such, no income was reported for this property during Q1 2022 and Q2 2022. The Michigan greenhouse property represents the single largest asset in terms of potential income generation within Power REIT’s existing portfolio. Based on the lease rate in place, and assuming income is recognized on a straight-line basis, the incremental Core FFO from this asset would be approximately $0.38 per share per quarter.
Leasing and Tenant Activity
When we started investing in cannabis greenhouses in Colorado in mid-2019, we created a sculpted rent schedule to designed to repay Power REIT’s investment over 36 months followed by a lower long-term ongoing rent. This was established based on market conditions that showed significant profit potential, but we ultimately expected price compression and felt this str
May 10, 2022
2 ex99-1.htm
Exhibit 99.1
Power REIT Provides Quarterly Update
Old Bethpage, New York, May 10, 2022 (GLOBE NEWSWIRE) Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”), with a focused “Triple Bottom Line” strategy and a commitment to people, planet, and profit, today announced that it is has filed its quarterly report for the three months ended March 31, 2022 on Form 10Q with the SEC. The information provided below is an update that includes highlights from its quarterly report and current business activities.
Three Months Ended March 31,
2022 2021
Revenue $1,985,516 $1,820,927
Net Income Attributable to Common Shareholders $997,880 $1,108,128
Net Income per Common Share (basic) 0.25 0.34
Core FFO Available to Common Shareholders $1,348,533 $1,274,939
Core FFO per Common Share 0.40 0.46
Growth Rates:
Revenue 9%
Net Income Attributable to Common Shareholders -10%
Net Income per Common Share (basic) -27%
Core FFO Available to Common Shareholders 6%
Core FFO per Common Share -13%
Commenting on the results and Q1-2021 achievements, David Lesser, Chief Executive Officer stated, “As our investment platform continues to evolve, we remain focused on sustainable farming solutions by investing in Controlled Environment Agriculture properties in the form of greenhouses. Our legacy is in other sustainable real estate assets and we continue to embrace that ethos. The price for wholesale cannabis has compressed dramatically over the past several quarters, which has had a significant impact on our cannabis tenants. As we work through these headwinds, we are proactively backfilling space and are in active negotiations with replacement tenants. We have also now diversified to add a greenhouse focused on the cultivation of tomatoes.”
Mr. Lesser continued, “We remain optimistic that our investments in greenhouse properties provide a sustainable platform for indoor farming of food as well as cannabis. Greenhouses are more cost efficient to build and more energy efficient to operate than warehouse style indoor cultivation facilities. We are also encouraged that the tenant at our Michigan greenhouse commenced hemp cultivation having received a license from the Michigan Department of Agriculture and Rural Development that governs such activity. This will help our tenant gain valuable experience growing a strain of cannabis plant and we believe it may also support our belief that the greenhouse carries an agricultural property designation while growing cannabis.”
●During the first quarter of 2022, the Trust reported Core FFO of $0.40 per share (as adjusted), compared to Core FFO per share of $0.46 for the comparable period in 2021. Excluding one-time items and other adjustments Core FFO would have been $0.46 per share for the period ended, March 31, 2022, compared to $0.46 per share for the period ended March 31, 2021. These results reflect the following one-time adjustments:
○Core FFO for the period ended March 31, 2022 would have been $0.46 per share excluding two, one-time adjustments that in total reduced FFO by $0.06 per share related to eliminating straight-line rent for two tenants based on concerns about rent collectability at two properties located in Huerfano County, Colorado.
○Core FFO for the period ended March 31, 2022 of $0.40 per share compares to $0.35 per share for the quarter ended December 31, 2021.
As previously disclosed, the Trust has stopped including revenue from our property located in Michigan due to uncertainty around cannabis licensing that is the subject of a previously announced litigation related to the designation of the property as an agricultural use while growing cannabis. Had the straight-line rent for the Michigan property been included in the first quarter 2022 calculation, the incremental FFO would increase by approximately $0.38 per share per quarter. Effective April 27, 2022, our tenant received a license for the cultivation of Hemp and has commenced growing operations.
On March 31, 2022, Power REIT, through a newly formed wholly owned subsidiary, PW MillPro NE LLC, (“PW MillPro”), acquired its largest greenhouse property to date for $9.35 million in O’Neill, Nebraska. The greenhouse is a 1,121,513 square foot cultivation facility (the “MillPro Facility”) on approximately 86-acres, which will be used for the cultivation of tomatoes. The acquisition included an additional 4.88-acre property with a 21-room employee housing building, which is a key strategic benefit for attracting the necessary labor to operate the greenhouse. As part of the transaction, the Trust agreed to fund the replacement of Energy Curtains for $534,430. Simultaneous with the acquisition, PW MillPro entered into a 10-year “triple-net” lease (the “MillPro Lease”) with Millennium Produce of Nebraska LLC (“MillPro”), a subsidiary of Millennium Sustainable Ventures Corp., of which David Lesser is CEO and Chairman. MillPro will operate
Apr 1, 2022
2 ex99-1.htm
Exhibit 99.1
Power REIT Announces Fourth Quarter and Full Year 2021 Results – Net Income Per Share Increased 42%
Core FFO Per Common Share Increased 44%
Old Bethpage, New York, April 1, 2022 (GLOBE NEWSWIRE) Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”), with a focused “Triple Bottom Line” strategy and a commitment to people, planet, and profit, today announced that it is providing an update that includes highlights of the Trust’s financial and operating results for the three and twelve months ended December 31, 2021.
Three Months Ended December 31, Year Ended December 31,
2021 2020 2021 2020
Revenue $1,785,809 $1,394,613 $8,457,914 $4,272,709
Net Income Attributable to Common Shareholders $670,730 $863,970 $4,491,656 $1,891,644
Net Income per Common Share (basic) 0.21 0.42 1.41 0.99
Core FFO Available to Common Shareholders $1,115,079 $973,578 $6,139,903 $2,560,225
Core FFO per Common Share 0.35 0.51 1.93 1.34
Growth Rates:
Revenue 28%
98%
Net Income Attributable to Common Shareholders -22%
137%
Net Income per Common Share (basic) -49%
42%
Core FFO Available to Common Shareholders 15%
140%
Core FFO per Common Share -31%
44%
During the year, Power REIT deployed all of the approximately $37 million of the capital raised in the Rights Offering which was completed in February 2021. During the fourth quarter of 2021, the Trust reported a Quarterly FFO Per Share of $0.35. During the fourth quarter, the Trust recorded two one-time write-offs for the termination of leases with Cloud Nine LLC and The Grail Project LLC. Additionally, straight-line rent for the Michigan property starting in Q4 2021 was omitted from straight-line rent and created a one-time write-off to adjust for the straight-line that was recorded during the third quarter of 2021. These three one-time adjustments combined reduced FFO by $0.16 per share. We anticipate resuming straight-line rent for the Michigan property once there is a clearer sense of timing with respect to licensing and commencement of operations. Had the straight-lined rent for the Michigan property been included in the fourth quarter 2021 calculation, the incremental FFO would add approximately $0.38 per share per quarter. On an adjusted basis, if we did not make these three one-time adjustments, and did not omit straight-line rent from the Michigan property in Q4, our Quarterly FFO Per Share for the fourth quarter of 2021 would have been $0.89.
Commenting on the Trust’s financial and operating results, David Lesser, Chief Executive Officer stated, “We are pleased with our external growth activity last year. We invested approximately $48 million in 9 greenhouse properties primarily from the funds generated through our non-dilutive rights offering completed in February of 2021. These acquisitions are consistent with our business strategy that we commenced in 2019, positioning ourselves as an emerging technology company that focuses on real estate for greenhouse plant cultivation. With a focus on environmental sustainability across our entire platform, greenhouses provide superior sustainable farming alternatives for the future. Our goal moving into 2022 and beyond is to continue our growth efforts and generate long-term cash flow from our portfolio.”
Mr. Lesser concluded, “From an earnings perspective, we increased our Core FFO per common share by 44% year over year. We remain confident in our long-term strategy that greenhouses provide the most economically and environmentally sustainable path for cultivation and focused on managing our existing portfolio in lockstep with accretive acquisitions.”
Power REIT’s portfolio currently comprises:
● 21 Controlled Environment Agriculture (CEA) properties (greenhouses) totaling more than 1,000,000 square feet;
● 7 solar farm ground leases totaling 601 acres; and
● 112 miles of railroad property.
During 2021 the Trust acquired 9 greenhouse properties at an average unlevered yield of approximately 18%. This is indicative of the current market conditions where the Trust seeks to acquire and expand its greenhouse portfolio.
PSP – Tamarack 13 and 14
On August 11, 2021, our wholly owned subsidiary, PW CO CanRe MF LLC (“CanRe MF”), filed a breach of contract claim against PSP Management LLC (“PSP”) related to the lease (the “PSP Lease”) for property (the MF Property) owned by CanRe MF. As a result, PSP was evicted on November 1, 2021. Currently, this space is being marketed to a variety of prospective tenants.
Golden Leaf Lane – Maverick 5
On November 5, 2021, our wholly owned subsidiary, PW CO CanRe Mav 5 LLC (“CanRe Mav 5”), terminated its lease (the “OCG Lease”) with Original Cannabis Growers of Ordway LLC (“OCG”) which was executed on March 19, 2020. On November 5, 2021, Green Leaf Lane LLC (“Green Leaf”) signed a 20-year lease with 2, 5-year renewal options at an Unleveraged FFO Yield of 18.5%. Construction was com
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