Power REIT
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
PW$6.75+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0001493152-24-012040
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001515
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 77 previous paragraphs and 78 current paragraphs.
37 unchanged; 26 reworded; 14 added; 12 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
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. 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).
Current report
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. 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. 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.
Current report
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. 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. 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.
Current report
Effective October 1, 2024, PW CanRE Holdings entered into an extension of the forbearance agreement with the lender for the Greenhouse Loan. 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).
Current report
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. 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. 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. 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.
Current report
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. The litigation relates to purported work by Anchor at the greenhouse property owned by PW MI CanRE Marengo LLC in Michigan. On July 9, 2024, Anchor and the PW Defendants entered into a settlement agreement 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. 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.
Current report
On September 11, 2024, PW CO CanRE Cloud Nine LLC received a Final Order and Entry of Judgement in favor of PW CO CanRE Cloud Nine LLC in the amount of approximately $10.9 million. 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.
Current report
Expenses for the year ended December 31, 2024 increased $10,741,325 as compared to 2023. This is primarily due to a larger non-cash impairment charge of approximately $20.0 million in 2024 versus a non-cash impairment charge of $8.2 million in 2023. The impairment charge relates to a write-down of the value of greenhouse properties. Property expenses, property taxes, general and administrative expense and depreciation expense all decreased in 2024 by $398,457, $44,218, $258,658 and $1,440,762, respectively which were offset by an increase in interest expense of $1,164,296 in 2024. The depreciation expense decrease was due to assets within the CEA portfolio considered assets held for sale.
Current report
Other income decreased by $431,295 due to a decrease in the gain on disposal of assets of $806,787 in 2024. 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.
Current report
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”). Specifically, since the Trust had incurred losses in two out of the last three years, it is required to have total equity of greater than $2 million, while it reported stockholders’ equity of $322,626 at June 30, 2024. As part of evaluating a plan to comply with the NYSE American listing requirements, the Trust embarked on analysis of the accounting treatment for its Preferred Shares which historically were classified as Mezzanine Equity. Based on its review, the Trust determined that the Preferred Shares should be treated as Equity. The Trust retained a qualified third-party consultant to assist with its analysis of the accounting treatment for the Preferred Shares. Ultimately, the Trust concluded that it had incorrectly classified the Preferred Shares on its balance sheet and that they should be treated as Equity (not mezzanine equity) and the financial statements should be re-stated accordingly.
Current report
While the Trust believes that the restatement may be material from a quantitative perspective, it does not believe that the restatement is material from a qualitative standpoint other than for the second quarter of 2024 as a result of the non-compliance with the NYSE listing requirements. Accordingly, on September 24, 2024, the Trust filed an amended quarterly report on Form 10-Q for the quarter ended June 30, 2024 (the “10-Q/A”). Management concluded that for the rest of the prior periods, the error was immaterial and corrected within the 10-Q/A.
Current report
The only changes to the financial Statements contained in the original Form 10-Q and the 10-Q/A for the quarter ended June 30, 2024 were:
Current report
Impairment of Long-Lived Assets
Current report
CORE FUNDS FROM OPERATIONS (FFO)
Removed paragraphs (12)
Previous report
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. 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. 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. 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.
Previous report
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. PW SD had entered into a Purchase and Sale Agreement related to this property that had been renegotiated as part of proceeding toward closing. 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. The note is secured by a second mortgage on the property and certain corporate and personal guarantees.
Previous report
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.
Previous report
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.
Previous report
Cash Flows
Previous report
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 primary use of cash was for working capital requirements and financing activities which was offset by proceeds from the sale of two properties.
Previous report
During the year ended December 31, 2023, our net cash used by operating activities was $2,622,874. During the year ended December 31, 2022, the Trust’s net cash generated by operating activities was $6,840,237. The difference was due to the decrease in net income generated by tenants defaulting on leases.
Previous report
During the year ended December 31, 2023, our net cash generated in investing activities was $5,228,456. During the year ended December 31, 2022, the Trust’s net cash used in investing activities was $20,955,110. The difference was due to selling two properties in 2023.
Previous report
During the year ended December 31, 2023, our net cash used for financing activities was $2,348,569 which was used to repay principal on long-term debt. 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.
Previous report
Preferred Dividend Arrearages
Previous report
As of December 31, 2023, the Trust has 336,944 aggregate outstanding shares of Series A Preferred Stock of (par value $25.00 per share). During the year of 2023, the Trust did not declare a dividend on its Series A Preferred Stock. Dividends on the Series A Preferred Shares are cumulative and therefore will continue to accrue at an annual rate of $0.4844 per share per quarter. As of December 31, 2023, the cumulative amount of unpaid dividends on our issued and outstanding Series A Preferred Shares totaled approximately $816,000.
Previous report
Asset Impairment
Reworded paragraphs (26)
Previous wording
We are structured as a holding company and owns our assets through twenty-four direct and indirect wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. 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.
Current wording
We are structured as a holding company and owns our assets through twenty-four direct and indirect wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. 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.
Previous wording
Taking Steps to Position the Company for Future Growth Opportunities
Current wording
●Taking steps to position the Trust for future growth opportunities.
Previous wording
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. The purchaser is an unaffiliated third party and the price was established based on an arm’s length negotiation. The properties were acquired by Power REIT in 2013 for $1,550,000.
Current wording
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. As part of the transaction, the Municipal Debt was assumed by the purchaser and the PWSS Term Loan was paid off.
Previous wording
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. 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. We also have several properties that we are marketing for sale and/or lease which have been classified as “Assets Held for Sale.”
Current wording
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. 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. Along these lines, in 2023 and 2024 we completed sales of assets for total gross proceeds of approximately $9.89 million which included $2.1 million of seller financing provided to the buyers. We also have several properties that we are marketing for sale and/or lease which have been classified as “Assets Held for Sale.”
Previous wording
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.
Current wording
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. A loan secured by the greenhouse portfolio is in default. As of this date of the filing, the previously disclosed 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).
Previous wording
Revenue during the years ending December 31, 2023 and 2022 was $2,357,695 and $8,517,720, respectively. 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. 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. 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. 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. 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.
Current wording
Revenue during the years ending December 31, 2024 and 2023 was $3,049,875 and $2,222,483, respectively. 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. The increase in total revenue was primarily related an increase of $785,000 of rental income - related parties which was a security deposit recognized as income, a decrease of $3,955 in rental income from unrelated parties, and a increase in other income of $46,347.
Previous wording
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.
Current wording
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.
Previous wording
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 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.
Current wording
During 2024, the Trust’s revenue has been concentrated from certain tenants. 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. 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.
Previous wording
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.
Current wording
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. 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 $37,000 is restricted cash related to the Greenhouse Loan.
Previous wording
Our current loan liabilities totaled approximately $15.5 million as of December 31, 2023. 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.
Current wording
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. We are not current on payment of property taxes for the greenhouse portfolio which are included on the Balance Sheet as accrued expenses and liabilities held for sale for approximately $1,162,000. If the property tax remains delinquent, the greenhouse portfolio will be subject to foreclosure actions starting in the first quarter of 2026.
Previous wording
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.
Current wording
On a consolidated basis, the Trust’s current liabilities far exceed current assets. 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. 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. In addition, we are continuing to explore options related to a resolution of the Greenhouse Loan (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).
Previous wording
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 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.
Current wording
In 2024, the Trust sold four properties in an effort to help with liquidity. 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. 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. We sold one greenhouse property in a transaction that produced approximately $51,000 with the net proceeds used to service the Greenhouse Loan.
Previous wording
The Greenhouse Loan is in default and we continue to try to work with the lender to establish a path forward. 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. 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.
Current wording
The Greenhouse Loan is in default and in March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver. 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 status with the lender may lead to distressed sales which would have a negative impact on our prospects. A forbearance agreement with the lender for the Greenhouse Loan was effective on May 10, 2024, which provides additional time to retire the loan. The expiration date of the original forbearance agreement was September 30, 2024. On September 30, 2024, the PW CanRE Holdings entered into an amendment to the forbearance agreement which moved the expiration of the forbearance agreement to January 31, 2025. 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).
Previous wording
To meet our working capital and longer-term capital needs, we rely on cash provided by our operating activities, proceeds received from the issuance of equity securities, proceeds received from borrowings, which may be secured by liens on assets as well as proceeds from the sale of assets. 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. 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. 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. To the extent we need to raise additional capital to meet our obligations, there can be no assurance that financing will be available when needed on favorable terms.
Current wording
To meet our working capital and longer-term capital needs, we rely on cash provided by our operating activities, proceeds received from the issuance of equity securities, proceeds received from borrowings, which may be secured by liens on assets as well as proceeds from the sale of assets. 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. Of the approximately $2.6 million, the Trust received unrestricted net proceeds of approximately $662,000 related to the sale of a solar ground lease and $105,000 of restricted net proceeds that were used to service the Greenhouse Loan. 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. 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. To the extent we need to raise additional capital to meet our obligations, there can be no assurance that financing will be available when needed on favorable terms.
Previous wording
On December 31, 2012, as part of the Salisbury land acquisition, PWSS assumed existing municipal financing (“Municipal Debt”). The Municipal Debt has approximately 10 years remaining. 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).
Current wording
On December 31, 2012, as part of the Salisbury land acquisition, PW Salisbury Solar, LLC (“PWSS”) assumed existing municipal financing (“Municipal Debt”). 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. On January 30, 2024, the PWSS property was sold and the loan was paid off.
Previous wording
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. 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). On January 30, 2024, the PWSS property was sold and the loan was paid off (see Note 13 Subsequent Events).
Current wording
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. 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. On January 30, 2024 the PWSS property was sold and the loan was paid off.
Previous wording
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. 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).
Current wording
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. 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, 2024 and December 31, 2023 was approximately $6,492,000 (net of approximately $213,000 of capitalized debt costs) and approximately $6,957,000 (net of unamortized debt costs of approximately $235,000), respectively.
Previous wording
On November 25, 2019, Power REIT, through a subsidiary, PW PWV Holdings LLC (“PW PWV”), entered into a loan agreement (the “PW PWV Loan Agreement”) with a certain lender for $15,500,000 (the “PW PWV Loan”). The PW PWV Loan is secured by pledge of PW PWV’s equity interest in P&WV, its interest in the Railroad Lease and a security interest in a deposit account (the “Deposit Account”) pursuant to a Deposit Account Control Agreement dated November 25, 2019 into which the P&WV rental proceeds are deposited. Pursuant to the Deposit Account Control Agreement, P&WV has instructed its bank to transfer all monies deposited in the Deposit Account to the escrow agent as a dividend/distribution payment pursuant to the terms of the PW PWV Loan Agreement. The PW PWV Loan is evidenced by a note issued by PW PWV to the benefit of the lender for $15,500,000, with a fixed interest rate of 4.62% and fully amortizes over the life of the financing which matures in 2054 (35 years). The PW PWV Loan is non-recourse to Power REIT. The balance of the loan as of December 31, 2023 was approximately $14,412,000 (net of approximately $276,000 of capitalized debt costs).
Current wording
On November 25, 2019, Power REIT, through a subsidiary, PW PWV Holdings LLC (“PW PWV”), entered into a loan agreement (the “PW PWV Loan Agreement”) with a certain lender for $15,500,000 (the “PW PWV Loan”). The PW PWV Loan is secured by pledge of PW PWV’s equity interest in P&WV, its interest in the Railroad Lease and a security interest in a deposit account (the “Deposit Account”) pursuant to a Deposit Account Control Agreement dated November 25, 2019 into which the P&WV rental proceeds are deposited. Pursuant to the Deposit Account Control Agreement, P&WV has instructed its bank to transfer all monies deposited in the Deposit Account to the escrow agent as a dividend/distribution payment pursuant to the terms of the PW PWV Loan Agreement. The PW PWV Loan is evidenced by a note issued by PW PWV to the benefit of the lender for $15,500,000, with a fixed interest rate of 4.62% and fully amortizes over the life of the financing which matures in 2054 (35 years). The PW PWV Loan is non-recourse to Power REIT. The balance of the loan as of December 31, 2024 was approximately $14,198,000 (net of approximately $267,000 of capitalized debt costs).
Previous wording
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 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. On October 28, 2022, the terms of the Greenhouse Loan were amended such that the amortization period was extended from 5 years to 10 years for the calculation of debt service coverage ratio and a 6-month debt service payment reserve requirement of $1 million was established. On March 13, 2023 the Greenhouse Loan entered into an additional modification of which the terms are summarized as follows:
Current wording
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”). 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. The interest rate on the Greenhouse Loan was 5.52% with an additional default interest rate of 5.0% and throughout the term of the loan, a debt service coverage ratio of equal to or greater than 2.00 to 1.00 must be maintained. On October 28, 2022, the terms of the Greenhouse Loan were amended such that the amortization period was extended from 5 years to 10 years for the calculation of debt service coverage ratio and a 6-month debt service payment reserve requirement of $1 million was established. On March 13, 2023 an additional modification of the terms of the Greenhouse Loan was implemented which is summarized as follows:
Previous wording
Debt issuance expenses of approximately $0 and $44,000 have been capitalized during the twelve months ended December 31, 2023 and 2022, 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. 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.
Current wording
Debt issuance expenses of $0 have been capitalized during the twelve months ended December 31, 2024 and 2023, respectively. 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. 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. During the twelve months ended December 31, 2024 and 2023, the Trust recognized approximately $850,000 and $0, respectively, of late charges, forbearance fees, legal fees, foreclosure fees and appraisal fees which is included in interest expense in Consolidated Statements of Operations. During the twelve months ended December 31, 2024, approximately $3,384,000 of accrued loan expenses related to the Greenhouse Loan is classified as current portion of long-term debt on the Balance Sheet.
Previous wording
As of December 31, 2023, PW CanRe Holdings, LLC has an outstanding balance on the Greenhouse Loan of $14,358,000. The lender has declared a default which allows for the acceleration of the Greenhouse Loan which is being treated as a current debt obligation. In March 2024, the lender filed a litigation seeking among other things, foreclosure and appointment of a receiver (See Note 13 Subsequent Events.) 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 significant decrease in assets and potential income to Power REIT.
Current wording
As of December 31, 2024, PW CanRe Holdings, LLC has an outstanding balance on the Greenhouse Loan of $16,720,000. 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. On March 13, 2024, East West Bank (“EWB”) initiated a complaint in the Superior Court of California, County of Los Angeles (Case 24STCV06180) against PW CanRE Holdings, LLC, PW CanRE of Colorado Holdings LLC, PW ME CanRE SD LLC, PW CO CanRE Walsenburg LLC, PW Co CanRE JKL LLC, PW CO CanRE JAB LLC, PW CO CanRE Tam 19 LLC, PW CO CanRE Mav 14 LLC, PW CO CanRE Gas Station LLC, PW CO CanRE Grail LLC, PW CO CanRE Tam 7 LLC, PW CO CanRE Cloud Nine LLC, PW CO CanRE Apotheke LLC, PW CO CanRE Mav 5 LLC, PW CO CanRE MF LLC, PW MillPro NE LLC, PW CA CanRE Canndescent LLC and PW MI CanRE Marengo LLC. The litigation relates to a loan secured by various properties held by PW CanRE Holdings, LLC through its ownership of the various subsidiaries that are also named in the complaint. 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. 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. A forbearance agreement with the lender for the Greenhouse Loan was effective on May 10, 2024, which provides additional time to retire the loan. The expiration date of the original forbearance agreement was September 30, 2024. On September 30, 2024, the Trust entered into an amendment to the forbearance agreement which moved the expiration of the forbearance agreement to January 31, 2025. 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).
Previous wording
The amount of principal payments remaining on Power REIT’s long-term debt as of December 31, 2023 is as follows:
Current wording
The amount of principal payments remaining on Power REIT’s consolidated debt as of December 31, 2024 is as follows:
Previous wording
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. We believe that our revenue recognition policies meet these criteria. These policies are as follows:
Current wording
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. We believe that our Impairment of Lont-Lived Assets policy Asset Impairment policies meets these criteria.
Previous wording
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. 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. 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.
Current wording
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. 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 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. There can be no assurance that the impaired carrying values will equate to the ultimately realizable value of such assets.
Previous wording
For further information, see Note 2 to the consolidated financial statements appearing following Item 16 of this document, which is incorporated herein by reference.
Current wording
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.
Previous wording
Core FFO: Management believes that Core FFO is a useful supplemental measure of the Trust’s operating performance. Management believes that alternative measures of performance, such as net income computed under GAAP, or Funds From Operations computed in accordance with the definition used by the National Association of Real Estate Investment Trusts (“NAREIT”), include certain financial items that are not indicative of the results provided by the Trust’s asset portfolio and inappropriately affect the comparability of the Trust’s period-over-period performance. These items include non-recurring expenses, such as those incurred in connection with litigation, one-time upfront acquisition expenses that are not capitalized under ASC-805 and certain non-cash expenses, including stock-based compensation expense amortization and certain up front financing costs. FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate, which are included in the determination of net loss in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. Therefore, management uses Core FFO and defines it as net income excluding such items. Management believes that, for the foregoing reasons, these adjustments to net income are appropriate. The Trust believes that Core FFO is a useful supplemental measure for the investing community to employ, including when comparing the Trust to other REITs that disclose similarly adjusted FFO figures, and when analyzing changes in the Trust’s performance over time. Readers are cautioned that other REITs may use different adjustments to their GAAP financial measures than we do, and that as a result, the Trust’s Core FFO may not be comparable to the FFO measures used by other REITs or to other non-GAAP or GAAP financial measures used by REITs or other companies.
Current wording
Management believes that Core FFO is a useful supplemental measure of the Trust’s operating performance. Management believes that alternative measures of performance, such as net income computed under GAAP, or Funds From Operations computed in accordance with the definition used by the National Association of Real Estate Investment Trusts (“NAREIT”), include certain financial items that are not indicative of the results provided by the Trust’s asset portfolio and inappropriately affect the comparability of the Trust’s period-over-period performance. These items include non-recurring expenses, such as those incurred in connection with litigation, one-time upfront acquisition expenses that are not capitalized under ASC-805 and certain non-cash expenses, including stock-based compensation expense amortization and certain up front financing costs. FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate, which are included in the determination of net loss in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. Therefore, management uses Core FFO and defines it as net income excluding such items. Management believes that, for the foregoing reasons, these adjustments to net income are appropriate. The Trust believes that Core FFO is a useful supplemental measure for the investing community to employ, including when comparing the Trust to other REITs that disclose similarly adjusted FFO figures, and when analyzing changes in the Trust’s performance over time. Readers are cautioned that other REITs may use different adjustments to their GAAP financial measures than we do, and that as a result, the Trust’s Core FFO may not be comparable to the FFO measures used by other REITs or to other non-GAAP or GAAP financial measures used by REITs or other companies.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
As of the filing date, The Trust’s current liabilities far exceed current assets. 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.
Previous report — wording carried elsewhere
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. Our cash outlays related to our various property-owning subsidiaries consist principally of principal and interest expense on debts, property maintenance, property taxes, insurance, legal as well as other property related expenses that are not covered by tenants. To the extent we need to raise additional capital to meet our obligations, there can be no assurance that financing on favorable terms will be available when needed. If we are unable to sell certain assets when anticipated at prices anticipated, we may not have sufficient cash to fund operations and commitments.