Power REIT Files 2023 Annual Report on Form 10-K

TL;DR

<b>Power REIT filed its 2023 10-K, detailing financial performance and key operational entities.</b>

AI Summary

Power REIT (PW-PA) filed a Annual Report (10-K) with the SEC on March 29, 2024. Power REIT reported its fiscal year 2023 results, with the filing dated March 29, 2024. The company's fiscal year ends on December 31st. Key entities include PW:GreenhousePropertiesMember, PW:AuxiliaryBuildingsMember, PW:PWTulareSolarLLCMember, and PW:PWRegulusSolarLLCMember. The filing details financial data for common stock, preferred stock, and retained earnings for the fiscal years 2021, 2022, and 2023. Customer concentration risk is noted for sales revenue, with specific mention of PW:CustomerOneMember and PW:CustomerTwoMember.

Why It Matters

For investors and stakeholders tracking Power REIT, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Power REIT's financial health and operational structure for the fiscal year 2023, crucial for investors assessing the company's performance and future prospects. The detailed breakdown of assets, liabilities, and equity, along with specific mentions of subsidiaries and customer concentration, offers insights into the REIT's business model and potential risks.

Risk Assessment

Risk Level: medium — Power REIT shows moderate risk based on this filing. The company faces customer concentration risk, as indicated by the mention of specific customers like PW:CustomerOneMember and PW:CustomerTwoMember in relation to sales revenue, which could impact financial stability if these customers reduce their business.

Analyst Insight

Investors should review the specific revenue streams and customer contracts detailed within the 10-K to understand the extent of customer concentration risk and its potential impact on Power REIT's future earnings.

Key Numbers

• 2023-12-31 — Fiscal Year End (Period of report)
• 2024-03-29 — Filing Date (Date of filing)
• 2023-01-01 — Fiscal Year Start (Reporting period)
• 2022-12-31 — Prior Year End (Comparative period)

Key Players & Entities

• Power REIT (company) — Filer name
• PW:CommonSharesMember (company) — Equity type
• PW:Sec7.75SeriesCumulativeRedeemablePerpetualPreferredStockLiquidationPreference25PerShareMember (company) — Preferred stock type
• PW:SeriesACumulativeRedeemablePerpetualPreferredStockMember (company) — Preferred stock type
• PW:GreenhousePropertiesMember (company) — Subsidiary/Asset type
• PW:AuxiliaryBuildingsMember (company) — Asset type
• PW:PWTulareSolarLLCMember (company) — Subsidiary
• PW:PWRegulusSolarLLCMember (company) — Subsidiary

FAQ

Risk Factors

• Customer Concentration Risk [medium — market]: Sales revenue is subject to customer concentration risk, with specific customers like PW:CustomerOneMember and PW:CustomerTwoMember identified in relation to sales for the fiscal years 2023 and 2022.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-03-29: Filing Date — Date the 10-K was officially filed with the SEC.

Key Financial Figures

• $25 — Preferred Stock, Liquidation Preference $25 per Share PW.A NYSE American, LLC
• $1.64 — or "common stock") on June 30, 2023 of $1.64. As of March 27, 2024, there were 3,3
• $9,350,000 — g building (the "Housing Facility") for $9,350,000 and closing costs of approximately $91,
• $91,000 — ,000 and closing costs of approximately $91,000 located in O'Neill, Nebraska (collectiv
• $1 million — riple-net lease with an initial rent of $1 million per year after a 6-month deferred rent
• $9.2 million — of Intent to purchase the property for $9.2 million with a deadline of December 31, 2024. T
• $2.5 million — ounty, California for gross proceeds of $2.5 million. The properties were acquired by our su
• $1,550,000 — acquired by our subsidiary in 2013 for $1,550,000. On November 1, 2023, a wholly owned
• $4,787,000 — rd closing. The total consideration was $4,787,000, of which $3,400,000 was paid in cash,
• $3,400,000 — consideration was $4,787,000, of which $3,400,000 was paid in cash, $537,000 was paid in
• $537,000 — , of which $3,400,000 was paid in cash, $537,000 was paid in the form of the release of
• $850,000 — and seller financing in the form of an $850,000 note with an 8.5% interest rate that wi
• $4.1 million — r 31, 2023, the Trust had approximately $4.1 million of cash and approximately $15.5 million
• $15.5 million — $4.1 million of cash and approximately $15.5 million of current loan liabilities. The curren
• $14.4 million — loan liabilities include approximately $14.4 million of a bank loan secured by the majority

Filing Documents

• form10-k.htm (10-K) — 1939KB
• ex19-1.htm (EX-19.1) — 7KB
• ex21-1.htm (EX-21.1) — 29KB
• ex23-1.htm (EX-23.1) — 3KB
• ex31-1.htm (EX-31.1) — 11KB
• ex32-1.htm (EX-32.1) — 6KB
• ex97-1.htm (EX-97.1) — 6KB
• ex97-1_001.jpg (GRAPHIC) — 409KB
• ex97-1_002.jpg (GRAPHIC) — 387KB
• ex97-1_003.jpg (GRAPHIC) — 335KB
• ex97-1_004.jpg (GRAPHIC) — 109KB
• ex97-1_005.jpg (GRAPHIC) — 108KB
• ex19-1_001.jpg (GRAPHIC) — 336KB
• ex19-1_002.jpg (GRAPHIC) — 319KB
• ex19-1_003.jpg (GRAPHIC) — 314KB
• ex19-1_004.jpg (GRAPHIC) — 368KB
• ex19-1_005.jpg (GRAPHIC) — 312KB
• ex19-1_006.jpg (GRAPHIC) — 378KB
• ex19-1_007.jpg (GRAPHIC) — 391KB
• ex19-1_008.jpg (GRAPHIC) — 273KB
• 0001493152-24-012040.txt (&nbsp;) — 12906KB
• pw-20231231.xsd (EX-101.SCH) — 49KB
• pw-20231231_cal.xml (EX-101.CAL) — 72KB
• pw-20231231_def.xml (EX-101.DEF) — 225KB
• pw-20231231_lab.xml (EX-101.LAB) — 466KB
• pw-20231231_pre.xml (EX-101.PRE) — 352KB
• form10-k_htm.xml (XML) — 955KB

Business

Business 6 Item 1A.

Risk Factors

Risk Factors 15 Item 1B. Unresolved Staff Comments 42 Item 1C. Cybersecurity 42 Item 2.

Properties

Properties 43 Item 3.

Legal Proceedings

Legal Proceedings 47 Item 4. Mine Safety Disclosures 48 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6. [Reserved] 50 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 58 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 59 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 59 Item 9A.

Controls And Procedures

Controls And Procedures 59 Item 9B. Other Information 60 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 60 PART III Item 10. Directors, Executive Officers and Corporate Governance 60 Item 11.

Executive Compensation

Executive Compensation 65 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 67 Item 13. Certain Relationships and Related Transactions, and Director Independence 69 Item 14. Principal Accountant Fees and Services 70 PART IV Item 15. Exhibit and Financial Statement Schedules 70 Item 16. Form 10-K Summary 71

SIGNATURES

SIGNATURES 76 2 FORWARD-LOOKING This Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements by the use of words such as "believe," "expect," "will," "anticipate," "intend," "estimate," "would," "should," "project," "plan," "assume" or other similar words or expressions, or negatives of such words or expressions, although not all forward-looking statements can be identified in this way. All statements contained in this document regarding strategy, plans, future operations, projected financial condition or results of operations, prospects, the future of Power REIT's industries and markets, outcomes that might be obtained by pursuing management's plans and objectives, and similar subjects, are forward-looking statements. Over time, Power REIT's actual performance, results, financial condition and achievements may differ from the anticipated performance, results, financial condition and achievements that are expressed or implied by Power REIT's forward-looking All forward-looking statements reflect Power REIT's good-faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, Power REIT disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes. For a further discussion of factors that could cause Power REIT's future performance, results, financial condition or achievem

Risk Factors

Risk Factors The following is a summary of the risks relating to Power REIT. A more detailed description of each of the risks can be found below under the section captioned "Risk Factors". 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. We may need to raise additional capital or sell additional properties to fund our operations. 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. 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 may incur significant debt, which may subject us to restrictive covenants and increased risk of loss. Secured indebtedness exposes us to the possibility of foreclosure. If we are unable to comply with the covenants in our loan agreements, we might be adversely affected. Secured indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our investment in certain of our subsidiaries or in a property or group of properties or other assets subject to indebtedness. 3 Risks Related to our Operations We have a limited operating history and one of the industries in which we operate is in an industry in its very early stages of development. Our tenants have limited operating histories and may be more susceptible to payment and other lease defaults. Our tenants operate in a nascent industry that has experienced pricing gyrations which may impact their ability to pay rent. Our tenants may be unable to operate their businesses and default on their lease payments to us. Our business activities and the business activit

Properties

Properties 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) $ 9

Business

Business Strategy Our primary objective is to maximize the long-term value of the Trust for our shareholders. To that end, our business goals are to obtain the best possible rental income at our properties in order to maximize our cash flows, net operating income, funds from operations, funds available for distribution to shareholders and other operating measures and results, and ultimately to maximize the values of our properties. 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. 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. 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. Of the tot

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View this 10-K filing on SEC EDGAR