Power REIT (PW) risk factors, FY2025 10-K

Risks Related to our Financial Position and Liquidity

1. 01We have incurred a loss for the fiscal year ended December 31, 2025 and may be unable to generate sufficient revenue to cover expenses or generate net income62% rewritten
2. 02We may need to raise additional capital or sell additional properties to fund our operations in order to continue as a going concern86% rewritten
3. 03The 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 property expenses related to its greenhouse portfolioNew
4. 04If 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 assets66% rewritten
5. 05We have substantial debt and preferred shares outstanding with substantial liquidation preference, which could adversely affect our overall financial health and our operating flexibility34% rewritten
6. 06If we are unable to comply with the covenants in our loan agreements, we might be adversely affected21% rewritten
7. 07Secured 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
8. 08We are in arrears on property taxes for certain of the Greenhouse Portfolio properties, which exposes us to the possibility of foreclosureNew

Risks Related to our Operations

1. 09Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results
2. 10The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values could impact our business in the future
3. 11These conditions make it extremely difficult for us to accurately forecast and plan future business activities
4. 12○ manufacturing and supply chain disruptions for materials sourced from other geographies which may be experiencing shutdowns and shipping delays
5. 13Our greenhouse properties are related to a nascent industry resulting in payment and other lease defaults and a significant portion of the Greenhouse Portfolio is vacant which can result in a deterioration of valueNew
6. 14Our greenhouse tenants may be unable to renew or maintain their licenses and authorizations for their cannabis operations, which may result in such tenants not being able to operate their businesses and defaulting on their lease payments30% rewritten
7. 15Our 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
8. 16Even if we are able to execute our business strategy, that strategy may not be successful
9. 17We operate in a highly competitive market for investment opportunities and we may be unable to identify and complete acquisitions of real property assets
10. 18We acquired some of our properties, and expect to acquire other properties, “as-is” or otherwise with limited recourse to the prior owner, which significantly increases the risk of an investment
11. 19Because 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
12. 20The investment portfolio is, and in the future may continue to be, concentrated in its exposure to a relatively few numbers of investments, industries and lessees43% rewritten
13. 21Our property portfolio has a high concentration of properties located in certain states
14. 22Our operating results may be negatively affected by potential development and construction delays and cost overruns
15. 23A failure to maintain properties can lead to deterioration of value48% rewritten
16. 24We may not be able to timely sell our cannabis-related properties at attractive values, or at all, and the transition could adversely affect our results and financial conditionNew
17. 25The valuation and accounting treatment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, could result in future asset impairments, which would be recorded as operating losses
18. 26Many factors, including changes in interest rates and the negative perceptions of the cannabis sector generally, can have an adverse effect on the value of our assets, our access to debt financing and the trading price of our securities38% rewritten
19. 27Individual taxpayers might perceive REIT securities as less desirable relative to the securities of other corporations because of the lower tax rate on certain dividends from such corporations to the extent we pay dividends in the future, which might have an adverse effect on the market value of our securities32% rewritten
20. 28The 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. There is no limitation on our ability to issue securities senior to the Trust’s common shares or incur indebtedness
21. 29From time to time, our management team may own interests in our lessees or other counterparties, and may thereby have interests that conflict or appear to conflict with the Trust’s interests81% rewritten
22. 30Our 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
23. 31Some losses related to our real property assets may not be covered by insurance or indemnified by our lessees, and so could adversely affect us
24. 32Discovery of previously undetected environmentally hazardous conditions may adversely affect our operating results
25. 33Accordingly, 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
26. 34Legislative, regulatory, accounting or tax rules, and any changes to them or actions brought to enforce them, could adversely affect us
27. 35Our quarterly results may fluctuate23% rewritten
28. 36We may not be able to sell our real property assets when we desire. In particular, in order to maintain our status as a REIT, we may be forced to borrow funds or sell assets during unfavorable market conditions
29. 37If 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
30. 38Our failure to remain qualified as a REIT would subject us to U.S. federal income tax and applicable state and local taxes, which would reduce the amount of cash available for distribution to our stockholders and have significant adverse consequences on the market price of our common shares33% rewritten
31. 39If 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
32. 40Legislative, regulatory or administrative changes could adversely affect us or our stockholders
33. 41If we were deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on the price of our securities
34. 42Net leases may not result in fair market lease rates over time
35. 43If a sale-leaseback transaction is recharacterized in a lessee’s bankruptcy proceeding, our financial condition could be adversely affected
36. 44Provisions 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
37. 45Our business and operations would suffer in the event of system failures
38. 46We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks
39. 47We have identified material weaknesses in our internal controls, and we cannot provide assurances that these material weaknesses will be effectively remediated or that additional weaknesses will not occur in the future27% rewritten

Risks Related to our Investment Strategy

1. 48Each property in our portfolio could be considered a special purpose use asset which may impact market value and the ability to lease to generate income
2. 49Our focus on non-traditional real estate asset classes including CEA, alternative energy and transportation infrastructure sectors will subject us to more risks than if we were broadly diversified to include other asset classes
3. 50Renewable energy resources are complex, and our investments in them rely on long-term projections of resource and equipment availability and capital and operating costs; if our or our lessees’ projections are incorrect, we may suffer losses
4. 51Infrastructure assets may be subject to the risk of fluctuations in commodity prices and in the supply of and demand for infrastructure consumption
5. 52Infrastructure investments are subject to obsolescence risks
6. 53Renewable energy investments may be adversely affected by variations in weather patterns
7. 54Investments in renewable energy may be dependent on equipment or manufacturers that have limited operating histories or financial or other challenges
8. 55Our portfolio of marketable securities, is subject to market, interest and credit risk that may reduce its value23% rewritten

Risks Related to our Securities

1. 56There is a 9.9% limit on the amount of our equity securities that any one person or entity may own32% rewritten
2. 57We cannot assure you that our common shares and our Series A Preferred Stock will remain listed on the NYSE American66% rewritten
3. 58Low 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
4. 59Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our common shares could incur substantial losses
5. 60Our ability to issue preferred stock in the future could adversely affect the rights of existing holders of our equity securities
6. 61The issuance of additional equity securities may dilute existing equity holders
7. 62Our Series A Preferred Stock has not been rated and is junior to our existing and future debt, and the interests of holders of Series A Preferred Stock could be diluted by the issuance of additional parity-preferred securities and by other transactions
8. 63Holders of Series A Preferred Stock have limited voting rights
9. 64Dividends on our Series A Preferred Stock can be suspended and not paid on a current basis90% rewritten
10. 65We may issue additional Series A Preferred Stock at a discount to liquidation value or at a discount to the issuance value of shares of Series A Preferred Stock already issued82% rewritten
11. 66Ownership limitations may restrict change in control or business combination opportunities in which our stockholders might receive a premium for their shares20% rewritten
12. 67Our Series A Preferred Stock is subject to interest rate risk
13. 68Inflation may negatively affect the value of our Series A Preferred Stock and the dividends we pay

Risks Related to Regulation

1. 69The U.S. federal government’s approach towards cannabis laws may be subject to change or may not proceed as previously outlined67% rewritten
2. 70Laws, regulations and the policies with respect to the enforcement of such laws and regulations affecting the cannabis industry in the United States are constantly changing, and we cannot predict the impact that future regulations may have on us36% rewritten
3. 71We may be subject to anti-money laundering laws and regulations in the United States43% rewritten
4. 72Litigation, complaints, enforcement actions and governmental inquiries could have a material adverse effect on our business, financial condition and results of operations