CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this "Report") includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 as statements containing the words "believe," "expect," "will," "anticipate," "intend," "estimate," "project," "plan," "assume" or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words. All statements contained in this Report regarding our future strategy, future operations, projected financial position, estimated future revenues, projected costs, future prospects, the future of our industries and results that might be obtained by pursuing management's current or future plans and objectives are forward-looking statements. You should not place undue reliance on any forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control, including those identified below, under Part II, Item 1A. "Risk Factors" and elsewhere in this Report, and those identified under Part I, Item 1A of the 2020 10-K. Our forward-looking statements are based on the information currently available to us and speak only as of the date of the filing of this Report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these matters or how they may affect us. Over time, our actual results, performance, financial condition or achievements may differ from the anticipated results, performance, financial condition or achievements that are expressed or implied by our forward-looking statements, and such differences may be significant and materially adverse to our security holders. Our forward-looking statements contained herein speak only as of the date hereof, and we make no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
We are aMaryland-domiciled Real Estate Investment Trust (REIT) that owns a portfolio of real estate assets related to transportation, energy infrastructure and Controlled Environment Agriculture (CEA) inthe United States . We are focused on making new acquisitions of real estate within the CEA sector related to food and cannabis production. We are structured as a holding company and own our assets through twenty-two wholly-owned, special purpose subsidiaries that have been formed in order to hold real estate assets, obtain financing and generate lease revenue. We were formed as part of a reorganization and reverse triangular merger ofPittsburgh & West Virginia Railroad ("P&WV") that closed onDecember 2, 2011 . P&WV survived the reorganization as our wholly-owned subsidiary. Our investment strategy, which is focused on transportation, CEA and energy infrastructure-related real estate, builds upon P&WV's historical ownership of railroad real estate assets, which are currently triple-net leased toNorfolk Southern Railroad ("NSC"). We typically enter into long-term triple net leases where tenants are responsible for all ongoing costs related to the property, including insurance, taxes and maintenance. 16 Prior to 2019, our focus was on the acquisition of real estate assets related to transportation and energy infrastructure. In 2019 we expanded the focus of our real estate acquisitions to include CEA properties inthe United States . CEA is an innovative method of growing plants that involves creating optimized growing environments for a given crop indoors. We are currently focused on making new acquisitions of real estate within the CEA sector related to food and cannabis cultivation.
As ofJune 30, 2021 , our portfolio consisted of approximately 112 miles of railroad infrastructure and related real estate leased to a railway company which is owned by our subsidiary, P&WV, approximately 601 acres of fee simple land leased to a number of solar power generating projects with an aggregate generating capacity of approximately 108 MW and approximately 111 acres of land with approximately 533,000 square feet of existing or under construction greenhouses leased to sixteen regulated cannabis operators. We are actively seeking to grow our portfolio of CEA for food and cannabis production. During the six months endedJune 30, 2021 , we raised gross proceeds of approximately$36.7 million and issued an additional 1,383,394 common shares through a rights offering that closed onFebruary 5, 2021 . The offering commenced in December, 2020 whereby shareholders of record as ofDecember 28, 2020 could purchase one additional share at$26.50 per share for every share owned. Recent Developments
During the first six months endedJune 30, 2021 , we added to our portfolio of CEA properties by acquiring eight new properties and expanding one of the leases on a newly acquired property. OnJanuary 4, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE Grail, LLC , ("PW Grail"), we completed the acquisition of two properties totaling 4.41 acres of vacant land ("Grail Properties ") approved for medical cannabis cultivation in southernColorado for$150,000 plus acquisition costs. As part of the transaction, we agreed to fund the immediate construction of an approximately 21,732 square foot greenhouse and processing facility for approximately$1.69 million . Accordingly, PW Grail's total capital commitment is approximately$1.84 million . Concurrent with the acquisition, PW Grail entered into a 20-year "triple-net" lease (the "Grail Project Lease") withThe Grail Project LLC ("Grail Project ") which will operate a cannabis cultivation facility. The lease requiresGrail Project to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, theGrail Project's Lease provides four, five-year renewal options. The rent for the Grail Project Lease is structured whereby after a six-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 42nd month, rent is structured to provide a 12.9% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allColorado and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from theGrail Properties . The lease also has personal guarantees from the owners of theGrail Project . The Grail Project Lease is structured to provide an annual straight-line rent of approximately$350,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed byAugust 2021 . OnFebruary 23, 2021 , we amended the Grail Project Lease making approximately$518,000 of more funds available to construct an additional 6,256 square feet to the cannabis cultivation and processing space. Once completed, our total capital commitment will be approximately$2.4 million . As part of the agreement,PW Grail and Grail Project have amended the Lease ("Grail Amended Lease") whereby after an eight-month period, the additional rental payments provide PW Grail with a full return of its original invested capital over the next three years and thereafter, provide a 12.9% return increasing 3% per annum. The additional annual straight-line rent of approximately$105,000 represents an estimated yield on costs of over 18% over our investment. 17
OnJanuary 14, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE Apotheke, LLC , ("PW Apotheke"), we completed the acquisition of a property totaling 4.31 acres of vacant land ("Apotheke Property") approved for medical cannabis cultivation in southernColorado for$150,000 plus acquisition costs. As part of the transaction, we agreed to fund the immediate construction of an approximately 21,548 square foot greenhouse and processing facility for approximately$1.66 million . Accordingly, PW Apotheke's total capital commitment is approximately$1.81 million . Concurrent with the acquisition, PW Apotheke entered into a 20-year "triple-net" lease (the "Apotheke Lease") withDom F, LLC ("Dom F") which will operate a cannabis cultivation facility. The lease requires Dom F to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, the Apotheke Lease provides two, five-year renewal options. The rent for the Apotheke Lease is structured whereby after an eight-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 44th month, rent is structured to provide a 12.9% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allColorado and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from the Apotheke Property. The lease also has personal guarantees from the owners of Dom F. The Apotheke Lease is structured to provide an annual straight-line rent of approximately$342,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed by September, 2021. OnFebruary 3, 2021 , we acquired a property located inRiverside County, CA (the "Canndescent Property") through a newly formed wholly owned subsidiary ("PW Canndescent"). The purchase price was$7.685 million and we paid for the .85 acre property with$2.685 million cash on hand and the issuance of 192,308 shares ofPower REIT's Series A Preferred Stock. PW Canndescent received an assignment of a lease (the "Canndescent Lease") to allow the tenant ("Canndescent") to operate the 37,000 square foot greenhouse cultivation facility on the Canndescent Property. Canndescent is a premium flower brand for luxury cannabis inCalifornia . The Canndescent Lease requires Canndescent to pay all property related expenses including maintenance, insurance and taxes. The rent for the Canndescent Lease is structured to provide straight-line annual rent of approximately$1,074,000 .
The following table summarized the preliminary allocation of the purchase consideration for the Canndescent Property based on the relative fair values of the assets acquired:
Land$ 258,420 Assets Subject to Depreciation: Improvements (Greenhouses / Processing Facilities) 7,426,580 Acquisition Costs Capitalized 92,289 Total Assets Acquired$ 7,777,289 OnMarch 12, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE Gas Station, LLC , ("PW Gas Station "), we purchased a property totaling 2.2 acres of vacant land ("Gas Station Property") approved for medical cannabis cultivation in southernColorado for$85,000 plus acquisition costs. As part of the transaction, we agreed to fund the immediate construction of an approximately 24,512 square foot greenhouse and processing facility for approximately$2.03 million . Accordingly,PW Gas Station's total capital commitment is approximately$2.1 million . Concurrent with the acquisition, PW Gas Station entered into a 20-year "triple-net" lease (the "Gas Station Lease") withThe Gas Station, LLC ("Gas Station") which will operate a cannabis cultivation facility. The lease requires Gas Station to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, the Gas Station's Lease provides two, five-year renewal options. The rent for the Gas Station Lease is structured whereby after a seven-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 43rd month, rent is structured to provide a 12.9% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allColorado and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from the Gas Station Property. The lease also has personal guarantees from the owners of the Gas Station. The Gas Station Lease is structured to provide an annual straight-line rent of approximately$400,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed by December, 2021. 18 OnApril 20, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE Cloud Nine, LLC , ("PW Cloud Nine"), we purchased two properties totaling 4.0 acres of vacant land ("Cloud Nine Property") approved for medical cannabis cultivation in southernColorado for$300,000 plus acquisition costs. As part of the transaction, we agreed to fund the immediate construction of an approximately 38,440 square foot greenhouse and processing facility for approximately$2.65 million . Accordingly, PW Cloud Nine's total capital commitment is approximately$2.95 million . Concurrent with the acquisition, PW Cloud Nine entered into a 20-year "triple-net" lease (the "Cloud Nine Lease") withCloud Nine LLC ("Cloud Nine") which will operate a cannabis cultivation facility. The lease requires Cloud Nine to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, the Cloud Nine's Lease provides two, five-year renewal options. The rent for the Cloud Nine Lease is structured whereby after a seven-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 43rd month, rent is structured to provide a 13% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allColorado and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from the Cloud Nine Property. The lease also has personal guarantees from the owners of the Cloud Nine. The Cloud Nine Lease is structured to provide an annual straight-line rent of approximately$553,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed by December, 2021. OnMay 21, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE Walsenburg, LLC , ("PW Walsenburg"), we purchased a 35-acre property that includes four greenhouses plus processing/auxiliary facilities ("Walsenburg Property") approved for medical cannabis cultivation inHuerfano County, Colorado for$2.33 million plus acquisition costs. As part of the transaction, the Trust will fund approximately$1.6 million to upgrade the buildings and construct additional greenhouse space resulting in 102,800 square feet of greenhouse and related space. Accordingly, PW Walsenburg's total capital commitment is approximately$3.9 million . Concurrent with the acquisition, PWWalsenburg entered into a 20-year "triple-net" lease (the "Walsenburg Lease") withWalsenburg Cannabis LLC ("WC") which will operate a cannabis cultivation facility. The lease requires WC to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, theWalsenburg Lease provides two, five-year renewal options. The rent for the Walsenburg Lease is structured whereby after a sixth-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 42nd month, rent is structured to provide a 13% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allColorado and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from theWalsenburg Property. The lease also has personal guarantees from the owners of WC. The Walsenburg Lease is structured to provide an annual straight-line rent of approximately$729,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed by November, 2021.
The following table summarizes the allocation of the purchase consideration for the Walsenburg Property based on the relative fair values of the assets acquired:
Land$ 945,000 Construction in Progress 1,355,000 Acquisition Costs Capitalized 47,636 Total Assets Acquired$ 2,347,636 19 OnJune 11, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE Vinita, LLC , ("PW Vinita"), we purchased a 9.35-acre property that includes approximately 40,000 square feet of greenhouse space, 3,000 square feet of office space and 100,000 square feet of fully fenced outdoor growing space including hoop houses ("Vinita Property") approved for medical cannabis cultivation inCraig County, OK for$2.1 million plus acquisition costs. As part of the transaction, the Trust, agreed to fund$550,000 to upgrade the facilities. Accordingly, PW Vinita's total capital commitment is approximately$2.65 million . Concurrent with the acquisition, PW Vinita entered into a 20-year "triple-net" lease (the "Vinita Lease") withVinCann LLC ("VC LLC ") which will operate a cannabis cultivation facility. The lease requiresVC LLC to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, the Vinita Lease provides two, five-year renewal options. The rent for the Vinita Lease is structured whereby after a seven-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 43rd month, rent is structured to provide a 13% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allOklahoma and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from the Vinita Property. The lease also has personal guarantees from the owners ofVC LLC . The Vinita Lease is structured to provide an annual straight-line rent of approximately$503,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed by November, 2021. The following table summarizes the allocation of the purchase consideration for the Vinita Property based on the relative fair values of the assets acquired: Land$ 50,000 Construction in Progress 2,050,000 Acquisition Costs Capitalized 44,328 Total Assets Acquired$ 2,144,328 OnJune 18, 2021 , through a newly formed wholly owned subsidiary,PW CO CanRE JKL, LLC , ("PW JKL"), we purchased a property totaling 10 acres of vacant land ("JKL Property") approved for medical cannabis cultivation inOrdway, Colorado for$400,000 plus acquisition costs. As part of the transaction, the Trust agreed to fund the immediate construction of an approximately 12,000 square feet of greenhouse and 12,880 square feet of support buildings for approximately$2.5 million . Accordingly, PW JKL's total capital commitment is approximately$2.9 million . Concurrent with the acquisition, PW JKL entered into a 20-year "triple-net" lease (the "JKL Lease") withJKL2 Inc. ("JKL") which will operate a cannabis cultivation facility. The lease requires JKL to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, the JKL Lease provides two, five-year renewal options. The rent for the JKL Lease is structured whereby after an eighth-month free-rent period, the rental payments providePower REIT a full return of invested capital over the next three years in equal monthly payments. After the 43rd month, rent is structured to provide a 13% return of the original invested capital with increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return of the original invested capital and will increase at a 3% rate per annum on a starting date of the start of year seven. The lease requires the tenant to maintain a medical cannabis license and operate in accordance with allColorado and local regulations with respect to its operations. The lease prohibits the retail sale of the tenant's cannabis and cannabis-infused products from the JKL Property. The lease also has personal guarantees from the owners of JKL. The JKL Lease is structured to provide an annual straight-line rent of approximately$546,000 , representing an estimated yield on costs of over 18%. The project is currently under construction and should be completed by January, 2022. The acquisitions described above are accounted for as asset acquisitions under ASC 805-50, Business Combinations - Related Issues.Power REIT has established a depreciable life for the property improvements of 20 years for greenhouses
and up to 55 years for buildings. 20
The following table is a summary of the Trust's properties as of
Property Type/
112 miles Oct-64 99$ 915,000 $ 9,150,000 Solar Farm Land Salisbury, PWSS MA 54 5.7 Dec-11 22 89,494 1,005,538 Tulare PWTS County, CA 18 4.0 Mar-13 25 32,500 310,000 Tulare PWTS County, CA 18 4.0 Mar-13 25 37,500 310,000 Tulare PWTS County, CA 10 4.0 Mar-13 25 16,800 310,000 Tulare PWTS County, CA 10 4.0 Mar-13 25 29,900 310,000 Tulare PWTS County, CA 44 4.0 Mar-13 25 40,800 310,000 Kern County, PWRS CA 447 82.0 Apr-14 20 803,117 9,183,548 Solar Farm Land Total 601 107.7$ 1,050,111 $ 11,739,086 CEA (Cannabis) Property34 Crowley JAB - Tam Lot 18 County, CO 2.11 12,996 Jul-19 20 201,810 1,075,000 Crowley JAB - Mav Lot 1 County, CO 5.20 16,416 Jul-19 20 294,046 1,594,582 Crowley
Grassland - Mav Lot 14 County, CO 5.54 26,940 Feb-20
20 354,461 1,908,400 Crowley
Chronic - Sherman Lot 6 County, CO 5.00 26,416 Feb-20
20 375,159 1,995,101 Crowley Original - Mav Lot 5 County, CO 5.20 15,000 Apr-20 20 256,743 1,358,664 York County, Sweet Dirt 495 ME 3.06 35,600 May-20 20 919,849 4,917,134 York County, Sweet Dirt 505 ME 3.58 12,638 Sep-20 20 373,055 1,964,723 Crowley
Fifth Ace - Tam Lot 7 County, CO 4.32 18,000 Sep-20
20 261,963 1,364,585 Monte Fiore - Tam Lot Crowley 13 County, CO 2.37 9,384 Oct-20 20 87,964 425,000 Monte Fiore - Tam Lot Crowley 14 County, CO 2.09 24,360 Oct-20 20 490,700 2,637,300 Crowley
Green Mile - Tam Lot 19 County, CO 2.11 18,528 Dec-20
20 252,061 1,311,116 Grail Project - Tam Lot Crowley 4 & 5 County, CO 4.41 27,988 Jan-21 20 454,602 2,360,112 Crowley Apotheke - Tam Lot 8 County, CO 4.31 21,548 Jan-21 20 341,953 1,813,893 Riverside Canndescent County, CA 0.85 37,000 Feb-21 5 1,073,318 7,685,000 Crowley
Gas Station - Tam Lot 3 County, CO 2.20 24,512 Mar-21
20 399,748 2,118,717 Cloud Nine - Tam 27 & Crowley 28 County, CO 4.00 38,440 Apr-21 20 552,588 2,947,905 Huerfano
Walsenburg Cannabis County, CO 35.00 102,800 May-21
20 729,007 3,876,600 Craig VinCann County, OK 9.35 40,000 Jun-21 20 502,561 2,650,000 JKL2 - Sherm Lot 21 & Crowley 22 County, CO 10.00 24,880 Jun-21 20 546,392 2,928,293 CEA Total 110.7 533,446$ 8,467,980 $ 46,932,125 Grand Total$ 10,433,091 $ 67,821,211
1 Solar Farm Land size represents Megawatts and CEA property size represents square feet
2 Not including renewal options
3 Rent represents straight line net rent
4 Gross Book Value represents total commitment
Note: Size, Rent and Gross Book Value assume completion of approved construction
Critical Accounting Policies The consolidated financial statements are prepared in conformity withU.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results may differ from the original estimates, requiring adjustments to these balances in future periods. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are consistent with those described under Part II, Item 7
of the 2020 10-K. 21 Results of Operations
Three Months Ended
Revenue during the three months endedJune 30, 2021 , and 2020 was$2,267,848 and$975,122 respectively. Revenue during the three months endedJune 30, 2021 , consisted of revenue from lease income from direct financing lease of$228,750 , rental income of$2,035,098 and miscellaneous income of$4,000 . The increase in total revenue was primarily related to a$1,299,657 increase in rental income from newly acquired properties netted with a decrease in other income of$6,931 . Expenses for the three months endedJune 30, 2021 increased by$232,784 as compared to total expenses for the three months endedJune 30, 2020 primarily due to an increase in general and administrative expenses of$127,814 and an increase in depreciation expense of$116,903 . Net income attributable to Common Shares during the three months endedJune 30, 2021 and 2020 was approximately$1,376,493 and$409,695 , respectively. Net income attributable to common shares increased by$966,798 primarily due to the increase in rental income which was offset by an increase in depreciation expense and general and administrative expenses.
For the three months ended
Six Months Ended
Revenue during the six months endedJune 30, 2021 , and 2020 was$4,088,775 and$1,762,510 respectively. Revenue during the six months endedJune 30, 2021 , consisted of revenue from lease income from direct financing lease of$457,500 , rental income of$3,627,029 and miscellaneous income of$4,246 . The increase in total revenue was primarily related to a$2,388,386 increase in rental income from newly acquired properties netted with a decrease in other income of$62,121 . Expenses for the six months endedJune 30, 2021 , increased by$410,282 as compared to total expenses for the six months endedJune 30, 2020 , primarily due to an increase in general and administrative expenses of$142,008 and an increase in depreciation expense of$286,304 . Net income attributable to Common Shares during the six months endedJune 30, 2021 , and 2020 was approximately$2,321,411 and$591,724 , respectively. Net income attributable to common shares increased by$1,729,687 primarily due to the increase in rental income which was offset by an increase in depreciation expense and general and administrative expenses.
For the six months ended
Liquidity and Capital Resources
Our cash and cash equivalents totaled$28,829,442 as ofJune 30, 2021 , an increase of$23,227,616 fromDecember 31, 2020 . During the six months endedJune 30, 2021 , the increase of cash was primarily due to financing activity in the form of the rights offering that closed onFebruary 5, 2021 through which, we raised$36,501,796 , ($36,659,941 netted with offering expenses of$158,145 ), netted with a decrease of cash due to the acquisition of land and construction in progress payments.
With the cash available as of August, 2021, we believe these resources will be sufficient to fund our operations and commitments. Our cash outlays, other than acquisitions, property improvements, dividend payments and interest expense, are for general and administrative ("G&A") expenses, which consist principally of legal and other professional fees, consultant fees, NYSE American listing fees, insurance, shareholder service company fees and auditing costs. To meet our working capital and longer-term capital needs, we intend to rely on cash provided by our operating activities, proceeds received from the issuance of equity securities and proceeds received from borrowings, which are typically secured by liens on assets. Based on our leases in place and rental income as ofJune 30, 2021 , we anticipate generating$14,185,254 in cash rent over the next twelve months. AtJune 30, 2021 , we owed debt in the principal amount of$24,148,183 , of which$656,427 is due in the next twelve months. We anticipate that our cash from operations will be sufficient to support our operations; however additional acquisition of real estate may require us to seek to raise additional financing. There can be no assurance that financing will be available when needed on favorable terms. 22
FUNDS FROM OPERATIONS - NON GAAP FINANCIAL MEASURES
We assess and measure our overall operating results based upon an industry performance measure referred to as Core Funds From Operations ("Core FFO") which management believes is a useful indicator of our operating performance. Core FFO is a non-GAAP financial measure. Core FFO should not be construed as a substitute for net income (loss) (as determined in accordance with GAAP) for the purpose of analyzing our operating performance or financial position, as Core FFO is not defined by GAAP. The following is a definition of this measure, an explanation as to why we present it and, at the end of this section, a reconciliation of Core FFO to the most directly comparable GAAP financial measure. 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 theNational Association of Real Estate Investment Trusts ("NAREIT"), include certain financial items that are not indicative of the results provided by our asset portfolio and inappropriately affect the comparability of the Trust's period-over-period performance. These items include non-recurring expenses, such as 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. Therefore, management uses Core FFO and defines it as net income excluding such items. We believe that Core FFO is a useful supplemental measure for the investing community to employ, including when comparing us to other REITs that disclose similarly Core FFO figures, and when analyzing changes in our performance over time. Readers are cautioned that other REITs may use different adjustments to their GAAP financial measures than we use, and that as a result, our 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.
A reconciliation of our Core FFO to net income for the three months ended
CORE FUNDS FROM OPERATIONS (FFO) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Revenue$ 2,267,848 $ 975,122 $ 4,088,775 $ 1,762,510 Net Income$ 1,539,695 $ 479,753 $ 2,647,823 $ 731,840 Stock-Based Compensation 86,815 48,133 152,973 123,291 Interest Expense - Amortization of Debt Costs 8,528 8,528 17,055 17,055 Amortization of Intangible Asset 59,286 59,284 118,571 118,569 Depreciation on Land Improvements 146,515 29,612 342,566 56,262 Core FFO Available to Preferred and Common Stock 1,840,839 625,310 3,278,988 1,047,017 Preferred Stock Dividends (163,202 ) (70,058 ) (326,412 ) (140,116 ) Core FFO Available to Common Shares$ 1,677,637 $ 555,252 $ 2,952,576 $ 906,901 Weighted Average Shares Outstanding (basic) 3,312,001 1,912,939 3,033,751 1,906,126 Core FFO per Common Share 0.51 0.29 0.97 0.48 Growth Rates: Revenue 133 % 132 % Net Income 221 % 262 % Core FFO Available to Common Shareholders 202 % 226 % Core FFO per Common Share 76 % 102 % 23
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