Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 25, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Power REIT | ||
Entity Central Index Key | 0001532619 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,731,000 | ||
Entity Common Stock, Shares Outstanding | 1,912,939 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Land | $ 6,928,644 | $ 6,788,067 |
Greenhouse cultivation facilities, net of accumulated depreciation | 1,619,687 | |
Net investment in direct financing lease - railroad | 9,150,000 | 9,150,000 |
Total real estate assets | 17,698,331 | 15,938,067 |
Cash and cash equivalents | 15,842,504 | 1,771,011 |
Prepaid expenses | 14,626 | 16,795 |
Intangible assets, net of accumulated amortization | 3,589,453 | 3,826,595 |
Deferred rent receivable | 546,187 | 325,968 |
Other assets | 16,700 | 16,700 |
TOTAL ASSETS | 37,707,801 | 21,895,136 |
LIABILITIES AND EQUITY | ||
Deferred revenue | 29,342 | 32,851 |
Security deposit | 114,378 | |
Accounts payable | 54,993 | 24,828 |
Accounts payable - Related party | 1,374 | |
Accrued interest | 84,313 | 87,846 |
Current portion of long-term debt, net of unamortized discount | 564,682 | 389,996 |
Long-term debt, net of unamortized discount | 23,797,191 | 9,167,336 |
TOTAL LIABILITIES | 24,644,899 | 9,704,231 |
Series A 7.75% Cumulative Redeemable Perpetual Preferred Stock Par Value $25.00 (175,000 shares authorized; 144,636 issued and outstanding as of December 31, 2019 and December 31, 2018) | 3,492,149 | 3,492,149 |
Commitments and Contingencies | ||
Equity: | ||
Common Shares, $0.001 par value (100,000,000 shares authorized; 1,872,939 shares issued and outstanding at December 31, 2019 and 1,870,139 at December 31, 2018) | 1,873 | 1,870 |
Additional paid-in capital | 11,821,486 | 11,616,154 |
Accumulated deficit | (2,252,606) | (2,919,268) |
Total Equity | 9,570,753 | 8,698,756 |
TOTAL LIABILITIES AND EQUITY | $ 37,707,801 | $ 21,895,136 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Series A 7.75% Cumulative redeemable perpetual preferred stock cumulative redeemable percentage | 7.75% | 7.75% |
Series A 7.75% Cumulative redeemable perpetual preferred stock, par value | $ 25 | $ 25 |
Series A 7.75% Cumulative redeemable perpetual preferred stock, shares authorized | 175,000 | 175,000 |
Series A 7.75% Cumulative redeemable perpetual preferred stock, shares issued | 144,636 | 144,636 |
Series A 7.75% Cumulative redeemable perpetual preferred stock, shares outstanding | 144,636 | 144,636 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 1,872,939 | 1,870,139 |
Common stock, shares outstanding | 1,872,939 | 1,870,139 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUE | ||
Lease income from direct financing lease - railroad | $ 915,000 | $ 915,000 |
Rental income | 1,232,359 | 1,050,110 |
Misc. income | 33,539 | 9,513 |
TOTAL REVENUE | 2,180,898 | 1,974,623 |
EXPENSES | ||
Amortization of intangible assets | 237,142 | 237,142 |
General and administrative | 408,505 | 398,443 |
Property tax | 22,188 | 22,012 |
Depreciation Expense | 38,757 | |
Interest expense | 527,412 | 478,215 |
TOTAL EXPENSES | 1,234,004 | 1,135,812 |
NET INCOME | 946,894 | 838,811 |
Preferred Stock Dividends | (280,232) | (280,232) |
NET INCOME ATTRIBUTABLE TO COMMON SHARES | $ 666,662 | $ 558,579 |
Income Per Common Share: | ||
Basic and diluted | $ 0.36 | $ 0.30 |
Weighted Average Number of Shares Outstanding: | ||
Basic | 1,871,554 | 1,848,739 |
Diluted | 1,871,554 | 1,848,739 |
Cash dividend per Series A Preferred Share | $ 1.94 | $ 1.94 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,827 | $ 11,393,476 | $ (3,477,847) | $ 7,917,456 |
Balance, shares at Dec. 31, 2017 | 1,827,338 | |||
Net Income | 838,811 | 838,811 | ||
Cash Dividends on Preferred Stock | (280,232) | (280,232) | ||
Stock-Based Compensation | $ 43 | 222,678 | 222,721 | |
Stock-Based Compensation, shares | 42,801 | |||
Balance at Dec. 31, 2018 | $ 1,870 | 11,616,154 | (2,919,268) | 8,698,756 |
Balance, shares at Dec. 31, 2018 | 1,870,139 | |||
Net Income | 946,894 | 946,894 | ||
Cash Dividends on Preferred Stock | (280,232) | (280,232) | ||
Stock-Based Compensation | $ 3 | 205,332 | 205,335 | |
Stock-Based Compensation, shares | 2,800 | |||
Balance at Dec. 31, 2019 | $ 1,873 | $ 11,821,486 | $ (2,252,606) | $ 9,570,753 |
Balance, shares at Dec. 31, 2019 | 1,872,939 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | ||
Net Income | $ 946,894 | $ 838,811 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of intangible assets | 237,142 | 237,142 |
Amortization of debt costs | 26,062 | 25,191 |
Stock-based compensation | 205,335 | 222,721 |
Depreciation | 38,757 | |
Changes in operating assets and liabilities | ||
Accounts payable, related party | (1,374) | 198 |
Deferred rent receivable | (220,219) | (45,501) |
Prepaid expenses | 2,169 | (2,617) |
Accounts payable | 30,165 | 3,622 |
Security deposit | 114,378 | |
Accrued interest | (3,533) | (3,683) |
Deferred revenue | (3,509) | (9,924) |
Net cash provided by operating activities | 1,372,267 | 1,265,960 |
Investing activities | ||
Cash paid for land and land improvements | (1,799,021) | |
Net cash used in investing activities | (1,799,021) | |
Financing Activities | ||
Proceeds from long-term debt | 15,500,000 | |
Principal payment on long-term debt | (409,309) | (361,447) |
Payments of debt issuance costs | (312,212) | |
Cash dividends paid on preferred stock | (280,232) | (280,232) |
Net cash used in financing activities | 14,498,247 | (641,679) |
Net increase in cash and cash equivalents | 14,071,493 | 624,281 |
Cash and cash equivalents, beginning of period | 1,771,011 | 1,146,730 |
Cash and cash equivalents, end of period | 15,842,504 | 1,771,011 |
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 504,883 | $ 447,026 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Power REIT (the “Registrant” or the “Trust”, and together with its consolidated subsidiaries, “we”, “us”, the “Company” or “Power REIT”, unless the context requires otherwise) is a Maryland-domiciled real estate investment trust (a “REIT”) that holds real estate assets related to transportation, alternative energy infrastructure and Controlled Environment Agriculture (CEA) in the United States. The Trust is structured as a holding company and owns its assets through seven 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, 2019, 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 601 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 108 Megawatts (“MW”) and approximately 7.3 acres of land with 18,612 sf of greenhouses leased to a medical cannabis operator. Power REIT is actively seeking to grow its portfolio of real estate related to CEA for food and cannabis production. P&WV is a business trust organized under the laws of Pennsylvania for the purpose of owning railroad assets that are currently leased to Norfolk Southern Railway (“NSC”) pursuant to a 99-year lease that became effective in 1964 and is subject to an unlimited number of 99-year renewal periods under the same terms and conditions, including annual rent payments, at the option of NSC (the “Railroad Lease”). P&WV’s assets consist of a railroad line of approximately 112 miles in length, extending through Connellsville, Washington and Allegheny Counties in the Commonwealth of Pennsylvania, through Brooke County in the State of West Virginia and through Jefferson and Harrison Counties in the State of Ohio, to Pittsburgh Junction in Harrison County, Ohio. There are also branch lines that total approximately 20 miles in length located in Washington and Allegheny Counties in Pennsylvania and Brooke County in West Virginia. NSC pays P&WV base cash rent of $915,000 per year, payable in quarterly installments. In addition, Power P&WV believes NSC is obligated to pay additional rent and other amounts, which was the subject of litigation. (See Item 3, Legal Proceedings). PW Salisbury Solar, LLC (“PWSS”) is a Massachusetts limited liability company that owns approximately 54 acres of land located in Salisbury, Massachusetts that is leased to a 5.7 MW utility scale solar farm. Pursuant to the lease agreement, PWSS’ tenant is required to pay PWSS rent of $80,800 cash for the year December 1, 2012 to November 30, 2013, with a 1.0% escalation in each corresponding year thereafter. Rent is payable quarterly in advance and is recorded by Power REIT for accounting purposes on a straight-line basis. For each of the twelve months ended December 31, 2019 and 2018 rent has been recorded in the amount of $89,494. At the end of the 22-year lease period, which commenced on December 1, 2011 (prior to being assumed by PWSS), the tenant has certain renewal options, with terms to be mutually agreed upon. PW Tulare Solar, LLC (“PWTS”) is a California limited liability company that owns approximately 100 acres of land leased to five (5) utility scale solar farms, with an aggregate generating capacity of approximately 20MW, located near Fresno, California. The solar farm tenants pay PWTS an aggregate annual rent of $157,500 cash, payable in advance and without escalation during the 25-year term of the leases. At the end of the 25-year terms, which commenced in March 2013 (prior to being assumed by PWTS), the tenants have certain renewal options, with terms to be mutually agreed upon. For each of the years ended December 31, 2019 and 2018, PWTS recorded rental income of $157,500. PW Regulus Solar, LLC (“PWRS”) is a California limited liability company that owns approximately 447 acres of land leased to a utility scale solar farm with an aggregate generating capacity of approximately 82 Megawatts in Kern County, California near Bakersfield. PWRS’s lease was structured to provide it with initial quarterly rental payments until the solar farm achieved commercial operation which occurred on November 11, 2014. During the primary term of the lease which extends for 20 years from achieving commercial operations, PWRS receives an initial annual rent of approximately $735,000 per annum which grows at 1% per annum. The lease is a “triple net” lease with all expenses to be paid by the tenant. At the end of the primary term of the lease, the tenants have certain renewal options with rent calculated as the greater of a minimum stated rental amount or a percentage of the total project-level gross revenue. The acquisition price, not including transaction and closing costs, was approximately $9.2 million. For each of the twelve months ended December 31, 2019 and 2018, PWRS recorded rental income of $803,116. PW CO CanRE JAB LLC (“PW JAB”) is a wholly owned subsidiary of a new formed wholly owned subsidiary of the Trust. In July 2019, PW JAB acquired two properties (the “JAB Properties”) in southern Colorado that have approximately 7.3 acres with 18,612 square feet of greenhouse cultivation and processing space. PW JAB has entered into two cross-collateralized and cross-defaulted triple-net leases with JAB Industries Ltd. for the JAB Properties. The leases provide that tenant is responsible for paying all expenses related to the JAB Properties, including maintenance expenses, insurance and taxes. The term of each of the leases is 20 years and provides two options to extend for additional five-year periods. For the twelve months ended December 31, 2019, PW JAB recorded rental income from the JAB Properties of $182,249. The leases also have financial guarantees from affiliates of the tenant. The tenant intends to operate the JAB Properties as licensed cannabis cultivation and processing facilities. The rent for each of the leases is structured whereby after a six-month free-rent period, the rental payments provide the Trust 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 12.5% return on the original invested capital amount which will increase at a 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be adjusted down to an amount equal to a 9% return on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven. The tenant is an affiliate of a company that owns and operates two indoor cannabis cultivation facilities and five dispensary locations in the State of Colorado along with several other cannabis related projects under development. The leases require the tenant to maintain a medical cannabis license and operate in accordance with all Colorado and local regulations with respect to its operations. The leases prohibit the retail sale of the tenant’s cannabis and cannabis-infused products from the JAB Properties. The Company’s revenue is highly concentrated, with lease payments from the lessee of P&WV and PWRS assets representing approximately 42% and 37%, respectively, of the Company’s consolidated revenues for the year ended December 31, 2019. Power REIT has elected to be treated for tax purposes as a REIT, which means that it is exempt from U.S. federal income tax if a sufficient portion of its annual income is distributed to its shareholders, and if certain other requirements are met. In order for Power REIT to maintain its REIT qualification, at least 90% of its ordinary taxable annual income must be distributed to shareholders. Basis of Presentation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Recent Accounting Pronouncements In February 2016, the FASB issued ASU No 2016-02 “Leases” (Topic 842). The standard requires companies that lease valuable assets like aircraft, real estate, and heavy equipment to recognize on their balance sheets the assets and liabilities generated by contracts longer than a year. The standard also requires companies to disclose in the footnotes to their financial statements information about the amount, timing, and uncertainty for the payments they make for the lease agreements. This standard is effective for fiscal years and interim periods beginning after December 15, 2018, and the Company adopted the standard using the modified retrospective approach effective January 1, 2019. The lessor accounting model under ASC 842 is similar to existing guidance, however, it limits the capitalization of initial direct leasing costs, such as internally generated costs. The Company elected all practical expedients permitted under ASC 842, other than the hindsight practical expedient. Accordingly, the Company will retain distinction between a finance lease (i.e., capital leases under existing guidance) and an operating lease and account for its existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain a lease under ASC 842, (b) whether classification of the operating leases would be different in accordance with ASC 842 or (c) whether the unamortized initial direct costs before transition adjustments would have met the definition of initial direct costs in ASC 842 at lease commencement. The Company does not have a cumulative effect adjustment to retained earnings upon adoption. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718),” which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. The adoption of ASU 2018-07 on January 1, 2019 did not have a significant impact on our Consolidated Financial Statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Principles of Consolidation The accompanying consolidated financial statements include Power REIT and its wholly-owned subsidiaries. All intercompany balances have been eliminated in consolidation. Cash and Cash Equivalents The Trust considers all highly liquid investments with original maturity of three months or less to be cash equivalents. Revenue Recognition The Railroad Lease is treated as a direct financing lease, and income to P&WV under the Railroad Lease is recognized as earned based on an implicit rate of 10% over the life of the lease, which is assumed to be perpetual for the purposes of revenue recognition and recording the leased assets on the consolidated balance sheets. Lease revenue from solar land and greenhouse properties that are subject to an operating lease with rent escalation provisions are recorded on a straight-line basis when the amount of escalation in lease payments is known at the time Power REIT enters into the lease agreement, or known at the time Power REIT assumes an existing lease agreement as part of an acquisition (e.g., an annual fixed percentage escalation). Lease revenue from land that is subject to an operating lease without rent escalation provisions is recorded on a straight-line basis. Intangibles A portion of the acquisition price of the assets acquired by PWTS have been allocated on The Trust’s consolidated balance sheets between Land and Intangibles’ fair values at the date of acquisition. The total amount of intangibles established was approximately $237,000, which will be amortized over a 24.6-year period. For each of the twelve months ended December 31, 2019 and 2018, approximately $10,000 of the intangibles was amortized. A portion of the acquisition price of the assets acquired by PWRS have been allocated on The Trust’s consolidated balance sheets between Land and Intangibles’ fair values at the date of acquisition. The total amount of intangibles established was approximately $4,714,000, which is amortized over a 20.7-year period. For each of the twelve months ended December 31, 2019 and 2018, approximately $227,000 of the intangibles was amortized. Intangible assets are evaluated whenever events or circumstances indicate the carrying value of these assets may not be recoverable. There were no impairment charges recorded for the years ended December 31, 2019 and 2018. The following table provides a summary of the Intangible Assets: December 31, 2019 December 31, 2018 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Intangibles - PWTS $ 237,471 $ 62,389 $ 175,082 $ 237,471 $ 52,737 $ 184,734 Intangibles - PWRS 4,713,548 1,299,177 3,414,371 4,713,548 1,071,687 3,641,861 Total $ 4,951,019 $ 1,361,566 $ 3,589,453 $ 4,951,019 $ 1,124,424 $ 3,826,595 The following table provides a summary of the current estimate of future amortization of Intangible Assets: 2020 $ 237,141 2021 237,141 2022 237,141 2023 237,141 2024 237,141 Thereafter 2,403,748 Total $ 3,589,453 Land Land is carried at cost. Upon the acquisition of land, management assesses the fair value of acquired assets (including land, improvements and identified intangibles such as above- and below-market leases and acquired in-place leases) and acquired and assumed liabilities (if any), and allocates the acquisition price based on these assessments. Newly acquired investments in land without in-place leases are recorded at cost (including costs related to the acquisition of the land). Net Investment in Direct Financing Lease – Railroad P&WV’s net investment in its leased railroad property, recognizing the lessee’s perpetual renewal options, was estimated to have a current value of $9,150,000, assuming an implicit interest rate of 10%. Fair Value Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Trust measures its financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. ○ Level 1 – valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds. ○ Level 2 – valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third party pricing services for identical or comparable assets or liabilities. ○ Level 3 – valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. In determining fair value, the Trust utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk. The carrying amounts of Power REIT’s financial instruments, including cash and cash equivalents, prepaid expenses, and accounts payable approximate fair value because of their relatively short-term maturities. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. There are no financial assets and liabilities carried at fair value on a recurring basis as of December 31, 2019 and 2018. Earnings Per Common Share Basic earnings per share of common stock is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net earnings per share of common stock is computed by dividing net income attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding plus any potential dilutive shares for the period. For the years ended December 31, 2019 and 2018, the Company determined that there were no dilutive common shares, accordingly, basic and diluted earnings per share were the same. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | 2 – CONCENTRATIONS The Company’s revenue is highly concentrated, with lease payments from the lessee of P&WV and PWRS assets representing approximately 42% and 37%, respectively, of the Company’s consolidated revenues for the year ended December 31, 2019. PWV’s tenant is NSC which is a Class I railroad and, as reported in its Form 10-K filed with the SEC on February 6, 2020, had approximately $15.2 billion of total stockholders’ equity as of December 31, 2019, and earned approximately $2.7 billion of net income during its fiscal year ended December 31, 2019. Power REIT places its cash and cash equivalents with a single, high-credit quality financial institution; however amounts are not insured or guaranteed by the FDIC. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 3 – ACQUISITIONS On July 12, 2019, through two new wholly owned subsidiaries, PW CanRe of Co. Holdings, LLC and PW CO CanRE JAB, LLC, Power REIT completed the acquisition of two greenhouse properties in southern Colorado. One property was acquired for $1,075,000, is 2.11 acres and has an existing greenhouse and processing facility totaling 12,996 square feet. The other property was acquired for $695,000, is 5.2 acres and has an existing greenhouse and processing facility totaling 5,616 square feet. The total combined purchase price of $1,770,000 plus acquisition expenses of $29,021 was paid with existing working capital. The acquisitions are accounted for as asset acquisitions under ASC 805-50. Power REIT has established a depreciable life for the greenhouses of 20 years. The Company recognized depreciation expense of approximately $38,800 related to the greenhouses for the twelve months ended December 31, 2019. Concurrent with the closing on the acquisitions, Power REIT entered into leases with a tenant that is licensed for the production of medical marijuana at the facilities The combined straight-line annual rent is approximately $331,000 although the rental payments are accelerated such that Power REIT will receive a full return of capital over the first 42 months of the lease. The tenant is responsible for paying all expenses related to the properties including maintenance, insurance and taxes. The term of each of the leases is 20 years and provides two options to extend for additional five-year periods. The leases also have financial guarantees from affiliates of the tenant. The following table summarizes the allocation of the purchase consideration based on the fair values of the assets acquired: Land $ 140,577 Assets subject to depreciation: Improvements (greenhouses) 1,658,444 Total Assets Acquired $ 1,799,021 |
Direct Financing Leases and Ope
Direct Financing Leases and Operating Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Direct Financing Leases and Operating Leases | 4 – DIRECT FINANCING LEASES AND OPERATING LEASES Direct Financing Leases The Railroad Lease provides for a base cash rental of $915,000 per annum, payable quarterly, for the current 99-year lease period. The leased properties are maintained entirely at the lessee’s expense. Under the terms of the Railroad Lease, which became effective October 16, 1964, NSC (formerly Norfolk and Western Railway Company) leased all of P&WV’s real properties, including its railroad lines, for a term of 99 years, renewable by the lessee upon the same terms for additional 99-year terms in perpetuity. Prior to 1983, the Railroad Lease was accounted for as an operating lease in accordance with the Financial Accounting Standards Board [FASB] ASC 840, Leases The Railroad Lease may be terminated by the lessee at the expiration of the initial term or any renewal term, or by default of NSC. In the event of termination, NSC is obligated to return to P&WV all properties covered by the Railroad Lease, together with sufficient cash and other assets to permit operation of the railroad for a period of one year. In addition, NSC would be obligated upon default or termination, to the extent NSC has not previously paid indebtedness due to P&WV, to settle remaining indebtedness owed to P&WV. The existing indebtedness owed to P&WV, including the ability of P&WV to make an immediate demand for payment of such amounts, was part of the subject of a multi-year litigation which concluded in 2017. See 10, Legal Proceedings. P&WV has determined that the lease term is perpetual (for GAAP accounting purposes only) because it is perceived that it would be un-economic for the lessee to terminate and the Lessee has control over its actions with respect to default and has unlimited renewal options. Accordingly, as of January 1, 1983, the rentals receivable of $915,000 per annum, recognizing renewal options by the lessee in perpetuity, were estimated to have a present value of $9,150,000, assuming an implicit interest rate of 10% as of the date FASB ASC 840 and 842 was implemented. The Company has evaluated their long-lived assets for impairment and concluded there are no impairment indicators as of December 31, 2019. Operating Leases PWSS’ land is subject to a lease agreement with a special purpose entity that owns a solar farm with an original 22-year initial term with two five-year extension options on economic terms to be mutually agreed to between PWSS and the lessee. The lease commenced on December 1, 2011 and has approximately twenty years left on the initial term. The initial term is due to expire December 1, 2033, with two five-year extension options at the lessee’s option at fair market rates to be mutually determined. PWSS assumed the existing lease upon its acquisition of the Salisbury land. Pursuant to the lease, the lessee will pay PWSS $80,800 of annual cash rent during December 1, 2012 to November 30, 2013. Rent is paid quarterly in advance with a 1.0% annual escalation. Rent from the lease will be recorded on a straight-line basis, with $89,494 recorded during the years ended December 31, 2019 and 2018. PWTS’ land is subject to lease agreements with special purpose entities that own solar farms with an original 25-year initial term (the “PWTS Leases”). The PWTS Leases include two five-year extension options on economic terms to be mutually agreed to between PWTS and the lessees. The PWTS Leases commenced in March 2013 (prior to being assumed by PWTS). PWTS assumed the existing PWTS Leases upon its acquisition of the Tulare land. Pursuant to the PWTS Leases, the lessee will pay PWTS $157,500 of annual cash rent paid annually in advance in March of each. A total of $157,500 of rent paid to PWTS was recorded for the twelve months ended December 31, 2019 and 2018. PWRS’ land is subject to a lease agreement with a special purpose entity that owns a solar farms with an initial term that expires 20 years from the project commencing operations which occurred on November 11, 2014 (the “PWRS Lease”). At the end of the initial lease term, the tenant has certain renewal options, with rent calculated as the greater of a minimum stated rental amount or a percentage of the total project-level gross revenues. Pursuant to the PWTS Leases, the lessee will pay PWTS $735,000 in its first year after achieving commercial operations which grows at 1% per annum on a “triple net” basis with all expenses to be paid by the tenant. Rent from the lease will be recorded on a straight-line basis, with $803,116 recorded for each of the twelve months ended December 31, 2019 and 2018. PW JAB’s lands and greenhouses are subject to two cross collateralized and cross- defaulted lease agreements with a special purpose entity that is licensed for the production of medical cannabis at the facilities. The leases commenced on July 12, 2019 and the initial combined straight-line annual rent is approximately $331,000 although the rental payments are accelerated such that Power REIT will receive a full return of capital over the first 42 months of the leases. The term of each lease is 20 years and provides two options to extend for additional five-year periods. The leases also have financial guarantees from affiliates of the tenant. On November 1, 2019, PW JAB and its tenant agreed to expand the greenhouse at one of the two properties by 10,800 square feet with Power REIT funding $899,582 for the expansion. As part of the transaction the Lease was amended to increase the rent whereby after a six-month period, the additional rental payments provide PW JAB with a full return of its invested capital related to the expansion over the next three years in equal monthly payments. Thereafter, rent is structured to provide a 12.5% return on the original invested capital amount which will increase at a 3% rate per annum. At any time after year six of the Lease, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven. The additional straight-line annual rent related to the expansion is approximately $165,000. The leases provide that Tenant is responsible for paying all expenses related to the JAB Properties, including maintenance expenses, insurance and taxes. Rent on the leases is recorded by the Trust for accounting purposes on a straight-line basis, with $182,249 having been recorded during the fiscal year ended December 31, 2019. The following is a schedule by years of minimum future rentals on non-cancelable operating leases as of December 31, 2019: Total 2020 1,803,960 2021 1,938,841 2022 1,947,478 2023 1,465,020 2024 1,404,177 Thereafter 17,803,927 Total 26,363,403 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5 – LONG-TERM DEBT On November 6, 2015, PWRS borrowed $10,150,000 pursuant to a bond offering (the “PWRS Bonds”). The PWRS Bonds PWRS Bonds are secured by land and intangibles owned by PWRS and have a total obligation of $10,150,000. The PWRS Bonds carry a fixed annual interest rate of 4.34% and matures in 2034. During 2015, the Trust capitalized approximately $441,000 of expenses related to the PWRS Bonds of which approximately $97,000 was paid in cash and approximately 344,000 was incurred through issuance of debt. This amount is amortized over the life of the PWRS Bonds. As of December 31, 2019 and 2018, the balance of the PWRS Bonds was approximately $8,538,000 (net of unamortized debt costs of approximately $325,000) and $8,870,000 (net of unamortized debt costs of approximately $348,000), respectively. On July 5, 2013, PWSS borrowed $750,000 from a regional bank (the “PWSS Term Loan”) to refinance a bridge loan that had been extended by HBP in connection with PWSS’ acquisition of leased property in December 2012. The PWSS Term Loan carries a fixed interest rate of 5.0%, a term of 10-years and amortizes based on a twenty-year principal amortization schedule. In addition to being secured by PWSS’ real estate assets, the term loan is secured by a parent guarantee from the Trust. The balance of the PWSS Term Loan as of December 31, 2019 and December 31, 2018 is approximately $579,000 (net of approximately $9,500 of capitalized debt costs which are being amortized over the life of the financing) and $605,000 (net of approximately $12,000 of capitalized debt costs which are being amortized over the life of the financing), respectively. On December 31, 2012, as part of the Salisbury land acquisition, PWSS assumed existing municipal financing (“Municipal Debt”). The Municipal Debt has approximately 12 years remaining. The Municipal Debt has a simple interest rate of 5.0% that is paid annually, with the next payment due February 1, 2019. The balance of the Municipal Debt as of December 31, 2019 and 2018 is approximately $77,000 and $83,000respectively. On November 25, 2019, Power REIT, through a newly formed wholly owned subsidiary, completed a financing that is intended to provide capital for acquisition of additional properties on an accretive basis. The financing is in the form of long-term fixed rate bonds with gross proceeds of $15,500,000. The bonds carry a fixed interest rate of 4.62% and fully amortize over the life of the financing which matures in 2054 (35 years). The bonds are fully secured by the equity interest in Power REIT’s wholly owned subsidiary – PWV. The total debt issuance costs which will be amortized over the life of the financing is approximately $312,200. The balance of the loan as of December 31, 2019 is $15,168,600 (net of approximately $311,000 of capitalized debt costs). The approximate amount of principal payments remaining on Power REIT’s long-term debt as of December 31, 2019 is described below: Total Debt 2020 598,256 2021 635,517 2022 675,390 2023 1,167,971 2024 715,778 Thereafter 21,215,114 Long term debt 25,008,026 |
Long-Term Compensation
Long-Term Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Long-Term Compensation | 6 – LONG-TERM COMPENSATION The Trust grants awards pursuant to its 2012 Equity Incentive Plan (“Plan”), which was approved at the Trust’s 2012 annual shareholder meeting. The Plan provides for grants of stock options, restricted stock, stock appreciation rights (“SARs”) and other equity incentive awards to employees, officers and other persons providing services to the Trust and its subsidiaries, including outside directors. Compensation may be awarded under the Plan until it is terminated or until the ten-year anniversary of the Plan. The initial number of shares of stock available for issuance under the Plan was 200,000 shares. The Plan contains an “evergreen” provision that automatically adjusts the number of shares available for future issuance, as provided in Section 4 of the Plan (subject to certain adjustments) as follows: “the number of shares of Stock which shall be made available for issuance under the Plan shall be increased by the positive number of shares equal to the lesser of: (i) (A) 10% of the Company’s outstanding shares of Stock, calculated on a fully diluted and consolidated basis (including the OP Units of our Operating Partnership, if any), less (B) the sum of (1) the aggregate number of shares remaining available for issuance under the Plan as of such date, plus (2) the aggregate number of shares subject to outstanding Awards and unvested shares of Restricted Stock or other unvested equity compensation granted under the Plan as of such date, or (ii) a lesser amount determined by the Compensation Committee. For clarity, if the amount determined in the formula in the preceding sentence is negative, the number of shares available for issuance shall neither be increased nor decreased.” In addition, the Trust grants restricted stock that is not subject to the Plan. Summary of Stock Based Compensation Activity – Options The summary of Plan activity for the year ended December 31, 2019, with respect to the Trust’s stock options, was as follows: Weighted Number of Average Aggregate Options Exercise Price Intrinsic Value Balance as of December 31, 2018 106,000 7.96 - Plan Awards - - - Options Exercised - - - Balance as of December 31, 2019 106,000 7.96 110,240 Options vested at December 31, 2019 106,000 7.96 110,240 As of December 31, 2019, the weighted average remaining term of the options is 2.61 years. The summary of Plan activity for the year ended December 31, 2018, with respect to the Trust’s stock options, was as follows: Weighted Number of Average Aggregate Options Exercise Price Intrinsic Value Balance as of December 31, 2017 106,000 7.96 - Plan Awards - - - Options Exercised - - - Balance as of December 31, 2018 106,000 7.96 - Options vested at December 31, 2018 106,000 7.96 - As of December 31, 2018, the weighted average remaining term of the options is 3.61 years. Summary of Stock Based Compensation Activity – Restricted Stock The summary of stock based compensation activity for the year ended December 31, 2019, with respect to the Trust’s restricted stock, was as follows: Summary of Activity - Restricted Stock Number of Weighted Shares of Average Restricted Grant Date Stock Fair Value Balance as of December 31, 2018 54,033 6.23 Plan Awards 2,800 5.80 Restricted Stock Vested (32,800 ) 6.26 Balance as of December 31, 2019 24,033 6.14 The summary of Stock Based Compensation activity for the year ended December 31, 2018, with respect to the Trust’s restricted stock, was as follows: Summary of Plan Activity - Restricted Stock Number of Weighted Shares of Average Restricted Grant Date Stock Fair Value Balance as of December 31, 2017 48,833 6.17 Plan Awards 42,800 6.03 Restricted Stock Vested (37,600 ) 5.92 Balance as of December 31, 2018 54,033 6.23 Stock-based Compensation During 2019, the Trust recorded approximately $205,000 of non-cash expense related to restricted stock and options granted compared to approximately $223,000 for 2018. As of December 31, 2019, there was approximately $148,000 of total unrecognized share-based compensation expense, which expense will be recognized through the first quarter of 2021. The Trust does not currently have a policy regarding the repurchase of shares on the open market related to equity awards. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7 - INCOME TAXES The Trust is organized as a Maryland-domiciled real estate investment trust and has elected to be treated under the Internal Revenue Code as a real estate investment trust. As such, the Trust does not pay Federal taxes on taxable income and capital gains to the extent that they are distributed to shareholders. In order to maintain qualified status, at least 90% of annual ordinary taxable income must be distributed; it is the intention of the trustees to continue to make sufficient distributions to maintain qualified status. Under the Railroad Lease, NSC reimburses P&WV, in the form of additional cash rent, for all taxes and governmental charges imposed upon the assets leased by NSC from P&WV, except for taxes relating to cash rent payments made by the lessee. Due to the treatment of the Railroad Lease as a direct financing lease for financial reporting purposes, the tax basis of the leased property is higher than the basis of the leased property as reported in these consolidated financial statements. The Trust has implemented the accounting guidance for uncertainty in income taxes using the provisions of FASB ASC 740, Income Taxes For the years ended December 31, 2019 and 2018, 100% of dividends distributed by the Trust of $280,232 were deemed a return of capital. The Trust and its wholly-owned subsidiary P&WV are generally no longer subject to examination by income taxing authorities for years ended prior to December 31, 2014. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8 - RELATED PARTY TRANSACTIONS The Trust and its subsidiaries have hired Cohen, LLP (“Morrison Cohen”) as their legal counsel with respect to general corporate matters and the litigation with NSC. The spouse of the Trust’s Chairman, CEO, Secretary and Treasurer is a partner at Morrison Cohen. During the year ended December 31, 2019, Power REIT (on a consolidated basis) did not pay any legal fees and costs to Morrison Cohen. A wholly-owned subsidiary of Hudson Bay Partners, LP (“HBP”), an entity associated with the CEO of the company, David Lesser, provides the Trust and its subsidiaries with office space at no cost. Effective September 2016, the Board of Directors approved reimbursing an affiliate of HBP $1,000 per month for administrative and accounting support based on a conclusion that it would pay more for such support from a third party. A total of $12,000 was paid pursuant to this arrangement during each of the years ended December 31, 2019 and 2018. On January 28, 2020, the Board of Directors approved increasing the monthly reimbursement to HBP to $1,750 effective January 1, 2020 based on increased work level as well as a recognition that such work would cost significantly more if an independent third party firm was retained. David Lesser, CEO, paid expenses on behalf of the Company in the amount of $1,374 during 2018 which is disclosed as accounts payable – related party in the consolidated balance sheets. The amount is noninterest bearing, unsecured, and due on demand. During the year ended December 31, 2019, the accounts payable – related party was repaid. Under the Trust’s Declaration of Trust, the Trust may enter into transactions in which trustees, officers or employees have a financial interest, provided however, that in the case of a material financial interest, the transaction is disclosed to the Board of Trustees or the transaction shall be fair and reasonable. After consideration of the terms and conditions of the retention of Morrison Cohen described herein, and the reimbursement to HBP described herein, the independent trustees approved such arrangements having determined such arrangement are fair and reasonable and in the interest of the Trust. |
Contingency
Contingency | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingency | 9 - CONTINGENCY The Trust’s wholly-owned subsidiary, P&WV, is subject to various restrictions imposed by the Railroad Lease with NSC, including restrictions on share and debt issuance, including guarantees. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10 - SUBSEQUENT EVENTS On January 30, 2020 and February 20, 2020, Power REIT (the “Trust”) acquired two properties located in southern Colorado (the “Properties”) through two newly formed wholly owned subsidiaries of a wholly owned subsidiary of the Trust (each a “PropCo”). The first property, “Maverick 14”, was acquired for $850,000 and is 5.54 acres with an existing greenhouse and processing facility totaling approximately 8,300 square feet. As part of the transaction, the Trust has agreed to fund the immediate expansion of 15,120 square feet of greenhouse space for $1,058,400 and the tenant has agreed to fund the construction of approximately 2,520 additional square feet of head-house/processing space on the property. Accordingly, Power REIT’s total capital commitment totals $1,908,400. The second property, “Sherman 6”, was acquired for $150,000 and is 5.0 acres of vacant land approved for cannabis cultivation. As part of the transaction, the Trust has agreed to fund the immediate construction of 15,120 square feet of greenhouse space and 7,520 square feet of head-house/processing space on the property for $1,693,800. Accordingly, Power REIT’s total capital commitment totals $1,843,800. The total combined investment across these properties will be approximately $3,752,200 plus acquisition expenses. The acquisitions and commitments to fund construction are being funded from existing working capital. Each Propco has entered into a triple-net lease with an operator such that the tenant is responsible for paying all expenses related to the Properties, including maintenance expenses, insurance and taxes. The term of each lease is 20 years and provides two options to extend for additional five-year periods. The Leases also have financial guarantees from affiliates of the tenants. Each tenant intends to operate the Properties as licensed cannabis cultivation and processing facilities. The rent for each of the Leases is structured whereby after a deferred-rent period, the rental payments provide Power REIT a full return of invested capital over the next three years in equal monthly payments. The deferred-rent period for one of the leases is six months and for the other lease is nine months. After the deferred-rent period, rent is structured to provide a 12.5% return for one of the leases and a 12.9% return for the other lease based on the original invested capital amount with annual rent 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 on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven. The Leases require the Tenant to maintain a medical cannabis license and operate in accordance with all Colorado and state and local regulations with respect to its operations. The Leases prohibit the retail sale of the Tenant’s cannabis and cannabis-infused products from the Properties. On January 29, 2020, the Registrant declared a quarterly dividend of $0.484375 per share on Power REIT’s 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock payable on March 15, 2020 to shareholders of record on February 15, 2020. On January 31, 2020, Mr. Lesser was granted 40,000 shares as compensation which vests quarterly over three years with the first vesting to occur on 3/31/20. On March 19, 2020, Power REIT (the “Trust”) acquired a property located in southern Colorado (the “Property”) through a newly formed wholly owned subsidiary of a wholly owned subsidiary of the Trust (“PropCo”). The property, “Maverick 5”, was acquired for $150,000 and is 5.2 acres of vacant land approved for cannabis cultivation. As part of the transaction, the Trust has agreed to fund the immediate construction of 5,040 square feet of greenhouse space and 4,920 square feet of head-house/processing space on the property for $868,125. Accordingly, Power REIT’s total capital commitment totals $1,018,125 plus acquisition expenses. The Propco has entered into a triple-net lease with an operator such that the tenant is responsible for paying all expenses related to the Property, including maintenance expenses, insurance and taxes. The term of the lease is 20 years and provides two options to extend for additional five-year periods. The Lease also has a financial guarantee from affiliates of the tenant. The tenant intends to operate the Property as a licensed cannabis cultivation and processing facility. The rent for the Lease is structured whereby after a deferred-rent period, the rental payment provides Power REIT a full return of invested capital over the next three years in equal monthly payments. The deferred-rent period for the lease is six months. After the deferred-rent period, rent is structured to provide a 12.5% return for the lease based on the original invested capital amount with annual rent 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 on the original invested capital amount and will increase at a 3% rate per annum based 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 all Colorado and state and local regulations with respect to its operations. The Leases prohibit the retail sale of the Tenant’s cannabis and cannabis-infused products from the Properties. |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 11 – LEGAL PROCEEDINGS As previously disclosed in its public filings with the SEC, the Trust and its wholly-owned subsidiary P&WV have been involved in litigation with NSC and NSC’s sub-lessee, Wheeling & Lake Erie Railroad (“WLE” and, together with NSC, the “Litigants”) concerning matters arising under the Railroad Lease. The case was pending in Federal trial court in Pittsburgh (the “Court”). The Litigants initiated the litigation against the Trust and P&WV in December 2011, seeking, among other things, a declaratory judgment that NSC was not in default under the Railroad Lease. P&WV, as lessor, asserted counterclaims, seeking determinations that NSC was in default under the Railroad Lease for, among other things, failing to reimburse P&WV for certain legal fees incurred by P&WV, failing to permit P&WV to inspect NSC’s books and records as called for under the terms of the Railroad Lease and failing to pay other amounts that P&WV believes are due and owing. P&WV also sought declarations from the Court (a) that NSC’s obligation to repay the indebtedness owed under the Railroad Lease is not indefinite in duration, and (b) that the indebtedness owed to P&WV is due on demand with interest. If P&WV was successful with certain of its counterclaims, it would have been able to terminate the Railroad Lease and demand from NSC payment of the indebtedness. The indebtedness is the cumulative result of amounts received by NSC from its dispositions of P&WV property, additional rental amounts due and other sums that NSC owes to P&WV but which NSC has elected, under its interpretation of the Railroad Lease, to pay by increasing its indebtedness to P&WV rather than by providing P&WV with cash. According to records maintained by NSC pursuant to the Railroad Lease and provided by NSC to P&WV, as of December 31, 2012 the indebtedness owed to P&WV was approximately $16,600,000. NSC has not provided a more recent update of the indebtedness amount. The indebtedness has not been included in P&WV’s balance sheets prepared under GAAP, because of the dispute as to when it is due. Similarly, certain additional rental amounts that NSC disputes are due on a current basis, and which have historically been treated as indebtedness, have not been included in P&WV’s income statements or balance sheets prepared under GAAP; however, these additional rent amounts have historically been recorded as taxable income on P&WV’s tax returns. The parties made certain supplements to their respective claims and counterclaims. In August 2013, P&WV filed a second supplement to its counterclaims following the Litigants’ disclosure of previously undisclosed dispositions of P&WV property. P&WV was seeking a ruling that additional amounts are owed to it as a result of these dispositions and, accordingly, asserted new counterclaims, including claims of fraud and conversion. Based on the information available at the time P&WV supplemented its claims, P&WV estimated that the additional amounts owed to it exceeded $8 million, not including potential interest and damages. P&WV also supplemented its counterclaim for additional rental amounts due in order to include the reimbursement of its legal expenses related to the litigation. In response to P&WV’s second supplement to its counterclaims, in January 2014 the Litigants amended their pleadings to add additional claims against both P&WV and the Trust. The Litigants’ additional claims sought additional declarations from the Court that the Litigants have not defaulted on or violated the terms of the Railroad Lease. On September 13, 2013, the Trust filed a motion for summary judgment seeking dismissal of all of the claims against it primarily based on the fact that the Trust is not a party to the Lease. On January 15, 2014, the Court heard oral arguments from the parties on the Trust’s motion. On October 16, 2013, the Litigants filed a motion seeking leave to supplement their claims to include: (i) nominal damages, (ii) enjoinment of Power REIT from taking actions in breach of the Lease Agreement, (iii) the withdrawal of NSC’s consent to the additional share by PWV; and (iv) the undoing of the reverse triangular merger. On June 19, 2014, the court denied the Trust’s motion but also denied Plaintiff’s motion seeking leave to supplement their claims with the exception of granting the motion to seek nominal damages. On September 8, 2014, P&WV filed a Motion for Summary Judgment and on October 22, 2014, the Litigants filed an opposition to such motion and on November 5, 2014, P&WV filed a Reply to NSC and WLE’s opposition to such motion. On September 8, 2014, the Litigants filed a Motion for Summary Judgment and on October 22, 2014, P&WV filed an opposition to such motion and on November 5, 2014, the Litigants filed a reply to P&WV’s opposition to such motion. On December 16, 2014, the court held oral argument on both of the motions for Summary Judgment. On April 22, 2015, the court denied P&WV’s motion for summary judgment and granted the Litigants’ summary judgment motion thereby dismissing all of P&WV’s claims. During the week of August 3, 2015, a trial was conducted on the two remaining claims of the Litigants against P&WV and Power REIT. On December 29, 2015, the Court issued a ruling with respect to the remaining claims that were the subject of the trial. In the ruling, the Court found in favor of Power REIT on all claims brought against it by NSC and WLE. In addition, the Court also found in favor of P&WV with respect to claims brought against P&WV by WLE. However, the Court did find in favor of NSC against P&WV for certain of its claims (fraud and breach of contract) and awarded nominal damages of $1.00. In connection with NSC’s demand for punitive damages, the Court ruled that NSC was not entitled to punitive damages. On January 26, 2016, Power REIT and P&WV filed a Notice of Appeal to appeal the matter to the United States Court of Appeals for the Third Circuit. On April 28, 2016, Power REIT and P&WV filed its appellate brief. On June 27, 2016, NSC and WLE filed their reply brief. On August 10, 2016, Power REIT and P&WV filed a reply brief at which point the appeal was fully briefed. As previously disclosed, On August 29, 2017, the appellate court rendered its ruling affirming the ruling from the lower court in its entirety. Power REIT has not included a loss contingency associated with the outcome of the case since it believes all expenses related to the litigation have been accounted for in the financial statements contained herein. Power REIT and P&WV retained the firm of Keker & Van Nest LLP as lead counsel related to the appeal. P&WV has provided key court filings in the litigation on its website (www.pwreit.com) under a tab called “P&WV Litigation Update” which is under the “Investor Relations” tab. The provided documents and accompanying supporting documents are not comprehensive or complete and the full case docket is available from the Public Access to Court Records (PACER) website. Power REIT encourages interested parties to review all the public filings available on PACER and to review the risks and disclosures in Power REIT’s Annual Report filed on Form 10-k and other documents filed from time to time with the Securities and Exchange Commission (SEC). During the twelve months ended December 31, 2019 and 2018, P&WV incurred no litigation related expenses. As of December 31, 2019, P&WV had incurred a total of approximately $3.68 million of cumulative expenses related to the litigation. P&WV believed that the costs associated with the litigation are reimbursable by NSC under the Railroad Lease as additional rent, but the court ruled against it and the appellate court upheld this ruling. As of the date of this filing, NSC has continued to make its quarterly base rental payments ($228,750 per quarter). Based on the outcome of the litigation, the indebtedness described above that P&WV has accrued is deemed uncollectable and will be written off for tax purposes (it has not been reflected on P&WV’s financial statements which are consolidated into Power REIT’s financial statements). The indebtedness will be tracked by P&WV on an annual basis since, based on the outcome of the litigation, it effectively serves as a termination fee that is due upon termination of the lease for any purpose including default or failure to renew. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Power REIT (the “Registrant” or the “Trust”, and together with its consolidated subsidiaries, “we”, “us”, the “Company” or “Power REIT”, unless the context requires otherwise) is a Maryland-domiciled real estate investment trust (a “REIT”) that holds real estate assets related to transportation, alternative energy infrastructure and Controlled Environment Agriculture (CEA) in the United States. The Trust is structured as a holding company and owns its assets through seven 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, 2019, 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 601 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 108 Megawatts (“MW”) and approximately 7.3 acres of land with 18,612 sf of greenhouses leased to a medical cannabis operator. Power REIT is actively seeking to grow its portfolio of real estate related to CEA for food and cannabis production. P&WV is a business trust organized under the laws of Pennsylvania for the purpose of owning railroad assets that are currently leased to Norfolk Southern Railway (“NSC”) pursuant to a 99-year lease that became effective in 1964 and is subject to an unlimited number of 99-year renewal periods under the same terms and conditions, including annual rent payments, at the option of NSC (the “Railroad Lease”). P&WV’s assets consist of a railroad line of approximately 112 miles in length, extending through Connellsville, Washington and Allegheny Counties in the Commonwealth of Pennsylvania, through Brooke County in the State of West Virginia and through Jefferson and Harrison Counties in the State of Ohio, to Pittsburgh Junction in Harrison County, Ohio. There are also branch lines that total approximately 20 miles in length located in Washington and Allegheny Counties in Pennsylvania and Brooke County in West Virginia. NSC pays P&WV base cash rent of $915,000 per year, payable in quarterly installments. In addition, Power P&WV believes NSC is obligated to pay additional rent and other amounts, which was the subject of litigation. (See Item 3, Legal Proceedings). PW Salisbury Solar, LLC (“PWSS”) is a Massachusetts limited liability company that owns approximately 54 acres of land located in Salisbury, Massachusetts that is leased to a 5.7 MW utility scale solar farm. Pursuant to the lease agreement, PWSS’ tenant is required to pay PWSS rent of $80,800 cash for the year December 1, 2012 to November 30, 2013, with a 1.0% escalation in each corresponding year thereafter. Rent is payable quarterly in advance and is recorded by Power REIT for accounting purposes on a straight-line basis. For each of the twelve months ended December 31, 2019 and 2018 rent has been recorded in the amount of $89,494. At the end of the 22-year lease period, which commenced on December 1, 2011 (prior to being assumed by PWSS), the tenant has certain renewal options, with terms to be mutually agreed upon. PW Tulare Solar, LLC (“PWTS”) is a California limited liability company that owns approximately 100 acres of land leased to five (5) utility scale solar farms, with an aggregate generating capacity of approximately 20MW, located near Fresno, California. The solar farm tenants pay PWTS an aggregate annual rent of $157,500 cash, payable in advance and without escalation during the 25-year term of the leases. At the end of the 25-year terms, which commenced in March 2013 (prior to being assumed by PWTS), the tenants have certain renewal options, with terms to be mutually agreed upon. For each of the years ended December 31, 2019 and 2018, PWTS recorded rental income of $157,500. PW Regulus Solar, LLC (“PWRS”) is a California limited liability company that owns approximately 447 acres of land leased to a utility scale solar farm with an aggregate generating capacity of approximately 82 Megawatts in Kern County, California near Bakersfield. PWRS’s lease was structured to provide it with initial quarterly rental payments until the solar farm achieved commercial operation which occurred on November 11, 2014. During the primary term of the lease which extends for 20 years from achieving commercial operations, PWRS receives an initial annual rent of approximately $735,000 per annum which grows at 1% per annum. The lease is a “triple net” lease with all expenses to be paid by the tenant. At the end of the primary term of the lease, the tenants have certain renewal options with rent calculated as the greater of a minimum stated rental amount or a percentage of the total project-level gross revenue. The acquisition price, not including transaction and closing costs, was approximately $9.2 million. For each of the twelve months ended December 31, 2019 and 2018, PWRS recorded rental income of $803,116. PW CO CanRE JAB LLC (“PW JAB”) is a wholly owned subsidiary of a new formed wholly owned subsidiary of the Trust. In July 2019, PW JAB acquired two properties (the “JAB Properties”) in southern Colorado that have approximately 7.3 acres with 18,612 square feet of greenhouse cultivation and processing space. PW JAB has entered into two cross-collateralized and cross-defaulted triple-net leases with JAB Industries Ltd. for the JAB Properties. The leases provide that tenant is responsible for paying all expenses related to the JAB Properties, including maintenance expenses, insurance and taxes. The term of each of the leases is 20 years and provides two options to extend for additional five-year periods. For the twelve months ended December 31, 2019, PW JAB recorded rental income from the JAB Properties of $182,249. The leases also have financial guarantees from affiliates of the tenant. The tenant intends to operate the JAB Properties as licensed cannabis cultivation and processing facilities. The rent for each of the leases is structured whereby after a six-month free-rent period, the rental payments provide the Trust 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 12.5% return on the original invested capital amount which will increase at a 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be adjusted down to an amount equal to a 9% return on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven. The tenant is an affiliate of a company that owns and operates two indoor cannabis cultivation facilities and five dispensary locations in the State of Colorado along with several other cannabis related projects under development. The leases require the tenant to maintain a medical cannabis license and operate in accordance with all Colorado and local regulations with respect to its operations. The leases prohibit the retail sale of the tenant’s cannabis and cannabis-infused products from the JAB Properties. The Company’s revenue is highly concentrated, with lease payments from the lessee of P&WV and PWRS assets representing approximately 42% and 37%, respectively, of the Company’s consolidated revenues for the year ended December 31, 2019. Power REIT has elected to be treated for tax purposes as a REIT, which means that it is exempt from U.S. federal income tax if a sufficient portion of its annual income is distributed to its shareholders, and if certain other requirements are met. In order for Power REIT to maintain its REIT qualification, at least 90% of its ordinary taxable annual income must be distributed to shareholders. |
Basis of Presentation | Basis of Presentation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No 2016-02 “Leases” (Topic 842). The standard requires companies that lease valuable assets like aircraft, real estate, and heavy equipment to recognize on their balance sheets the assets and liabilities generated by contracts longer than a year. The standard also requires companies to disclose in the footnotes to their financial statements information about the amount, timing, and uncertainty for the payments they make for the lease agreements. This standard is effective for fiscal years and interim periods beginning after December 15, 2018, and the Company adopted the standard using the modified retrospective approach effective January 1, 2019. The lessor accounting model under ASC 842 is similar to existing guidance, however, it limits the capitalization of initial direct leasing costs, such as internally generated costs. The Company elected all practical expedients permitted under ASC 842, other than the hindsight practical expedient. Accordingly, the Company will retain distinction between a finance lease (i.e., capital leases under existing guidance) and an operating lease and account for its existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain a lease under ASC 842, (b) whether classification of the operating leases would be different in accordance with ASC 842 or (c) whether the unamortized initial direct costs before transition adjustments would have met the definition of initial direct costs in ASC 842 at lease commencement. The Company does not have a cumulative effect adjustment to retained earnings upon adoption. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718),” which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. The adoption of ASU 2018-07 on January 1, 2019 did not have a significant impact on our Consolidated Financial Statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include Power REIT and its wholly-owned subsidiaries. All intercompany balances have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Trust considers all highly liquid investments with original maturity of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition The Railroad Lease is treated as a direct financing lease, and income to P&WV under the Railroad Lease is recognized as earned based on an implicit rate of 10% over the life of the lease, which is assumed to be perpetual for the purposes of revenue recognition and recording the leased assets on the consolidated balance sheets. Lease revenue from solar land and greenhouse properties that are subject to an operating lease with rent escalation provisions are recorded on a straight-line basis when the amount of escalation in lease payments is known at the time Power REIT enters into the lease agreement, or known at the time Power REIT assumes an existing lease agreement as part of an acquisition (e.g., an annual fixed percentage escalation). Lease revenue from land that is subject to an operating lease without rent escalation provisions is recorded on a straight-line basis. |
Intangibles | Intangibles A portion of the acquisition price of the assets acquired by PWTS have been allocated on The Trust’s consolidated balance sheets between Land and Intangibles’ fair values at the date of acquisition. The total amount of intangibles established was approximately $237,000, which will be amortized over a 24.6-year period. For each of the twelve months ended December 31, 2019 and 2018, approximately $10,000 of the intangibles was amortized. A portion of the acquisition price of the assets acquired by PWRS have been allocated on The Trust’s consolidated balance sheets between Land and Intangibles’ fair values at the date of acquisition. The total amount of intangibles established was approximately $4,714,000, which is amortized over a 20.7-year period. For each of the twelve months ended December 31, 2019 and 2018, approximately $227,000 of the intangibles was amortized. Intangible assets are evaluated whenever events or circumstances indicate the carrying value of these assets may not be recoverable. There were no impairment charges recorded for the years ended December 31, 2019 and 2018. The following table provides a summary of the Intangible Assets: December 31, 2019 December 31, 2018 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Intangibles - PWTS $ 237,471 $ 62,389 $ 175,082 $ 237,471 $ 52,737 $ 184,734 Intangibles - PWRS 4,713,548 1,299,177 3,414,371 4,713,548 1,071,687 3,641,861 Total $ 4,951,019 $ 1,361,566 $ 3,589,453 $ 4,951,019 $ 1,124,424 $ 3,826,595 The following table provides a summary of the current estimate of future amortization of Intangible Assets: 2020 $ 237,141 2021 237,141 2022 237,141 2023 237,141 2024 237,141 Thereafter 2,403,748 Total $ 3,589,453 |
Land | Land Land is carried at cost. Upon the acquisition of land, management assesses the fair value of acquired assets (including land, improvements and identified intangibles such as above- and below-market leases and acquired in-place leases) and acquired and assumed liabilities (if any), and allocates the acquisition price based on these assessments. Newly acquired investments in land without in-place leases are recorded at cost (including costs related to the acquisition of the land). |
Net Investment in Direct Financing Lease - Railroad | Net Investment in Direct Financing Lease – Railroad P&WV’s net investment in its leased railroad property, recognizing the lessee’s perpetual renewal options, was estimated to have a current value of $9,150,000, assuming an implicit interest rate of 10%. |
Fair Value | Fair Value Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Trust measures its financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. ○ Level 1 – valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds. ○ Level 2 – valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third party pricing services for identical or comparable assets or liabilities. ○ Level 3 – valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. In determining fair value, the Trust utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk. The carrying amounts of Power REIT’s financial instruments, including cash and cash equivalents, prepaid expenses, and accounts payable approximate fair value because of their relatively short-term maturities. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. There are no financial assets and liabilities carried at fair value on a recurring basis as of December 31, 2019 and 2018. |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per share of common stock is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net earnings per share of common stock is computed by dividing net income attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding plus any potential dilutive shares for the period. For the years ended December 31, 2019 and 2018, the Company determined that there were no dilutive common shares, accordingly, basic and diluted earnings per share were the same. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Intangible Asset | The following table provides a summary of the Intangible Assets: December 31, 2019 December 31, 2018 Accumulated Net book Accumulated Net book Cost amortization value Cost amortization value Intangibles - PWTS $ 237,471 $ 62,389 $ 175,082 $ 237,471 $ 52,737 $ 184,734 Intangibles - PWRS 4,713,548 1,299,177 3,414,371 4,713,548 1,071,687 3,641,861 Total $ 4,951,019 $ 1,361,566 $ 3,589,453 $ 4,951,019 $ 1,124,424 $ 3,826,595 |
Schedule of Future Amortization of Intangible Assets | The following table provides a summary of the current estimate of future amortization of Intangible Assets: 2020 $ 237,141 2021 237,141 2022 237,141 2023 237,141 2024 237,141 Thereafter 2,403,748 Total $ 3,589,453 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Assets Acquired | The following table summarizes the allocation of the purchase consideration based on the fair values of the assets acquired: Land $ 140,577 Assets subject to depreciation: Improvements (greenhouses) 1,658,444 Total Assets Acquired $ 1,799,021 |
Direct Financing Leases and O_2
Direct Financing Leases and Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Minimum Future Rentals on Non-cancelable Operating Leases | The following is a schedule by years of minimum future rentals on non-cancelable operating leases as of December 31, 2019: Total 2020 1,803,960 2021 1,938,841 2022 1,947,478 2023 1,465,020 2024 1,404,177 Thereafter 17,803,927 Total 26,363,403 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The approximate amount of principal payments remaining on Power REIT’s long-term debt as of December 31, 2019 is described below: Total Debt 2020 598,256 2021 635,517 2022 675,390 2023 1,167,971 2024 715,778 Thereafter 21,215,114 Long term debt 25,008,026 |
Long-Term Compensation (Tables)
Long-Term Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Based Compensation Activity | The summary of Plan activity for the year ended December 31, 2019, with respect to the Trust’s stock options, was as follows: Weighted Number of Average Aggregate Options Exercise Price Intrinsic Value Balance as of December 31, 2018 106,000 7.96 - Plan Awards - - - Options Exercised - - - Balance as of December 31, 2019 106,000 7.96 110,240 Options vested at December 31, 2019 106,000 7.96 110,240 As of December 31, 2019, the weighted average remaining term of the options is 2.61 years. The summary of Plan activity for the year ended December 31, 2018, with respect to the Trust’s stock options, was as follows: Weighted Number of Average Aggregate Options Exercise Price Intrinsic Value Balance as of December 31, 2017 106,000 7.96 - Plan Awards - - - Options Exercised - - - Balance as of December 31, 2018 106,000 7.96 - Options vested at December 31, 2018 106,000 7.96 - |
Summary of Restricted Stock Plan Activity | Summary of Activity - Restricted Stock Number of Weighted Shares of Average Restricted Grant Date Stock Fair Value Balance as of December 31, 2018 54,033 6.23 Plan Awards 2,800 5.80 Restricted Stock Vested (32,800 ) 6.26 Balance as of December 31, 2019 24,033 6.14 The summary of Stock Based Compensation activity for the year ended December 31, 2018, with respect to the Trust’s restricted stock, was as follows: Summary of Plan Activity - Restricted Stock Number of Weighted Shares of Average Restricted Grant Date Stock Fair Value Balance as of December 31, 2017 48,833 6.17 Plan Awards 42,800 6.03 Restricted Stock Vested (37,600 ) 5.92 Balance as of December 31, 2018 54,033 6.23 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2019aft² | Dec. 31, 2019USD ($)aft² | Dec. 31, 2019USD ($)aft²shares | Dec. 31, 2018USD ($)shares | Nov. 30, 2013USD ($)a | |
Cash rent received | $ 1,232,359 | $ 1,050,110 | |||
Minimum percentage of taxable income to be distributed to shareholders | 90.00% | ||||
Amount of intangibles established approximately | $ 4,951,019 | $ 4,951,019 | 4,951,019 | ||
Intangibles amortized | 237,142 | 237,142 | |||
Impairment of intangible assets | |||||
Net investment in capital lease - railroad | $ 9,150,000 | $ 9,150,000 | $ 9,150,000 | ||
Anti dilutive common shares | shares | |||||
Medical Cannabis Operator [Member] | |||||
Acres of land | a | 7.3 | 7.3 | |||
Area of land, description | Aggregate generating capacity of approximately 108 Megawatts ('MW") and approximately 7.3 acres of land with 18,613 sf of greenhouses leased to a medical cannabis operator. | ||||
Square feet of land leased | ft² | 18,612 | 18,612 | |||
Pittsburgh & West Virginia Railroad [Member] | |||||
Acres of land | a | 601 | 601 | |||
Percentage of lease payments from lessee approximately | 42.00% | ||||
Percentage of earnings based on implicit rate | 10.00% | 10.00% | |||
Net investment in capital lease - railroad | $ 9,150,000 | $ 9,150,000 | |||
Percentage of implicit interest rate | 10.00% | 10.00% | |||
Norfolk Southern Railway [Member] | |||||
Capital lease term | 99 years | 99 years | |||
Capital lease renewal term | 99 years | 99 years | |||
Cash rent received | $ 228,750 | $ 915,000 | |||
PW Salisbury Solar LLC [Member] | |||||
Acres of land | a | 54 | ||||
Cash rent received | $ 80,800 | ||||
Annual rent escalation percentage | 1.00% | ||||
Advance rental expenses | $ 89,494 | $ 89,494 | $ 89,494 | ||
Operating lease term | 22 years | 22 years | |||
PW Tulare Solar LLC [Member] | |||||
Acres of land | a | 100 | 100 | |||
Cash rent received | $ 157,500 | 157,500 | |||
Advance rental expenses | $ 157,500 | $ 157,500 | |||
Operating lease term | 25 years | 25 years | |||
Amount of intangibles established approximately | $ 237,471 | $ 237,471 | 237,471 | ||
Amortized period | 24 years 7 months 6 days | ||||
Intangibles amortized | $ 10,000 | 10,000 | |||
PW Regulus Solar LLC [Member] | |||||
Acres of land | a | 447 | 447 | |||
Cash rent received | $ 735,000 | ||||
Annual rent escalation percentage | 1.00% | 1.00% | |||
Advance rental expenses | $ 803,116 | $ 803,116 | 803,116 | ||
Operating lease term | 20 years | 20 years | |||
Lease acquisition cost | $ 9,200,000 | ||||
Percentage of lease payments from lessee approximately | 37.00% | ||||
Amount of intangibles established approximately | $ 4,713,548 | $ 4,713,548 | 4,713,548 | ||
Amortized period | 20 years 8 months 12 days | ||||
Intangibles amortized | $ 227,000 | $ 227,000 | |||
PW CO CanRE JAB LLC [Member] | |||||
Acres of land | a | 7.3 | ||||
Square feet of land leased | ft² | 18,612 | ||||
Operating lease term | 20 years | ||||
Leases extend terms | Two options to extend for additional five-year periods. | ||||
Rental income | $ 182,249 | ||||
PW CO CanRE JAB LLC [Member] | After 42nd Month [Member] | |||||
Rent on original invested capital percentage | 12.50% | ||||
Rent rate | 3.00% | ||||
PW CO CanRE JAB LLC [Member] | After Year Six [Member] | |||||
Rent on original invested capital percentage | 9.00% | ||||
Rent rate | 3.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Intangible Asset (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Cost | $ 4,951,019 | $ 4,951,019 |
Accumulated amortization | 1,361,566 | 1,124,424 |
Net book value | 3,589,453 | 3,826,595 |
PW Tulare Solar LLC [Member] | ||
Cost | 237,471 | 237,471 |
Accumulated amortization | 62,389 | 52,737 |
Net book value | 175,082 | 184,734 |
PW Regulus Solar LLC [Member] | ||
Cost | 4,713,548 | 4,713,548 |
Accumulated amortization | 1,299,177 | 1,071,687 |
Net book value | $ 3,414,371 | $ 3,641,861 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
2020 | $ 237,141 | |
2021 | 237,141 | |
2022 | 237,141 | |
2023 | 237,141 | |
2024 | 237,141 | |
Thereafter | 2,403,748 | |
Total | $ 3,589,453 | $ 3,826,595 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total stockholders' equity | $ 9,570,753 | $ 8,698,756 | $ 7,917,456 |
Net income | 946,894 | $ 838,811 | |
February 6, 2020 [Member] | |||
Total stockholders' equity | 15,200,000,000 | ||
Net income | $ 2,700,000,000 | ||
Pittsburgh & West Virginia Railroad [Member] | |||
Concentration of lease in revenue | 42.00% | ||
PW Regulus Solar LLC [Member] | |||
Concentration of lease in revenue | 37.00% |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) | Jul. 12, 2019USD ($)aft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Depreciation expense | $ 38,757 | ||
Cash rental per annum | 1,232,359 | $ 1,050,110 | |
First 42 Month of Lease [Member] | |||
Cash rental per annum | $ 331,000 | ||
Leases terms | 20 years | ||
Leases extend terms | Two options to extend for additional five-year periods. | ||
Greenhouse Property One [Member] | |||
Acquisition amount | $ 1,075,000 | ||
Area of land | a | 2.11 | ||
Greenhouse Property One [Member] | Existing Greenhouse and Processing Facility [Member] | |||
Area of land | ft² | 12,996 | ||
Greenhouse Property Two [Member] | |||
Acquisition amount | $ 695,000 | ||
Area of land | a | 5.2 | ||
Greenhouse Property Two [Member] | Existing Greenhouse and Processing Facility [Member] | |||
Area of land | ft² | 5,616 | ||
Greenhouse Properties [Member] | |||
Acquisition amount | $ 1,770,000 | ||
Expenses related to acquisition of property | $ 29,021 | ||
Depreciation estimated useful life | 20 years | ||
Depreciation expense | $ 38,800 |
Acquisitions - Schedule of Fair
Acquisitions - Schedule of Fair Value of Assets Acquired (Details) | Dec. 31, 2019USD ($) |
Business Combinations [Abstract] | |
Land | $ 140,577 |
Improvements (greenhouses) | 1,658,444 |
Total Assets Acquired | $ 1,790,021 |
Direct Financing Leases and O_3
Direct Financing Leases and Operating Leases (Details Narrative) | Nov. 01, 2019USD ($)ft² | Jul. 12, 2019USD ($) | Jul. 31, 2019a | Dec. 31, 2019USD ($)a | Dec. 31, 2018USD ($) | Nov. 30, 2013USD ($)a |
Cash rental per annum | $ 1,232,359 | $ 1,050,110 | ||||
Pittsburgh & West Virginia Railroad [Member] | ||||||
Area of land | a | 601 | |||||
PW Salisbury Solar LLC [Member] | ||||||
Cash rental per annum | $ 80,800 | |||||
Annual rent escalation percentage | 1.00% | |||||
Advance rental expenses | $ 89,494 | 89,494 | ||||
Area of land | a | 54 | |||||
PW Tulare Solar LLC [Member] | ||||||
Cash rental per annum | 157,500 | 157,500 | ||||
Advance rental expenses | $ 157,500 | |||||
Area of land | a | 100 | |||||
PW Regulus Solar LLC [Member] | ||||||
Cash rental per annum | $ 735,000 | |||||
Annual rent escalation percentage | 1.00% | |||||
Advance rental expenses | $ 803,116 | 803,116 | ||||
Area of land | a | 447 | |||||
PW CO CanRE JAB LLC [Member] | ||||||
Leases extend terms | Two options to extend for additional five-year periods. | |||||
Area of land | a | 7.3 | |||||
PW CO CanRE JAB LLC [Member] | After Year Six [Member] | ||||||
Rent on original invested capital percentage | 9.00% | |||||
Rent rate | 3.00% | |||||
Direct Financing Leases [Member] | ||||||
Cash rental per annum | $ 915,000 | |||||
Capital lease term | 99 years | |||||
Capital lease renewal term | 99 years | |||||
Direct Financing Leases [Member] | Pittsburgh & West Virginia Railroad [Member] | ||||||
Lease description | P&WV has determined that the lease term is perpetual (for GAAP accounting purposes only) because it is perceived that it would be un-economic for the lessee to terminate and the Lessee has control over its actions with respect to default and has unlimited renewal options. Accordingly, as of January 1, 1983, the rentals receivable of $915,000 per annum, recognizing renewal options by the lessee in perpetuity, were estimated to have a present value of $9,150,000, assuming an implicit interest rate of 10% as of the date FASB ASC 840 and 842 was implemented. | |||||
Operating Lease [Member] | ||||||
Cash rental per annum | $ 182,249 | |||||
Operating Lease [Member] | Pittsburgh & West Virginia Railroad [Member] | ||||||
Operating lease term | 22 years | |||||
Annual rent escalation percentage | 1.00% | |||||
Operating Lease [Member] | PW Salisbury Solar LLC [Member] | ||||||
Cash rental per annum | $ 89,494 | 89,494 | $ 80,800 | |||
Lease expiration date | Dec. 1, 2033 | |||||
Operating Lease [Member] | PW Tulare Solar LLC [Member] | ||||||
Cash rental per annum | $ 157,500 | 157,500 | ||||
Operating lease term | 25 years | |||||
Advance rental expenses | $ 157,500 | |||||
Leases lease payment | $ 735,000 | |||||
Percentage of expenses paid by tenant | 1.00% | |||||
Operating Lease [Member] | PW Regulus Solar LLC [Member] | ||||||
Cash rental per annum | $ 803,116 | $ 803,116 | ||||
Operating lease term | 20 years | |||||
Operating Lease [Member] | PW CO CanRE JAB LLC [Member] | ||||||
Cash rental per annum | $ 165,000 | $ 331,000 | ||||
Operating lease term | 20 years | |||||
Leases extend terms | Two options to extend for additional five-year periods. | |||||
Area of land | ft² | 10,800 | |||||
Funds for expansion | $ 899,582 | |||||
Rent on original invested capital percentage | 12.50% | |||||
Rent rate | 3.00% | |||||
Operating Lease [Member] | PW CO CanRE JAB LLC [Member] | After Year Six [Member] | ||||||
Rent on original invested capital percentage | 9.00% | |||||
Rent rate | 3.00% |
Direct Financing Leases and O_4
Direct Financing Leases and Operating Leases - Schedule of Minimum Future Rentals on Non-cancelable Operating Leases (Details) | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 1,803,960 |
2021 | 1,938,841 |
2022 | 1,947,478 |
2023 | 1,465,020 |
2024 | 1,404,177 |
Thereafter | 17,803,927 |
Total | $ 26,363,403 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | Nov. 25, 2019 | Nov. 06, 2015 | Dec. 31, 2012 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | Jul. 05, 2013 |
Debt fixed interest rate | 4.62% | ||||||
Debt maturity year | 2054 (35 years) | ||||||
Outstanding loan balance | $ 25,008,026 | ||||||
Proceeds from long term debt | $ 15,500,000 | 15,500,000 | |||||
Proceeds from issuance of debt | $ 312,200 | ||||||
Pittsburgh & West Virginia Railroad [Member] | |||||||
Outstanding loan balance | 15,168,600 | ||||||
Capitalized debt cost | 311,000 | ||||||
PWSS Term Loan [Member] | |||||||
Debt amount | $ 750,000 | ||||||
Debt fixed interest rate | 5.00% | ||||||
Outstanding loan balance | $ 579,000 | 605,000 | |||||
Debt term | 10 years | ||||||
Debt description | The PWSS Term Loan carries a fixed interest rate of 5.0%, a term of 10-years and amortizes based on a twenty-year principal amortization schedule. | ||||||
Capitalized debt cost | $ 9,500 | 12,000 | |||||
Municipal Debt [Member] | |||||||
Debt term | 12 years | ||||||
Debt interest rate | 5.00% | ||||||
Debt maturity date | Feb. 1, 2019 | ||||||
Municipal debt securities carrying value | 77,000 | 83,000 | |||||
PWRS Bonds [Member] | |||||||
Capitalized expenses | $ 441,000 | ||||||
Debt repayment in cash | $ 97,000 | ||||||
Number of shares issued for debt | 344,000 | ||||||
Outstanding loan balance | 8,538,000 | 8,870,000 | |||||
Unamortized debt costs | $ 325,000 | $ 348,000 | |||||
PWRS Bonds [Member] | Land and Intangibles [Member] | |||||||
Debt amount | $ 10,150,000 | ||||||
Debt fixed interest rate | 4.34% | ||||||
Debt maturity year | 2034 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 598,256 |
2021 | 635,517 |
2022 | 675,390 |
2023 | 1,167,971 |
2024 | 715,778 |
Thereafter | 21,215,114 |
Long-term Debt | $ 25,008,026 |
Long-Term Compensation (Details
Long-Term Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted average remaining term | 2 years 7 months 10 days | 3 years 7 months 10 days |
Non-cash expense related to restricted stock and options granted | $ 205,000 | $ 223,000 |
Unrecognized share-based compensation expense | $ 148,000 | |
Recognized period description | First quarter of 2021. | |
2012 Equity Incentive Plan [Member] | ||
Number of shares available for issuance under plan | 200,000 | |
Percentage of outstanding shares of stock | 10.00% |
Long-Term Compensation - Summar
Long-Term Compensation - Summary of Stock Based Compensation Activity (Details) - Stock Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Options, Beginning balance | 106,000 | 106,000 |
Number of Options, Plan Awards | ||
Number of Options, Options Exercised | ||
Number of Options, Ending balance | 106,000 | 106,000 |
Number of Options, Vested | 106,000 | 106,000 |
Weighted Average Exercise Price, Beginning balance | $ 7.96 | $ 7.96 |
Weighted Average Exercise Price, Plan Awards | ||
Weighted Average Exercise Price, Options Exercised | ||
Weighted Average Exercise Price, Ending balance | 7.96 | 7.96 |
Weighted Average Exercise Price, Options Vested | $ 7.96 | $ 7.96 |
Aggregate Intrinsic Value, Beginning balance | ||
Aggregate Intrinsic Value, Ending balance | 110,240 | |
Aggregate Intrinsic Value, Options Vested | $ 110,240 |
Long-Term Compensation - Summ_2
Long-Term Compensation - Summary of Restricted Stock Plan Activity (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares Restricted Stock, Beginning balance | 54,033 | 48,833 |
Number of Shares Restricted Stock, Plan Awards | 2,800 | 42,800 |
Number of Shares Restricted Stock, Restricted Stock Vested | (32,800) | (37,600) |
Number of Shares Restricted Stock, Ending balance | 24,033 | 54,033 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 6.23 | $ 6.17 |
Weighted Average Grant Date Fair Value, Plan Awards | 5.80 | 6.03 |
Weighted Average Grant Date Fair Value, Restricted Stock Vested | 6.26 | 5.92 |
Weighted Average Grant Date Fair Value, Ending balance | $ 6.14 | $ 6.23 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Percentage of annual ordinary taxable income distributed | 90.00% | |
Dividend distributed percentage | 100.00% | 100.00% |
Dividends distributed | $ 280,232 | $ 280,232 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 28, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2016 |
Board of Directors [Member] | Subsequent Event [Member] | ||||
Increase in reimbursement | $ 1,750 | |||
David H. Lesser [Member] | ||||
Accounts payable - related party | $ 1,374 | |||
Hudson Bay Partners, L.P [Member] | ||||
Payments to affiliate | $ 12,000 | $ 12,000 | ||
Hudson Bay Partners, L.P [Member] | Board of Directors [Member] | ||||
Reimbursing an affiliate, per month | $ 1,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Mar. 19, 2020USD ($)aft² | Feb. 20, 2020USD ($)aft² | Jan. 31, 2020shares | Jan. 30, 2020USD ($)aft² | Jan. 29, 2020$ / shares | Dec. 31, 2019 |
Vesting period, description | First quarter of 2021. | |||||
Subsequent Event [Member] | ||||||
Acquisition amount | $ 3,752,200 | $ 3,752,200 | ||||
Rent rate | 3.00% | 3.00% | ||||
Lease term | 20 years | |||||
Lease description | The term of the lease is 20 years and provides two options to extend for additional five-year periods. The Lease also has a financial guarantee from affiliates of the tenant. The tenant intends to operate the Property as a licensed cannabis cultivation and processing facility. The rent for the Lease is structured whereby after a deferred-rent period, the rental payment provides Power REIT a full return of invested capital over the next three years in equal monthly payments. The deferred-rent period for the lease is six months. After the deferred-rent period, rent is structured to provide a 12.5% return for the lease based on the original invested capital amount with annual rent 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 on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven. | |||||
Subsequent Event [Member] | Series A Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||
Dividend paid per share | $ / shares | $ 0.484375 | |||||
Preferred stock dividend percentage | 7.75% | |||||
Dividend payable date | Mar. 15, 2020 | |||||
Dividend payable recorded date | Feb. 15, 2020 | |||||
Subsequent Event [Member] | One Lease [Member] | ||||||
Rent on original invested capital percentage | 12.50% | 12.50% | ||||
Subsequent Event [Member] | Other Lease [Member] | ||||||
Rent on original invested capital percentage | 12.90% | 12.90% | ||||
Subsequent Event [Member] | After Year Six [Member] | ||||||
Rent on original invested capital percentage | 9.00% | 9.00% | ||||
Rent rate | 3.00% | 3.00% | ||||
Subsequent Event [Member] | Tenant [Member] | ||||||
Funds area for expansion | ft² | 2,520 | |||||
Subsequent Event [Member] | Mr. Lesser [Member] | ||||||
Number of shares vested | shares | 40,000 | |||||
Vesting period | 3 years | |||||
Vesting period, description | Vests quarterly over three years with the first vesting to occur on 3/31/20. | |||||
Subsequent Event [Member] | Maverick 14 [Member] | ||||||
Acquisition amount | $ 850,000 | |||||
Area of land | a | 5.54 | |||||
Funds area for expansion | ft² | 15,120 | |||||
Funds for expansion | $ 1,058,400 | |||||
Capital commitment | $ 1,908,400 | |||||
Subsequent Event [Member] | Maverick 14 [Member] | Existing Greenhouse and Processing Facility [Member] | ||||||
Area of land | 4,920 | 8,300 | ||||
Subsequent Event [Member] | Sherman 6 [Member] | ||||||
Acquisition amount | $ 150,000 | |||||
Area of land | a | 5 | |||||
Funds for expansion | $ 1,693,800 | |||||
Capital commitment | $ 1,843,800 | |||||
Subsequent Event [Member] | Sherman 6 [Member] | Greenhouse Space [Member] | ||||||
Funds area for expansion | ft² | 15,120 | |||||
Subsequent Event [Member] | Sherman 6 [Member] | Head-House/processing Space [Member] | ||||||
Funds area for expansion | ft² | 7,520 | |||||
Subsequent Event [Member] | Maverick 5 [Member] | ||||||
Acquisition amount | $ 150,000 | |||||
Area of land | a | 5.2 | |||||
Funds area for expansion | ft² | 5,040 | |||||
Funds for expansion | $ 868,125 | |||||
Capital commitment | $ 1,018,125 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2013 | Dec. 31, 2012 | |
Nominal damage claims | $ 1 | ||||
Cash rental per annum | 1,232,359 | $ 1,050,110 | |||
Norfolk Southern Railway [Member] | |||||
Indebtedness owed to P&WV | $ 16,600,000 | ||||
Cash rental per annum | $ 228,750 | 915,000 | |||
Pittsburgh & West Virginia Railroad [Member] | |||||
Additional amount owed to P&WV | $ 8,000,000 | ||||
Litigation settlement expense | |||||
Litigation settlement total | $ 3,680,000 |