Power REIT (NYSE American: PW), a Maryland-based real estate investment trust currently trading at $1.18 per share, announced today its entry into an at-the-market (ATM) equity offering program. According to InvestingPro data, the company faces significant challenges with negative EBITDA of $0.49 million and a 20.7% revenue decline in the last twelve months. The trust entered into a sales agreement with A.G.P./Alliance Global Partners (NYSE:GLP), enabling the issuance and sale of its common shares from time to time.
Under the agreement, transactions will be made pursuant to an "at the market offering" as defined by Rule 415(a)(4), with no obligation for A.G.P. to sell a specific number of shares. A.G.P. will act as a sales agent, receiving a 3% commission on gross proceeds from each sale.
The offering aims to capitalize on market opportunities and is not bound by a minimum share sale requirement. The agreement may be terminated by either party with two days' notice and will conclude upon the sale of all shares under the ATM Prospectus or upon termination of the agreement, whichever comes first.
This move follows Power REIT's strategic pivot in 2019 towards greenhouse investments for sustainable crop cultivation. However, the market challenges have led to significant vacancies in its greenhouse portfolio, which is now up for sale. InvestingPro analysis reveals the company's weak financial health score of 0.89, though it maintains a healthy current ratio of 2.13.
The trust is currently exploring new opportunities amidst a real estate market in flux, characterized by distressed properties and shifting demands. InvestingPro subscribers have access to 8 additional key insights about Power REIT's financial position and market performance.
The company's focus is on distressed real estate, including debt, properties, and related companies. The ATM equity program is part of Power REIT's strategy to raise capital selectively to invest in such opportunities.
Investors should note that this report is based on a press release statement and that the sale of common shares is subject to market conditions and other factors. Despite a remarkable 93.69% price return over the past year, InvestingPro data indicates the stock trades with high volatility, with a beta of 1.27. The trust's greenhouse portfolio secures a loan currently in default, although it is non-recourse to Power REIT, limiting its exposure.
The details of the sales agreement are outlined in Exhibit 1.1 of the Form 8-K filed with the U.S. Securities and Exchange Commission.
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