Company: IIPR
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001677576-25-000005
Chunk: 171

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 8
Chunk 171
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 number of common equity units representing 1.5% of the fully diluted outstanding common equity of IQHQ Holdings, LP (after giving effect to all previously issued warrants) as of the date of the initial closing.

Pursuant to the terms of the Securities Purchase Agreement, upon the initial closing, IIP Life Science obtained the right to appoint one voting member to IQHQ REIT’s board of directors, subject to certain ownership thresholds, and designated Paul Smithers, the Company’s CEO, for this role. IIP Life Science also entered into a Right of First Offer Letter with IQHQ REIT and its affiliates, granting the Company a contractual right of first offer on certain real estate asset sales of IQHQ REIT and certain of its affiliates, which the Company expects will support the execution of its strategy to acquire life science properties.

 IQHQ Revolving Credit Facility Investment

In connection with the initial closing under the Securities Purchase Agreement, on September 30, 2025, IIP Life Science became a lender under the IQHQ Credit Facility. Pursuant to the terms of the facility, IIP Life Science committed to provide a $100.0 million loan to the operating partnership of IQHQ REIT, which was fully funded on that same date. As a result of IIP Life Science’s participation, the aggregate amount funded under the IQHQ Credit Facility by all lender parties increased to $400.0 million.

The IQHQ Credit Facility bears interest at a fixed annual rate of 13.5%, consisting of 12.0% payable in cash and 1.5% PIK, with interest payable quarterly. The IQHQ Credit Facility has an initial term of three years from the closing date, with a one-time extension option of up to 12 months, subject to the satisfaction of certain conditions and payment of a facility extension fee. All obligations under the IQHQ Credit Facility are unconditionally guaranteed by IQHQ REIT and secured by a first priority pledge of  IQHQ, LP’s majority ownership interest in IQHQ Fenway Center, LLC, subordinated to certain construction financing. IQHQ, LP is the operating partnership of IQHQ REIT. IIP Life Science is subject to a rate reduction penalty of up to 3.0% in the event it fails to make required purchases of IQHQ Preferred Stock under the  Securities Purchase Agreement. The IQHQ Credit Facility includes customary representations, warranties, and covenants, as well as major decision rights requiring lender approval. IQHQ, LP is required to prepay