Company: IIPR
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001677576-25-000005
Chunk: 92

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 92
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% on each of the fourth and fifth anniversaries of issuance. In the event of a failure by IQHQ REIT to make required redemptions or cash dividend payments, the PIK dividend rate increases by an additional 5.0%, until the failure is cured, subject to a cap on the increase.  The IQHQ Preferred Stock ranks senior to IQHQ REIT’s common equity and any junior securities, pari passu with its Series E Preferred Stock and other parity securities, and junior to its Series A and Series D-1 Preferred Stock with respect to dividends and liquidation preferences. The IQHQ Preferred Stock is not convertible and carries limited voting rights, except as required by law or with respect to charter amendments that are materially adverse to holder rights. The IQHQ Preferred Stock may be redeemed by IQHQ REIT at any time at the greater of $1,560 per share or the then-current Base Amount and may also be subject to holder redemption upon a change of control or sale transaction.

The remaining balance of the Company’s committed investment in IQHQ Preferred Stock is expected to be funded in multiple tranches between the fourth quarter of 2025 and the second quarter of 2027, subject to extension options exercisable by IQHQ REIT. In connection with the initial closing, IIP Life Science also received a warrant (the “IQHQ Warrant”) to purchase common equity units of IQHQ Holdings, LP, a Delaware limited partnership and the parent entity of IQHQ REIT. The IQHQ Warrant is exercisable for a 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, I