Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 99

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 99
---
 realized as a result of the transaction or breach and make up for any losses incurred by the Plan as a result of the transaction
or breach. With respect to an IRA that invests in our securities, the occurrence of a non-exempt prohibited transaction involving the
individual who established the IRA, or his or her beneficiary, would cause the IRA to lose its tax-exempt status under Section 408(e)(2) of
the Code. Accordingly, the fiduciary of a Plan or any other person making investment decisions for a Plan should consider the application
of the prohibited transaction rules (and the available exemptions, if any) of ERISA and the Code prior to making any decision to
purchase and hold our securities. There can be no assurance that the conditions of any of the available prohibited transaction exemptions
will be satisfied. In addition, if we are deemed to hold plan assets (as described below), then our management could be characterized
as fiduciaries with respect to such assets, and each would be deemed to be a party-in-interest under ERISA and a disqualified person
under the Code with respect to investing Plans. Whether or not we are deemed to hold plan assets, if we or our affiliates are affiliated
with a Plan investor, we might be a disqualified person or party-in-interest with respect to such Plan investor, resulting in a non-exempt
prohibited transaction merely upon investment by such Plan in our securities.

Plan Asset Considerations

As noted above, if we are deemed to hold
“plan assets” then our management could be characterized as fiduciaries under ERISA which could create the potential for
non-exempt prohibited transactions under regulations promulgated by the Department of Labor (the “Plan Assets
Regulation”), when a Plan makes an equity investment in an entity, the assets of such Plan include not only the equity
interest, but also include an undivided interest in the underlying assets of the entity, unless one of the exceptions to this
general rule applies.

In the event that our underlying assets were treated
as the assets of investing Plans, our management would be treated as fiduciaries with respect to each Plan that invests in our securities
and an investment in our securities might constitute an ineffective delegation by such Plans of fiduciary responsibility to our advisors,
and expose the fiduciary of the Plan to co-fiduciary liability under ERISA for any breach by our advisor of the fiduciary duties mandated
under ERISA. Further, if our assets are deemed to be