Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 76

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 76
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 · | 90% of our after-tax net income, if any, from foreclosure     
 property, minus                                               |

| · | the sum of certain items of non-cash 
 income.                              |

We must make such distributions in the taxable
year to which they relate, or in the following taxable year if either (i) we declare the distribution before we timely file our
U.S. federal income tax return for the year and pay the distribution on or before the first regular dividend payment date after such
declaration or (ii) we declare the distribution in October, November or December of the taxable year, payable to stockholders
of record on a specified day in any such month, and we actually pay the dividend before the end of January of the following year.
The distributions under clause (i) are taxable to the stockholders in the year in which paid, and the distributions in clause (ii) are
treated as paid on December 31 of the prior taxable year. In both instances, these distributions relate to our prior taxable year
for purposes of the 90% distribution requirement.

In order for distributions to be counted as satisfying
the annual distribution requirements for REITs other than “publicly offered” REITs, and to provide a REIT-level tax deduction
for such REITs, the distributions must not be a “preferential dividend.” A distribution is not a preferential dividend if
the distribution is (i) pro-rata among all outstanding shares within a particular class and (ii) in accordance with the preferences
among different classes of shares as set forth in the REIT’s organizational documents. Such preferential dividend rules will
not apply to our distributions if we qualify as a “publicly offered” REIT. We believe that we will be a “publicly offered”
REIT.

We will pay U.S. federal income tax on taxable
income, including net capital gain, that we do not distribute to stockholders. Furthermore, if we fail to distribute during a calendar
year, or by the end of January following the calendar year in the case of distributions with declaration and record dates falling
in the last three months of the calendar year, at least the sum of:

| · | 85% of our REIT ordinary income                                                                                                  
 for such year,                                                                                                                   |
| · | 95% of our REIT capital gain income for such year,                                                                               
 and                                                                                                                              |
| · | any undistributed taxable income from prior periods,                                                                             
 we will incur a