Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 14

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 14
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 of common or preferred stock with terms and conditions that could have the effect of
delaying, deferring or preventing a change in control or other transaction that might involve a premium price for shares of our common
stock or otherwise be in the best interest of our stockholders.

Power to Increase or Decrease Authorized Shares of Stock and Issue Additional Shares of Common and Preferred Stock

We believe that the
power of our board of directors to amend our charter to increase or decrease the number of authorized shares of our stock, to authorize
us to issue additional authorized but unissued shares of common or preferred stock and to classify or reclassify unissued shares of common
or preferred stock and thereafter to authorize us to issue such classified or reclassified shares of stock will provide us with increased
flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. Subject to the rights
holders of the Series A Preferred Stock will have to approve the classification or issuance of shares of a class or series of our
stock ranking senior to the Series A Preferred Stock, the additional classes or series, as well as the additional shares of common
stock, will be available for issuance without further action by our stockholders, unless such approval is required by the terms of any
other class or series of our stock or the rules of any stock exchange or automated quotation system on which our securities may
be listed or traded. Although our board of directors does not intend to do so, it could authorize us to issue a class or series of stock
that could, depending upon the terms of the particular class or series, delay, defer or prevent a change in control or other transaction
that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

Restrictions on Ownership and Transfer

In order for us to qualify as a REIT under the
Internal Revenue Code of 1986, as amended (the “Code”), shares of our stock must be owned by 100 or more persons during at
least 335 days of a taxable year of 12 months (other than the first year for which an election to be taxed as a REIT has been made) or
during a proportionate part of a shorter taxable year. Also, under Section 856(h) of the Code, a REIT cannot be “closely
held.” In this regard, not more than 50% of the value of the outstanding shares of stock may be owned, directly or indirectly,
by five