**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF1934

 

For the Quarterly period ended March31, 2012

 

333-177802 

(Commission File Number)

 

**POWER REIT**

(Exact name of registrant asspecified in its charter)

** **

| **Maryland**                              | **45-3116572**                        |
|-------------------------------------------|---------------------------------------|
| (State of Organization)                   | (I.R.S. Employer Identification  No.) |
|                                      |                                  |
| **55 Edison Avenue, West Babylon, NY**    | **11704**                             |
| (Address of principal executive  offices) | (Zip Code)                            |

 

 

**(212) 750-0373**

(Registrant’s telephone number)

 

 

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 

Yes__X__            No _____

 

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of thischapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files).

 

Yes__X__            No _____

 

 

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Largeaccelerated filer         _____                   Accelerated filer                                   _____Non-accelerated filer           _____                   Smaller reportingcompany               __X__

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

 

Yes_____             No __X__

 

 

Indicatethe number of shares outstanding of each of the issuer's classes of commonstock, as of the latest practicable date.

 

1,623,250shares of beneficial interest, without par value, outstanding at March 31, 2012.

 

 

 

 

**PARTI.  FINANCIAL INFORMATION**

 

Item1.  Financial Statements

 

**CONSOLIDATED INCOME STATEMENT**

**(Dollars in Thousands)**

**(Unaudited)**

 

 

|                                                                               | **Three Months Ended**

**March 31,**                                     |                                                               |
|------------------------------------------------------------------------------------|---------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                                                               | 2012                                                                      | 2011                                                               |
| **INCOME  AVAILABLE FOR DISTRIBUTION**                                             |                                                                      |                                                               |
| Interest  Income from capital lease                                                |        $  229                               |        $  229                        |
| General  & Administrative Expense                                         |              99         |              60  |
| Non-Recurring  Litigation Expense                                                  | **           **83  | **         **** __-** |
| **Net  Income**                                                                    | **            47** | **          169**     |
|                                                                               |                                                                      |                                                               |
| **Fully  Diluted, Per Share:**                                                     |                                                                      |                                                               |
|             Net  Income     |       $  0.03                                    |         $  .11                  |
|             Cash  Dividends |       $  0.10                                    |         $  .10                  |
|                                                                               |                                                                      |                                                               |
| **Weighted  Average Number of Shares Outstanding**                                 | 1,623,250                                                                 | 1,528,875                                                          |
|                                                                                    |                                                                           |                                                                    |  |

 

Amountsmay not add due to rounding. The accompanying notes are an integral part ofthese financial statements.

 

| **CONSOLIDATED BALANCE SHEET**

**(Dollars in Thousands)**

** **                                                                                                     |                                                                                                                                                                                                     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                 | **(Unaudited)**

**March 31,**

**2012**                                                                                                                                                                 | **(Audited)**

**December 31,**

**2011** |
| **ASSETS**                                                                                                                                                                 |                                                                                                                                                                                                     |   |
| Cash  and Cash Equivalents                                                                                                                                                 |                        $    894                                                  |                          $  982 |
| Deposits                                                                                                                                                                   |                                40                  |                                   - |
| Prepaid  Expense                                                                                                                                                           |                                 21                      |                                   3 |
| Accounts  Receivable                                                                                                                                                       |                                   - |                                   - |
| Net  investment in capital lease                                                                                                                                           |                           9,150                                                       |                           9,150 |
| **TOTAL  ASSETS**                                                                                                                                                          | **                    $10,105**                                                                           | **                   $  10,135** |
|                                                                                                                                                                       |                                                                                                                                                                                                     |   |
| **LIABILITIES  AND SHAREHOLDERS' EQUITY**                                                                                                                                  |                                                                                                                                                                                                     |   |
| Accounts  Payable                                                                                                                                                          |                          $    96                                       |                        $      10 |
| Shareholders'  equity:

Shares  of beneficial interest, at no par value (1,623,250 

shares  issued and outstanding as of 12/31/2011 and 

3/31/2012,  respectively)  |                        10,072                                                              |                        10,072 |
| Retained  Earnings                                                                                                                                                         |                             (63)                                  |                                53 |
| Total  shareholders' equity                                                                                                                                                |                        10,009                                                              |                        10,125 |
| **TOTAL  LIABILITIES AND**

**SHAREHOLDERS'  EQUITY**                                                                                                                      | **                       10,105**                                                          | **                       10,135** |
|                                                                                                                                                                       |                                                                                                                                                                                                     |   |
| **SHARES  OF BENEFICIAL INTEREST**                                                                                                                                         |                                                                                                                                                                                                     |   |
| Par  Value                                                                                                                                                                 |                   $      0.001                                                                  |                   $      0.001 |
| Common  shares issued                                                                                                                                                      |                  1,623,250                                                                                               |                  1,623,250 |
| Common  shares outstanding                                                                                                                                                 |                  1,623,250                                                                                               |                  1,623,250 |
|                                                                                                                                                                            |                                                                                                                                                                                                          |  |  |

 

Amountsmay not add due to rounding. The accompanying notes are an integral part of thesefinancial statements.

 

| **CONSOLIDATED STATEMENT OF CASH  FLOWS**

**(Dollars in Thousands)**

**(Unaudited)**

** ** |
|----------------------------------------------------------------------------------------------------|
|                                                                                               | **Three Months Ended**

**March 31,** |
|                                                                                               | **2012** | **2011** |
| **CASH  FLOW FROM OPERATING ACTIVITIES:**                                                          |   |   |
|             Net  Income                     |                  $   47 |              $  169 |
|             Deposits                        |                   (40) |                       - |
|             Change  in Prepaid Expenses     |                    (18) |                  (34) |
|             Change  in Accounts Payable     |                      86 |                       - |
|             Change  in Accounts Receivable  |                           |   |
| **NET  CASH PROVIDED BY OPERATING ACTIVITIES**                                                     | **                  $  75** | **             $  135** |
|                                                                                               |   |   |
| **CASH  FLOW FROM FINANCING ACTIVITIES:**                                                          |   |   |
|             Dividends  Paid                 |                  (162 ) |                (151 ) |
|             Net  Proceeds from Financing    |                  ** **** __-**    |                   968 |
| **NET  CASH PROVIDED BY (USED IN)**

**FINANCING  ACTIVITIES**                                     | **             $  (162)** | **              $817** |
|                                                                                               |   |   |
| **Net  increase (decrease) in Cash**                                                               | **                  (88)** | **                 952** |
|             Cash,  beginning of period      |                    982 |                    49 |
|             Cash,  end of period            |                $  894 |            $1,000 |

 

Amountsmay not add due to rounding. The accompanying notes are an integral part ofthese financial statements.

 

**Notesto unaudited financial statements:**

 

1. GeneralInformation

Theforegoing interim consolidated financial statements are unaudited but, in theopinion of management, reflect all adjustments necessary for a fairpresentation of the results of operations for the interim periods presented.  Alladjustments are of a normal recurring nature. 

 

PowerREIT ("Registrant" or "Trust") has elected to be treatedfor tax purposes as a real estate investment trust (REIT). It is the Trust'spolicy to distribute at least 90% of its ordinary taxable income to itsshareholders to maintain its REIT corporate status.  

 

PowerREIT’s only current asset is its ownership of its wholly-owned subsidiary, Pittsburgh& West Virginia Railroad (“P&WV”), which has leased the entirety of itsrailroad property to Norfolk Southern Corporation (“NSC”) pursuant to a 99-yearlease.   NSC pays base cash rent of $915,000 annually, payable in quarterlyinstallments.  In addition, in accordance with the terms of the lease, NorfolkSouthern Corporation (“NSC”) will reimburse P&WV, in the form of additionalrent, for all taxes and governmental charges imposed upon the leased assets ofthe Trust, except for taxes relating to base cash rent payments made by the NSC,and for amounts incurred by P&WV to protect its rights and interests underthe lease.  Due to the treatment of the lease as a direct financing lease forGAAP purposes, the tax basis of the leased property is higher than the GAAPbasis in the leased property.  Currently, dividends received from P&WVprovide Power REIT with its sole source of income.

 

2. Summaryof Significant Accounting Policies

Thepreparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates andassumptions that affect certain reported amounts and disclosures.  Accordingly,actual results could differ from those estimates.

 

*Consolidation*. The accompanying unauditedconsolidated financial statements include Power REIT and its wholly-ownedsubsidiary, P&WV. The financial statements have been prepared as if PowerREIT had been historically consolidated with P&WV during the prior annualreporting periods.  All intercompany balances and transactions have beeneliminated in consolidation.

*NetInvestment in Capital Lease*.P&WV’s net investment in capital lease, recognizing renewal options inperpetuity, was estimated to have a current value of $9,150,000 assuming animplicit interest rate of 10%.  

*Cash and Cash Equivalents*.The Trust considers all highly liquid investments with original maturity of three months or less to be cash equivalents.  Cash Equivalents consist of a money market fund reported in the balance sheet at amortized cost, which approximates fair value.

 

*Fair Value*. Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Trust measures its financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

                    

·         Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds.

 

·         Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third party pricing services for identical or comparable assets or liabilities.

 

·         Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

 

In determining fair value, the Trust utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

 

Thecarrying amounts of the Trust’s financial instruments, including cash and cashequivalents, approximate fair value because of their relatively short maturityschedules. Financial assets and liabilities carried at fair value on arecurring basis were as follows:

 

**March31, 2012**

*($in Thousands)*

|                        | **Level 1**   | **Level 2**                                     | **Level 3**                                     | **Total**                       |
|-----------------------------|---------------|-------------------------------------------------|-------------------------------------------------|---------------------------------|
| **Assets**                  |          |                                            |                                            |                            |
| Cash  Equivalents(1)        |   $  894 |      $     - |      $     - |      $  894 |
| Total  Assets at Fair Value |   $  894 |      $     - |      $     - |      $  894 |

___________

 (1)Comprises money market funds, which are included in Cash & Cash Equivalentsin the accompanying balance sheet

 

 

**December31, 2011**

*($in Thousands)*

|                        | **Level 1**  | **Level 2**                                     | **Level 3**                                     | **Total**                 |
|-----------------------------|--------------|-------------------------------------------------|-------------------------------------------------|---------------------------|
| **Assets**                  |         |                                            |                                            |                      |
| Cash  Equivalents(1)        |  $  982 |      $     - |      $     - |     $  982 |
| Total  Assets at Fair Value |  $  982 |      $     - |      $     - |     $  982 |

___________

(1)Comprises money market funds, which are included in Cash & Cash Equivalentsin the accompanying balance sheet

 

Forfinancial assets that utilize Level 1 inputs, the Trust utilizes both directand indirect observable price quotes, including quoted market prices (Level 1inputs).

 

 

 

3. Litigationwith Norfolk Southern Corporation andAdditional Rent owed to P&WV 

PowerREIT and its wholly-owned subsidiary, P&WV, is currently in litigation withNSC (and its sub-lessee) regarding, among other things, certain sales ofP&WV property by NSC and its sub-lessee and rents due from NSC related tosuch sales and reimbursement of P&WV’s legal expenses related thereto.  NSChas continued to make quarterly base cash rent payments to P&WV.  P&WVis actively seeking to protect its contractual rights under the Lease includingthe right to additional payments from the NSC.  NSC is seeking to protect thehistorical status quo and historical treatment of certain transactions and hascontinued to make the base rent payment.  P&WV believes that its primaryexposure to the litigation is the cost of the litigation which P&WVbelieves are recoverable under the lease.  

 

Pursuantto the lease with Norfolk Southern Corporation, P&WV believes NSC isrequired to pay additional rent to P&WV in an amount equal to $83,195,which is the amount that P&WV incurred in legal expenses during the firstquarter defending its contractual rights under the lease. This amount is inaddition to other amounts that are in dispute with NSC or may become due as aresult of continued litigation.  Due to the uncertainty of the currentlitigation, we have not recorded these amounts on the income statement orbalance sheet; however P&WV believes this amount is due to P&WV as rentand continues to pursue its contractual rights in the litigation with NSC.  Dueto the uncertainties and risk related to litigation, there can be no assurancethat the litigation will result in a favorable outcome to P&WV.  Thelitigation was previously disclosed on Power REIT’s annual report filed on Form10-K with the SEC on March 28, 2012 and on current report filed on Form 8-Kwith the SEC on February 16, 2012.  

 

4. Deposits

Duringthe first quarter of 2012, Power REIT placed a $15,000 deposit on a parcel ofland that is intended to be developed as an energy park.  If acquired and fullydeveloped, the energy park is expected to increase cash-flow available to theRegistrant through additional lease payments.  In addition, Power REIT placed a$25,000 deposit with a bank related to a line of credit to finance additionalacquisitions.  Power REIT is still negotiating the final terms of the line ofcredit and there can be no assurance that the financing will be consummated.

 

5. ShelfOffering on Form S-3

On May 11, 2012 the Securities and Exchange Commission (SEC) declared effective Power REIT’s $100 million shelf registration statement on Form S-3. Under the Form S-3, the Company may from time to time issue any combination of common equity or common equity linked securities (warrants, options or units) in any amounts up to an aggregate of $100 million. The net proceeds of offerings are intended to be used to fund new acquisitions consistent with Power REIT’s business plan. The Company does not have any immediate plans to issue securities pursuant to the Form S-3. The terms of any offering of securities made pursuant to the shelf registration statement will be determined at the time of the offering and disclosed in a prospectus supplement filed with the SEC and distributed to prospectus investors.

 

Item2.  MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

 

CAUTIONARYSTATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

ThisQuarterly Report on Form 10-Q includes forward-looking statements within themeaning of Section 27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended. Forward-lookingstatements are those that predict or describe future events or trends and thatdo not relate solely to historical matters. You can generally identify forward-lookingstatements as statements containing the words "believe,""expect," "will," "anticipate,""intend," "estimate," "project,""plan," "assume" or other similar expressions, or negativesof those expressions, although not all forward-looking statements contain theseidentifying words. All statements contained in this report regarding our futurestrategy, future operations, projected financial position, estimated futurerevenues, projected costs, future prospects, the future of our industries andresults that might be obtained by pursuing management's current or future plansand objectives are forward-looking statements.

 

Youshould not place undue reliance on any forward-looking statements because thematters they describe are subject to known and unknown risks, uncertainties andother unpredictable factors, many of which are beyond our control. Ourforward-looking statements are based on the information currently available tous and speak only as of the date of the filing of this report. New risks and uncertaintiesarise from time to time, and it is impossible for us to predict these mattersor how they may affect us. Over time, our actual results, performance orachievements will likely differ from the anticipated results, performance orachievements that are expressed or implied by our forward-looking statements,and such difference might be significant and materially adverse to our securityholders.  Our forward-looking statements contained herein speak only as of thedate hereof, and we make no commitment to update or publicly release anyrevisions to forward-looking statements in order to reflect new information orsubsequent events, circumstances or changes in expectations.

 

MANAGEMENTDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

 

PowerREIT (the “Trust”) is a Maryland real-estate investment trust that is seekingto acquire real-estate related to energy and transportation infrastructureassets.  Its business plan builds upon its current ownership of itswholly-owned subsidiary, the Pittsburgh & West Virginia Railroad(“P&WV”).

 

P&WVowns railroad property in Pennsylvania, West Virginia and Ohio that is leasedto Norfolk Southern Corporation (“NSC”) with a 99-year lease term, withunlimited renewals on the same terms.  Base, cash rental is a fixed amount of$915,000 per year, with no provision for change during the term of the leaseand any renewal periods.  Under the terms of the Lease, Norfolk Southern incursvarious indebtedness obligations to P&WV in return for the right to leaseP&WV’s properties.  Indebtedness increases by (i) an amount equal to theamount of deductions allowable to P&WV, for tax purposes, for depreciationand amortization and (ii) to the extent Lessee elects to receive the proceedsof sales of P&WV’s excess property.  The amount, term and character of theindebtedness owed to P&WV is in dispute (See Part II, Item 1. LegalProceedings).  According to records maintained by NSC, at December 31, 2011 and2010, the principal balance of indebtedness owed to P&WV by Norfolk Southern was $16,236,809 and $15,882,651, respectively.  Because of theindeterminate amount, term and character of the indebtedness, no values havebeen reported in the accompanying financial statement.  

 

AlthoughPower REIT currently derives 100% of its revenue and cash-flow from itsownership of P&WV, Power REIT is seeking to diversify its investmentportfolio and is actively seeking to acquire additional investments.  Duringthe first quarter, Power REIT placed a $15,000 deposit on a parcel of land thatis intended to be developed as an energy park.  If acquired and fullydeveloped, the energy park is expected to increase cash-flow available to theRegistrant.  In addition, Power REIT placed a $25,000 deposit with a bankrelated to a line of credit to finance additional acquisitions.  There can beno assurance that such financing will be consummated.

 

In comparingthe first quarter of 2012 with the preceding fourth quarter of 2011 and thefirst quarter of 2011, revenues totaled $229,000, $229,000, and $229,000,respectively.  Net income and income available for distribution was $47,000, $168,000and $169,000 respectively.  When adjusting for non-recurring legal expensesincurred in the first quarter related to the litigation with Norfolk SouthernCorporation, non-GAAP net income was $130,000, $168,000 and $169,000 during thefirst quarter of 2012, the preceding fourth quarter of 2011 and the firstquarter of 2011, respectively.  Power REIT believes the Non-GAAP presentationof net income is useful information, as the litigation expense incurred in thefirst quarter of 2012 is non-recurring in nature and does not accuratelycapture the recurring financial performance of the company.   Although, thecompany may incur additional non-recurring litigation expenses in subsequentperiods, which will impact GAAP results in those future periods, Power REITbelieves that the expenses are reimbursable under the lease (See Part II, Item1: LEGAL PROCEEDINGS).

 

The Trust'scash outlays, other than dividend payments, are for general and administrative (G&A)expenses, which include professional fees, consultants, office rental and trustee’sfees. PWV’s property is maintained entirely at NSC's expense pursuant to thelease.  The Trust’s expenses increased during the first quarter of 2012 comparedto the fourth quarter of 2011 and first quarter of 2011 primarily due to (i) increasedG&A related to the acquisition of additional energy and transportationinfrastructure assets, (ii) non-recurring litigation expenses of $83,000related to the dispute with NSC and (iii) an increased number of sharesoutstanding in the first quarter of 2012 compared to the first quarter of 2011due to a rights offering that closed at the end of the first quarter of 2011. 

 

RECONCILIATION OF GAAP TONON-GAAP NET INCOME

(Dollars in Thousands)

(Unaudited)

 

 

|                                                                                                                                                             | **Three Months Ended**

**March 31,**                                                            |                                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
|                                                                                                                                                             | 2012                                                                                             | 2011                                                                                                    |
| **NON-GAAP  NET INCOME RECONCILIATION**

** **                                                                                                              |                                                                                             |                                                                                                    |
| Net  Income (GAAP)                                                                                                                                               |          $  47                                           |        $  169                                                             |
| Add  Back:                          |                  |                    |
| Non-Recurring  Litigation Expense                                                                                                                                | **           **83                         | **         **** __-**                                      |
| **Non-GAAP  Net Income**                                                                                                                                         | **          130**                                   | **          169**                                          |
|                                                                                                                                                             |                                                                                             |                                                                                                    |
| **Fully  Diluted, Per Share:**                                                                                                                                   |                                                                                             |                                                                                                    |
|             Net  Income                                                                                   |       $  0.08                                                           |        $ 0.11                                                             |
| **           **Weighted Average Number of  Shares Outstanding                                             | 1,623,250                                                                                        | 1,528,875                                                                                               |
|                                                                                                                                                                  |                                                                                                  |                                                                                                         |  |

 

Amountsmay not add due to rounding. 

 

 

Item3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As asmaller reporting company, we are not required to provide the informationrequired by this Item.

 

Item4.  CONTROLS AND PROCEDURES

 

Managementis responsible for establishing and maintaining effective disclosure controlsand procedures.  As of the end of the period covered by this report, theRegistrant carried out an evaluation under the supervision and with theparticipation of the Registrant's management, including the Chief ExecutiveOfficer and Secretary-Treasurer, of the effectiveness of the design andoperation of the disclosure controls and procedures pursuant to Rule 13a-15under the Securities and Exchange Act of 1934, as amended.  Based on thatevaluation, the Chief Executive Officer and Secretary-Treasurer have concludedthat the Registrant's disclosure controls and procedures are adequate andeffective to ensure that information required to be disclosed in theRegistrant's required SEC filings is recorded, processed, summarized andreported within the time periods specified in the Commission's rules and forms.

 

Therehave been no significant changes in the Registrant's internal controls or inother factors that that could significantly affect internal controls subsequentto the date the Registrant carried out its evaluation.

 

Wemaintain a system of internal control over financial reporting that is designedto provide reasonable assurance that our books and records accurately reflectthe transactions of the Registrant and that our policies and procedures arefollowed.  There have been no changes in our internal control over financialreporting during the period covered by this report that have materiallyaffected, or are reasonable likely to materially affect such controls.

 

 

**PARTII.  OTHER INFORMATION**

 

Item 1. Legal Proceedings

 

PowerREIT and its wholly-owned subsidiary, P&WV, is currently in litigation withNSC (and its sub-lessee) regarding, among other things, certain sales ofP&WV property and rents due from NSC related to such sales.  NSC hascontinued to make quarterly base cash rent payments to P&WV.  P&WV isactively seeking to protect its contractual rights under the Lease includingthe right to additional payments from the NSC.  NSC is seeking to protect thehistorical status quo and historical treatment of certain transactions and hascontinued to make the base rent payment.  P&WV believes that its primaryexposure to the litigation is the cost of the litigation which P&WVbelieves are recoverable under the lease.  If P&WV prevails in thelitigation, it believes that it could be very positive for P&WV.  Due tothe uncertainties and risk related to litigation, there can be no assurancethat the litigation will result in a favorable outcome to P&WV.  Thelitigation was previously disclosed on Power REIT’s annual report filed on Form10-K with the SEC on March 28, 2012 and on current report filed on Form 8-Kwith the SEC on February 16, 2012.  

 

Item1A. Risk Factors

 

TheRegistrant's results of operations and financial condition are subject tonumerous risks and uncertainties described in its definitive registrationstatement on Form S-3/A dated May11, 2012, which risk factors are incorporatedherein by reference. You should carefully consider these risk factors inconjunction with the other information contained in this report. Should any ofthese risks materialize, the Registrant's business, financial condition andfuture prospects could be negatively impacted. 

 

Item2. Unregistered Sales of EquitySECURITIES and Use of Proceeds

 

None.

 

Item3. Defaults UPON SENIORSECURITIES

 

NotApplicable.

 

Item4. MINE SAFETY DISCLOSURES

 

NotApplicable.

 

Item5. Other Information

 

NotApplicable.

 

Item6.  Exhibits

 

Exhibit1.1 The Trust’s Current Reports on Form 8-K filed on February 16, 2012, March9, 2012, April 13, 2012, May 7, 2012 and May 15, 2012 are incorporated byreference.  

 

Exhibit1.2 The Trust’s Current Annual Report on Form 10-K filed on March 28, 2012 isincorporated by reference.

 

Exhibit1.3 The Trust’s Form S-3/A filed with the SEC on May 11, 2012 is incorporatedby reference.

 

Exhibit31.1 Section 302 Certification for David H. Lesser

 

Exhibit31.2 Section 302 Certification for Arun Mittal                                                        

 

Exhibit32 Section 906 Certification for David H. Lesser and Arun Mittal.

 

Exhibit101 The following materials from the Quarterly Report on Form 10-Q for the Registrant,for the quarter ended March 31, 2012, formatted in XBRL (eXtensible BusinessReporting Language): (i) Statement of Income, (ii) Balance Sheet, (iii) Statementof Cash Flows, and (iv) Notes to the Unaudited Financial Statements, tagged asblocks of text.

 

 

**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

 

POWERREIT

 

 

/s/DavidH. Lesser

DavidH. Lesser

Chairmanof the Board &

ChiefExecutive Officer  

 

Date: May 15, 2012

 

 

/s/ArunMittal

ArunMittal

VPBusiness Development, 

Secretary& Treasurer

 

Date:May 15, 2012