SCHEDULE: Power REIT Preferred Stockholders Demand Trustee Election

A group of Power REIT preferred stockholders, collectively holding over 10% of Series A Preferred Stock, have formally demanded a special meeting to elect two new trustees due to unpaid dividends.

Summary

• A group of investors, including Bradley & Daytona Railway and Land Co. LLC, Alexander Kachmar, D & C Cacciapaglia Living Trust, David Cacciapaglia Family Trust, and David Cacciapaglia, have formed a voting group to exercise their rights as holders of Power REIT's Series A Cumulative Redeemable Perpetual Preferred Stock.
• This group collectively holds approximately 11.1% of the outstanding Series A Preferred Stock, based on 336,944 shares outstanding as of March 31, 2026.
• The demand for a special meeting is triggered by Power REIT's failure to pay dividends on the Series A Preferred Stock for over six quarterly periods, as disclosed in their Form 10-K filed on March 31, 2026.
• As per Section 8(a) of the Articles Supplementary, preferred stockholders holding at least 10% of the outstanding shares can request a special election meeting for the purpose of electing two trustees to the Board of Trustees.
• The group has nominated Alexander Kachmar and David Cacciapaglia as their trustee nominees for this election.
• The demand letter, dated May 26, 2026, requests Power REIT to call the special meeting, establish a record date, provide notice, and confirm procedures for the nomination and election of trustees.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative development, primarily due to the company's failure to meet its dividend obligations, which has necessitated this shareholder action.

Positives

• The formation of a voting group demonstrates organized action by preferred stockholders to assert their rights.
• The group collectively holds over 10% of the Series A Preferred Stock, meeting the threshold required to trigger a special meeting for trustee elections.
• The demand for a special meeting is a direct exercise of contractual rights outlined in the Articles Supplementary, indicating a proactive approach to corporate governance.
• Nomination of specific individuals (Alexander Kachmar and David Cacciapaglia) provides clear candidates for the preferred stockholder trustee positions.

Negatives

• Power REIT has failed to pay dividends on its Series A Cumulative Redeemable Perpetual Preferred Stock for over six quarterly periods, indicating financial distress or mismanagement.
• The need to demand a special meeting suggests a lack of proactive engagement from the company's current board regarding the preferred stockholders' rights and the dividend arrears.

Risks

• The ongoing failure to pay dividends on the Series A Preferred Stock poses a significant financial risk to the preferred stockholders.
• Potential for protracted disputes or legal challenges regarding the election process or the company's governance.
• The company's strategic direction and operational stability may be impacted by the governance changes resulting from the trustee election.

Future Outlook

The filing indicates that the reporting persons may continue to communicate with each other, the Issuer, the Board of Trustees, other stockholders, and interested parties regarding the preferred stockholder election process, governance, operations, capitalization, strategic direction, and future plans of the Issuer. They reserve the right to formulate future plans or proposals.

Management Comments

• The undersigned submits this demand on behalf of the following five separate beneficial owners: Bradley & Daytona Railway and Land Co. LLC, Alexander Kachmar, D & C Cacciapaglia Living Trust, U/A DTD 02/01/2013, David Cacciapaglia Family Trust, U/A DTD 11/25/2020, and David Cacciapaglia (collectively the Requesting Holders) of shares of the 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock of Power REIT (the Series A Preferred Stock).
• On behalf of the Requesting Holders demand is hereby made that Power REIT (the Trust) call a special meeting of holders of the Series A Preferred Stock pursuant to Section 8(a) of the Articles Supplementary governing the Series A Preferred Stock (the Articles Supplementary).
• As disclosed by the Trust in its Annual Report on Form 10-K filed March 31, 2026 for the fiscal year ended December 31, 2025: [t]he Trust has failed to pay dividends for in excess of six quarterly periods Accordingly, the voting rights provided under Section 8(a) of the Articles Supplementary have become operative, including the right of the holders of the Series A Preferred Stock, voting as a single class, to elect two (2) additional trustees to the Board of Trustees.
• The Requesting Holders hereby nominate Alexander Kachmar and David Cacciapaglia for election as the additional trustees contemplated by Section 8(a) of the Articles Supplementary.
• The Requesting Holders reserve the right to substitute or nominate additional candidates as permitted by the governing organizational documents and applicable law.
• Nothing contained herein shall constitute a waiver of any rights, claims, remedies or causes of action possessed by the Requesting Holders, all of which are expressly reserved, including without limitation rights relating to accrued and unpaid dividends, governance rights, fiduciary obligations, redemption rights, conversion rights, disclosure obligations, and all other rights arising under the Articles Supplementary, organizational documents, applicable law, or otherwise.

Industry Context

StockSavvy.ai notes that this filing highlights a common governance mechanism in preferred stock structures where dividend defaults can trigger enhanced voting rights, including the election of board members. This action by a significant block of preferred stockholders suggests a potential dissatisfaction with the current board's handling of financial obligations and corporate governance, particularly concerning dividend payments.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders (Series A Preferred): Directly impacted by the company's failure to pay dividends and the potential for improved governance through new trustee representation.
• Board of Trustees: May see a change in composition if the preferred stockholders' nominees are elected, potentially altering board dynamics and decision-making.
• Common Stockholders: May be indirectly impacted by changes in board composition and governance, which could affect the company's strategic direction and financial performance.

Next Steps

• Power REIT is expected to respond to the demand for a special meeting.
• The company will need to establish procedures and a timeline for the nomination and election of the two additional trustees.
• A special meeting of Series A Preferred Stockholders will likely be called.
• Alexander Kachmar and David Cacciapaglia are nominated to be elected as trustees.

Key Dates

Recommendation

The filing indicates a significant governance issue stemming from unpaid preferred dividends, leading to a demand for trustee elections. While this shows preferred stockholders asserting their rights, it also highlights underlying financial strain at Power REIT. The outcome of the trustee election and the company's ability to address dividend arrears are key factors. A 'hold' recommendation is appropriate pending further clarity on the company's financial recovery and the impact of potential board changes.

Keywords

Power REIT, Schedule 13D, Series A Preferred Stock, Preferred Stockholders, Dividend Arrears, Trustee Election, Corporate Governance, Voting Group, Articles Supplementary, SEC Filing