Item 1.01. Entry into a Material Definitive Agreement.
On January 16, 2020, IIP-AZ 1 LLC ("Landlord"), a wholly owned subsidiary of IIP
Operating Partnership, LP, the operating partnership subsidiary of Innovative
Industrial Properties, Inc. (the "Company"), entered into an amendment (the
"Lease Amendment") to its lease (the "Lease") with SGS Arizona, LLC (formerly
known as Sun Grown Solutions, LLC, "Tenant") for the property located at 5900
West Greenhouse Drive in Willcox, Arizona (the "Property").
The Lease Amendment provides for reimbursement by Landlord to Tenant of up to an
additional $2.0 million for completion of certain additional tenant improvements
at the Property (the "Additional TI Allowance"). If Landlord funds the full
amount of the Additional TI Allowance, Landlord's total investment in the
Property is expected to be $20.0 million. The provision of the Additional TI
Allowance also resulted in a corresponding adjustment of base rent under the
Lease Amendment.
The Lease Amendment also extends the initial term of the Lease to December 15,
2037, and provides for a guaranty of the Lease by The Pharm, LLC.
The foregoing description of the Lease Amendment does not purport to be complete
and is qualified in its entirety by reference to the complete text of the Lease
Amendment, which is filed as an exhibit to this report and incorporated herein
by reference.
Item 8.01. Other Events.
Recent Sales of Common Stock
During the period beginning on November 8, 2019 and ending on (and including)
December 31, 2019, the Company issued and sold, under its previously announced
"at-the-market" equity offering program (the "ATM Program"), a total of 782,200
shares of its common stock at an average sale price of $77.52 per share and
raised aggregate gross proceeds of approximately $60.6 million before deducting
expenses and commissions. Commissions of approximately $1.2 million were paid to
the agent making the sales during such period, resulting in net proceeds to the
Company of approximately $59.4 million.
During the period beginning on January 1, 2020 and ending on (and including)
January 17, 2020, the Company issued and sold under the ATM Program a total of
973,282 shares of its common stock at an average sale price of $79.96 per share
and raised aggregate gross proceeds of approximately $77.8 million before
deducting expenses and commissions. Commissions of approximately $1.5 million
were paid to the agent making the sales during such period, resulting in net
proceeds to the Company of approximately $76.3 million.
The sales were completed pursuant to an equity distribution agreement (the
"Sales Agreement") between the Company and BTIG, LLC, dated September 20, 2019,
a form of which was filed as an exhibit to a Current Report on Form 8-K filed
with the Securities and Exchange Commission (the "SEC") on September 20, 2019.
The shares sold under the Sales Agreement were issued and sold pursuant to the
Company's shelf registration statement on Form S-3 (File No 333-233311),
previously filed with the SEC on August 15, 2019, and declared effective by the
SEC on August 28, 2019. A prospectus supplement related to the Company's ATM
Program was also filed with the SEC on September 20, 2019. This Current Report
on Form 8-K does not constitute and shall not constitute an offer to sell or the
solicitation of an offer to buy shares of the Company's common stock, nor shall
there be any sale of shares of the Company's common stock in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or
other jurisdiction.
As of January 17, 2020, there were 13,597,691 shares of common stock of the
Company, par value $0.001 per share, outstanding.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description of Exhibit
10.1 First Amendment dated January 16, 2020 to Lease Agreement dated
December 15, 2017 between IIP-AZ 1 LLC and SGS Arizona, LLC.
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