10/30/2024 | Press release | Distributed by Public on 10/30/2024 14:39
TABLE OF CONTENTS
Per
share
|
Total
|
|||||
Public offering price
|
$
|
$
|
||||
Underwriting discount
|
$
|
$
|
||||
Proceeds to us, before expenses
|
$
|
$
|
||||
Wells Fargo Securities
|
BofA Securities
|
J.P. Morgan
|
||||
BMO Capital Markets
|
KeyBanc Capital Markets
|
||
TABLE OF CONTENTS
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS SUPPLEMENT
|
S-iii
|
||
MARKET AND INDUSTRY DATA
|
S-iii
|
||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
S-iv
|
||
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
|
S-vi
|
||
PROSPECTUS SUPPLEMENT SUMMARY
|
S-1
|
||
RISK FACTORS
|
S-6
|
||
USE OF PROCEEDS
|
S-9
|
||
SUPPLEMENTAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
|
S-10
|
||
UNDERWRITING
|
S-12
|
||
LEGAL MATTERS
|
S-16
|
||
EXPERTS
|
S-16
|
||
WHERE YOU CAN FIND MORE INFORMATION
|
S-16
|
||
ABOUT THIS PROSPECTUS
|
ii
|
||
WHERE YOU CAN FIND MORE INFORMATION
|
iv
|
||
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
|
v
|
||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
vi
|
||
CARETRUST REIT, INC. AND THE CO-REGISTRANTS.
|
1
|
||
RISK FACTORS
|
2
|
||
SUPPLEMENTAL SUBSIDIARY ISSUER INFORMATION
|
3
|
||
USE OF PROCEEDS
|
4
|
||
DESCRIPTION OF CAPITAL STOCK
|
5
|
||
DESCRIPTION OF WARRANTS
|
17
|
||
DESCRIPTION OF RIGHTS
|
19
|
||
DESCRIPTION OF UNITS
|
20
|
||
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES OF DEBT SECURITIES
|
21
|
||
U.S. FEDERAL INCOME TAX CONSIDERATIONS
|
23
|
||
SELLING SECURITYHOLDERS
|
41
|
||
PLAN OF DISTRIBUTION
|
42
|
||
LEGAL MATTERS
|
44
|
||
EXPERTS
|
44
|
||
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;
|
•
|
the ability and willingness of our borrowers to satisfy their obligations and service their outstanding indebtedness under the loans we have issued to them;
|
•
|
the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect;
|
•
|
the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial condition of our tenants;
|
•
|
the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them;
|
•
|
the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant;
|
•
|
the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms;
|
•
|
the ability to generate sufficient cash flows to service our outstanding indebtedness;
|
•
|
access to debt and equity capital markets;
|
•
|
fluctuating interest rates;
|
•
|
the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics;
|
•
|
the ability to retain our key management personnel;
|
•
|
the ability to maintain our status as a REIT;
|
•
|
changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs;
|
•
|
risks related to any forward sale agreements entered into in connection with our at-the-market offering program, including our intention to physically settle any forward sale agreement;
|
•
|
other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and
|
•
|
other factors affecting our business or the businesses of our tenants that are beyond our or their control.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
our Annual Report on Form 10-K for the year ended December 31, 2023 (filed with the SEC on February 8, 2024);
|
•
|
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024 (filed with the SEC on May 2, 2024, August 2, 2024 and October 29, 2024, respectively);
|
•
|
the portions of our Definitive Proxy Statement on Schedule 14A filed with the SEC on March 8, 2024 that are incorporated by reference into Part III of our Annual Report on Form 10-K for the year ended December 31, 2023;
|
•
|
our Current Reports on Form 8-K filed with the SEC on April 29, 2024, May 6, 2024, August 29, 2024 and October 29, 2024; and
|
•
|
the description of our common stock, par value $0.01 per share, contained in Exhibit 4.5 of our Annual Report on Form 10-K for the year ended December 31, 2019 (filed with the SEC on February 20, 2020), which updated the description thereof contained in our Registration Statement on Form 10 initially filed with the SEC on November 7, 2013 (File No. 001-36181), including any amendments or reports filed for the purpose of updating such description.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
(1)
|
The number of shares of common stock to be outstanding immediately after this offering excludes:
|
•
|
506,178 shares of our common stock issuable upon vesting of performance-based restricted stock units (assuming the maximum number of shares potentially issuable in connection with the awards), which are outstanding under The CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan as of September 30, 2024.
|
•
|
3,479,964 shares of our common stock available for future grants and reserved for issuance under The CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan as of September 30, 2024.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
"business combination" provisions that, subject to limitations, prohibit certain business combinations between us and an "interested stockholder" (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special appraisal rights and special stockholder voting requirements on these combinations; and
|
•
|
"control share" provisions that provide that "control shares" of our company (defined as shares which, when aggregated with other shares owned by the acquiring person or in respect of which the acquiring person is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiring person to exercise one of three increasing ranges of voting power in electing directors) acquired in a "control share acquisition" (defined as the direct or indirect acquisition of ownership or control of "control shares") have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
|
•
|
a shift in our investor base;
|
•
|
our quarterly or annual earnings, or those of other comparable companies;
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
our ability to obtain financing as needed, including through potential future equity or debt issuances;
|
•
|
issuances of additional equity securities, including through our "at-the-market" equity offering program;
|
•
|
increases in market interest rates, which may lead investors in our common stock to demand a higher yield, and would result in increased interest expense on our debt;
|
•
|
changes in laws and regulations affecting our business;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
announcements by us or our competitors of significant investments, acquisitions or dispositions;
|
•
|
the failure of securities analysts to cover our common stock;
|
•
|
changes in earnings estimates by securities analysts or our ability to meet those estimates;
|
•
|
the operating performance and stock price of other comparable companies;
|
•
|
changes in our dividend policy;
|
•
|
impairment charges affecting the carrying value of one or more of our investments;
|
•
|
issuances of additional equity securities, including pursuant to this offering, or sales of our common stock by directors or our management team;
|
•
|
overall market fluctuations; and
|
•
|
general economic or political conditions and other external factors.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
Underwriter
|
Number of Shares
|
||
Wells Fargo Securities, LLC
|
|||
BofA Securities, Inc.
|
|||
J.P. Morgan Securities LLC.
|
|||
BMO Capital Markets Corp.
|
|||
KeyBanc Capital Markets Inc.
|
|||
Total
|
11,500,000
|
||
Per Share
|
Total Without
Option
Exercised
|
Total With
Option
Exercised
|
|||||||
Public Offering Price
|
$
|
$
|
$
|
||||||
Underwriting discount
|
$
|
$
|
$
|
||||||
Proceeds (before expenses) to us
|
$
|
$
|
$
|
||||||
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
|
•
|
to fewer than 150, natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), as permitted under the Prospectus Regulation, subject to obtaining the prior consent of the relevant dealer or dealers nominated by the issuer for any such offer; or
|
•
|
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
|
TABLE OF CONTENTS
(1)
|
if we are a CIS and are marketed by a person who is an authorized person under FSMA, (a) investment professionals falling within Article 14(5) of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) Order 2001, as amended (the "CIS Promotion Order") or (b) high net worth companies and other persons falling within Article 22(2)(a) to (d) of the CIS Promotion Order; or
|
(2)
|
otherwise, if marketed by a person who is not an authorized person under FSMA, (a) persons who fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order") or (b) Article 49(2)(a) to (d) of the Financial Promotion Order; and
|
(3)
|
in both cases (i) and (ii) to any other person to whom it may otherwise lawfully be made (all such persons together being referred to as "relevant persons").
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
shares of common stock;
|
•
|
shares of preferred stock;
|
•
|
warrants to purchase common stock and/or preferred stock;
|
•
|
rights to purchase common stock and/or preferred stock; and
|
•
|
units consisting of two or more of these classes or series of securities.
|
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
|
ii
|
||
WHERE YOU CAN FIND MORE INFORMATION
|
iv
|
||
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
|
v
|
||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
vi
|
||
CARETRUST REIT, INC. AND THE CO-REGISTRANTS
|
1
|
||
RISK FACTORS
|
2
|
||
SUPPLEMENTAL SUBSIDIARY ISSUER INFORMATION
|
3
|
||
USE OF PROCEEDS
|
4
|
||
DESCRIPTION OF CAPITAL STOCK
|
5
|
||
DESCRIPTION OF WARRANTS
|
17
|
||
DESCRIPTION OF RIGHTS
|
19
|
||
DESCRIPTION OF UNITS
|
20
|
||
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES OF DEBT SECURITIES
|
21
|
||
U.S. FEDERAL INCOME TAX CONSIDERATIONS
|
23
|
||
SELLING SECURITYHOLDERS
|
41
|
||
PLAN OF DISTRIBUTION
|
42
|
||
LEGAL MATTERS
|
44
|
||
EXPERTS
|
44
|
||
TABLE OF CONTENTS
•
|
references in this prospectus to "CareTrust REIT," "Company," "we," "us" and "our" refer to CareTrust REIT, Inc. and its consolidated subsidiaries;
|
•
|
references in this prospectus to "Operating Partnership" refer to CTR Partnership, L.P.;
|
•
|
references in this prospectus to "CareTrust Capital" refer to CareTrust Capital Corp.; and
|
•
|
references in this prospectus to the "Subsidiary Guarantors" refer to, collectively, 160 North Patterson, LLC, 18th Place Health Holdings LLC, 49th Street Health Holdings LLC, 4th Street Holdings LLC, 51st Avenue Health Holdings LLC, Anson Health Holdings LLC, Arapahoe Health Holdings LLC, Arrow Tree Health Holdings LLC, Avenue N Holdings LLC, Big Sioux River Health Holdings LLC, Boardwalk Health Holdings LLC, Bogardus Health Holdings LLC, Burley Healthcare Holdings LLC, CareTrust GP, LLC, Casa Linda Retirement LLC, Cedar Avenue Holdings LLC, CM Health Holdings LLC, Cherry Health Holdings LLC, Cottonwood Health Holdings LLC, CTR Arvada Preferred, LLC, CTR Cascadia Preferred, LLC, Dallas Independence LLC, Dixie Health Holdings LLC, Emmett Healthcare Holdings LLC, Ensign Bellflower LLC, Ensign Highland LLC, Ensign Southland LLC, Everglades Health Holdings LLC, Expo Park Health Holdings LLC, Expressway Health Holdings LLC, Falls City Health Holdings LLC, Fifth East Holdings LLC, Fig Street Health Holdings LLC, Flamingo Health Holdings LLC, Fort Street Health Holdings LLC, Gazebo Park Health Holdings LLC, Gillette Park Health Holdings LLC, Golfview Holdings LLC, Granada Investments LLC, Guadalupe Health Holdings LLC, Gulf Coast Buyer 1 LLC, Hillendahl Health Holdings LLC, Hillview Health Holdings LLC, Irving Health Holdings LLC, Ives Health Holdings LLC, Jefferson Ralston Holdings LLC, Jordan Health Properties LLC, Josey Ranch Healthcare Holdings LLC, Kings Court Health Holdings LLC, Lafayette Health Holdings LLC, Lemon
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
our Annual Report on Form 10-K for the year ended December 31, 2022 (filed with the SEC on February 9, 2023);
|
•
|
the portions of our Definitive Proxy Statement on Schedule 14A that are incorporated by reference into Part III of our Annual Report on Form 10-K for the year ended December 31, 2021 (filed with the SEC on March 18, 2022); and
|
•
|
the description of our common stock, par value $0.01 per share, contained in Exhibit 4.5 of our Annual Report on Form 10-K for the year ended December 31, 2019 (filed with the SEC on February 20, 2020), which updated the description thereof contained in our Registration Statement on Form 10 initially filed with the SEC on November 7, 2013 (File No. 001-36181), and any amendments or reports filed for the purpose of updating such description.
|
TABLE OF CONTENTS
•
|
the impact of possible additional surges of COVID-19 infections or the risk of other pandemics, epidemics or infectious disease outbreaks, measures taken to prevent the spread of such outbreaks and the related impact on our business or the businesses of our tenants;
|
•
|
the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;
|
•
|
the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect;
|
•
|
the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them;
|
•
|
the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant;
|
•
|
the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms;
|
•
|
the ability to generate sufficient cash flows to service our outstanding indebtedness;
|
•
|
access to debt and equity capital markets;
|
•
|
fluctuating interest rates and inflation;
|
•
|
the ability to retain our key management personnel;
|
•
|
the ability to maintain our status as a real estate investment trust ("REIT");
|
•
|
changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs;
|
•
|
other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and
|
•
|
other factors affecting our business or the businesses of our tenants that are beyond our or their control.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
the title, designation, number of shares and stated value of the preferred stock;
|
•
|
the price at which the preferred stock will be issued;
|
•
|
the dividend rates, if any (or method of calculation), whether that rate is fixed or variable or both, and the dates on which dividends will be payable, whether those dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends will begin to cumulate;
|
•
|
the dates on which the preferred stock will be subject to redemption and the applicable redemption prices;
|
•
|
any redemption or sinking fund provisions;
|
•
|
the convertibility or exchangeability of the preferred stock;
|
•
|
if other than United States dollars, the currency or currencies (including composite currencies) in which the preferred stock is denominated and/or in which payments will or may be payable;
|
•
|
the method by which amounts in respect of the preferred stock may be calculated and any commodities, currencies or indices, or the value, rate or price relevant to that calculation;
|
•
|
the place where dividends and other payments on the preferred stock are payable and the identity of the transfer agent, registrar and dividend disbursement agent for the preferred stock;
|
•
|
any listing of the preferred stock on any securities exchange; and
|
•
|
any additional dividend, liquidation, redemption, preemption, sinking fund, voting and other rights, preferences, privileges, limitations and restrictions.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
any person from beneficially or constructively owning shares of our stock to the extent such beneficial or constructive ownership would result in us being "closely held" under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT;
|
•
|
any person from transferring shares of our stock if the transfer would result in shares of our stock being beneficially owned by fewer than 100 persons;
|
•
|
any person from beneficially owning or constructively owning shares of our stock to the extent such ownership would result in us failing to qualify as a "domestically controlled qualified investment entity," within the meaning of Section 897(h) of the Code;
|
•
|
any person from beneficially or constructively owning shares of our stock to the extent such beneficial or constructive ownership would cause us to own, beneficially or constructively, 9.9% or more of the ownership interests in a tenant (other than a "taxable REIT subsidiary" of ours (as such term is defined in Section 856(l) of the Code)) of our real property within the meaning of Section 856(d)(2)(B) of the Code; and
|
•
|
any person from beneficially or constructively owning shares of our stock to the extent such beneficial or constructive ownership would cause any "eligible independent contractor" that operates a "qualified health care property" on behalf of a "taxable REIT subsidiary" of ours (as such terms are defined in Sections 856(d)(9)(A), 856(e)(6)(D)(i) and 856(l) of the Code, respectively) to fail to qualify as such.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation's outstanding voting stock; or
|
•
|
an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
|
•
|
80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and
|
•
|
two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder, voting together as a single class.
|
TABLE OF CONTENTS
•
|
one-tenth or more but less than one-third;
|
•
|
one-third or more but less than a majority; or
|
•
|
more than 50%.
|
•
|
a classified board;
|
•
|
a two-thirds vote requirement for removing a director;
|
•
|
a requirement that the number of directors be fixed only by vote of the directors;
|
•
|
a requirement that a vacancy on the board be filled only by the affirmative vote of a majority of the remaining directors in office and such director shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualified; and
|
•
|
a majority requirement for the calling of a special meeting of stockholders.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty;
|
•
|
the director or officer actually received an improper personal benefit in money, property or services; or
|
•
|
in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
the title of the warrants;
|
•
|
the price or prices at which the warrants will be issued;
|
•
|
the designation, amount and terms of the securities for which the warrants are exercisable;
|
•
|
the designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued with each other security;
|
•
|
the aggregate number of warrants offered;
|
•
|
any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;
|
•
|
the price or prices at which the securities purchasable upon exercise of the warrants may be purchased;
|
•
|
if applicable, the date on and after which the warrants and the securities purchasable upon exercise of the warrants will be separately transferable;
|
•
|
a discussion of any material U.S. federal income tax considerations applicable to the holding and/or exercise of the warrants;
|
•
|
the date on which the right to exercise the warrants will commence, and the date on which the right will expire;
|
•
|
the maximum or minimum number of warrants that may be exercised at any time;
|
•
|
information with respect to book-entry procedures, if any; and
|
•
|
any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
the date for determining the persons entitled to participate in the rights distribution;
|
•
|
the aggregate number or amount of underlying securities purchasable upon exercise of the rights and the exercise price;
|
•
|
the aggregate number of rights being issued;
|
•
|
the date, if any, on and after which the rights may be transferable separately;
|
•
|
the date on which the right to exercise the rights commences and the date on which the right expires;
|
•
|
the number of rights outstanding, if any;
|
•
|
a discussion of any material or special U.S. federal income tax considerations applicable to the rights; and
|
•
|
any other terms of the rights, including the terms, procedures and limitations relating to the distribution, exchange and exercise of the rights.
|
TABLE OF CONTENTS
•
|
the date, if any, on and after which the units may be transferable separately;
|
•
|
whether we will apply to have the units traded on a securities exchange or securities quotation system;
|
•
|
a discussion of any material or special U.S. federal income tax considerations applicable to the units; and
|
•
|
how, for U.S. federal income tax purposes, the purchase price paid for the units is to be allocated among the component securities.
|
TABLE OF CONTENTS
•
|
the title;
|
•
|
the principal amount being offered, and, if a series, the total amount authorized and the total amount outstanding;
|
•
|
any limit on the aggregate principal amount that may be issued;
|
•
|
whether or not the debt securities will be issued by one or both of the issuers;
|
•
|
whether or not the issuers will issue the series of debt securities in global form and, if so, the identity of the depositary and the terms and conditions, if any, upon which interests in the debt securities may be exchanged;
|
•
|
the maturity date(s);
|
•
|
the principal amount due at maturity, and whether the debt securities will be issued with any original
|
•
|
issue discount;
|
•
|
the interest rate(s), which may be fixed or variable, or the method for determining the rate, the date from which interest will accrue, the dates interest will be payable and the regular record dates for interest payable on any interest payment date;
|
•
|
whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
|
•
|
the place where payments will be payable;
|
•
|
the date, if any, after which, the terms and conditions upon which, and the price at which the issuers may, at their option, in whole or in part, redeem the series of debt securities pursuant to any optional or provisional redemption provisions, and any other applicable terms of those redemption provisions;
|
•
|
provisions for a sinking fund, purchase or other analogous fund, if any;
|
•
|
whether or not the debt securities will be guaranteed, including by CareTrust REIT, and the terms of any such guarantee;
|
TABLE OF CONTENTS
•
|
the events of default and covenants relevant to the debt securities, including the inapplicability of any event of default or covenant set forth in the indenture relating to the debt securities, or the applicability of any other events of defaults or covenants in addition to the events of default or covenants set forth in the indenture relating to the debt securities;
|
•
|
the denominations in which the issuers will issue the series of debt securities, if other than denominations of $2,000 and any integral multiples of $1,000 in excess thereof;
|
•
|
if other than U.S. dollars, the currency in which the series of debt securities will be denominated; and
|
•
|
any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, and any terms which may be required by the issuers or advisable under applicable laws or regulations or advisable in connection with the marketing of the debt securities.
|
TABLE OF CONTENTS
•
|
financial institutions;
|
•
|
insurance companies;
|
•
|
broker-dealers;
|
•
|
regulated investment companies;
|
•
|
partnerships, other pass-through entities and trusts;
|
•
|
persons who hold our stock on behalf of other persons as nominees;
|
•
|
persons who receive our stock as compensation;
|
•
|
persons holding our stock as part of a "straddle," "hedge," "conversion transaction," "synthetic security" or other integrated investment;
|
•
|
persons who are subject to alternative minimum tax;
|
•
|
tax-exempt organizations; and
|
•
|
foreign investors.
|
TABLE OF CONTENTS
•
|
We will be taxed at regular corporate rates on any undistributed net taxable income, including undistributed net capital gains.
|
•
|
For taxable years prior to January 1, 2018, we may be subject to the "alternative minimum tax" on our items of tax preference, including any deductions of net operating losses.
|
•
|
If we have net income from prohibited transactions, which are, in general, sales or other dispositions of inventory or property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax. See "-Prohibited Transactions" and "-Foreclosure Property."
|
TABLE OF CONTENTS
•
|
If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as "foreclosure property," we may thereby avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction), but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate (currently 21%).
|
•
|
If we fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below, but nonetheless maintain our qualification to be taxed as a REIT because we satisfy other requirements, we will be subject to a 100% tax on an amount based on the magnitude of the failure, as adjusted to reflect the profit margin associated with our gross income.
|
•
|
If we violate the asset tests (other than certain de minimis violations) or other requirements applicable to REITs, as described below, and yet maintain our qualification to be taxed as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subject to a penalty tax. In that case, the amount of the penalty tax will be at least $50,000 per failure, and, in the case of certain asset test failures, will be determined as the amount of net income generated by the non-qualifying assets in question multiplied by the highest corporate tax rate (currently 21%) if that amount exceeds $50,000 per failure.
|
•
|
If we fail to distribute during each calendar year at least the sum of (1) 85% of our ordinary income for such year, (2) 95% of our capital gain net income for such year and (3) any undistributed net taxable income from prior periods, we will be subject to a nondeductible 4% excise tax on the excess of the required distribution over the sum of (a) the amounts that we actually distributed and (b) the amounts we retained and upon which we paid income tax at the corporate level.
|
•
|
We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the composition of a REIT's stockholders, as described below in "-Requirements for Qualification-General."
|
•
|
A 100% tax may be imposed on transactions between us and a taxable REIT subsidiary ("TRS") that do not reflect arm's-length terms.
|
•
|
If after the effective date of our election to be subject to tax as a REIT, we acquire appreciated assets from a corporation that is not a REIT (i.e., a corporation taxable under subchapter C of the Code) in a transaction in which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of the subchapter C corporation, we may be subject to tax on such appreciation at the highest corporate income tax rate then applicable if we subsequently recognize gain on a disposition of any such assets during the five-year period following their acquisition from the subchapter C corporation.
|
•
|
The earnings of our TRSs will generally be subject to U.S. federal corporate income tax.
|
(1)
|
that is managed by one or more trustees or directors;
|
(2)
|
the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;
|
(3)
|
that would be taxable as a domestic corporation but for its election to be subject to tax as a REIT;
|
(4)
|
that is neither a financial institution nor an insurance company subject to specific provisions of the Code;
|
(5)
|
the beneficial ownership of which is held by 100 or more persons;
|
TABLE OF CONTENTS
(6)
|
in which, during the last half of each taxable year, not more than 50% in value of the outstanding stock is owned, directly or indirectly, by five or fewer "individuals" (as defined in the Code to include specified tax-exempt entities); and
|
(7)
|
that meets other tests described below, including with respect to the nature of its income and assets.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
The amount of rent is not based in whole or in part on the income or profits of any person. However, an amount we receive or accrue will generally not be excluded from the term "rents from real property" solely because it is based on a fixed-percentage or percentages of receipts or sales;
|
•
|
Neither we nor an actual or constructive owner of 10% or more of our stock actually or constructively owns 10% or more of the interests in the assets or net profits of a noncorporate tenant, or, if the tenant is a corporation (but excluding any TRS), 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock of the tenant. Rents we receive from such a tenant that is a TRS of ours, however, will not be excluded from the definition of "rents from real property" as a result of this condition if at least 90% of the space at the property to which the rents relate is leased to third parties, and the rents paid by the TRS are substantially comparable to rents paid by our other tenants for comparable space. Whether rents paid by a TRS are substantially comparable to rents paid by other tenants is determined at the time the lease with the TRS is entered into, extended, and modified, if such modification increases the rents due under such lease. Notwithstanding the foregoing, however, if a lease with a "controlled TRS" is modified and such modification results in an increase in the rents payable by such TRS, any such increase will not qualify as "rents from real property." For purposes of this rule, a "controlled TRS" is a TRS in which the parent REIT owns stock possessing more than 50% of the voting power or more than 50% of the total value of the outstanding stock of such TRS. In addition, rents we receive from a tenant that also is our TRS will not be excluded from the definition of "rents from real property" as a result of our ownership interest in the TRS if the property to which the rents relate is a qualified lodging facility or a qualified health care property, and such property is operated on behalf of the TRS by a person who is an independent contractor and certain other requirements are met. Our TRSs will be subject to U.S. federal income tax on their income from the operations of these properties;
|
•
|
Rent attributable to personal property that is leased in connection with a lease of real property is not greater than 15% of the total rent received under the lease. If this condition is not met, then the portion of the rent attributable to personal property will not qualify as "rents from real property"; and
|
•
|
We generally do not operate or manage the property or furnish or render services to our tenants, subject to a 1% de minimis and except as provided below. We are permitted, however, to perform directly certain services that are "usually or customarily rendered" in connection with the rental of space for occupancy only and are not otherwise considered "rendered to the occupant" of the property. Examples of these permitted services include the provision of light, heat or other utilities, trash removal and general maintenance of common areas. In addition, we are permitted to employ an independent contractor from whom we derive no revenues (a "TRS"), which may be wholly or partially owned by us, to provide non-customary services to our tenants without causing the rent that we receive from those tenants to fail to qualify as "rents from real property."
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
(1)
|
the sum of
|
(a)
|
90% of our REIT taxable income, computed without regard to our net capital gains and the deduction for dividends paid; and
|
(b)
|
90% of our after tax net income, if any, from foreclosure property (as described below);
|
(2)
|
minus
|
(a)
|
the excess of the sum of specified items of noncash income over 5% of our REIT taxable income, computed without regard to our net capital gain and the deduction for dividends paid.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
an individual who is a citizen or resident of the United States;
|
•
|
a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, or of any state thereof, or the District of Columbia;
|
TABLE OF CONTENTS
•
|
an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
|
•
|
a trust if a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. fiduciaries have the authority to control all substantial decisions of the trust.
|
•
|
income retained by the REIT in the prior taxable year on which the REIT was subject to corporate level income tax (less the amount of tax);
|
•
|
dividends received by the REIT from TRSs or other taxable C corporations; or
|
•
|
income in the prior taxable year from sales of "built-in gain" property acquired by the REIT from C corporations in carryover basis transactions (less the amount of corporate tax on such income).
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
•
|
directly to one or more purchasers, including through a specific bidding, auction or other process;
|
•
|
to investors through agents;
|
•
|
directly to agents;
|
•
|
to or through brokers or dealers;
|
•
|
to the public through underwriting syndicates led by one or more managing underwriters;
|
•
|
to one or more underwriters acting alone for resale to investors or to the public;
|
•
|
through a combination of any such methods of sale; or
|
•
|
any other method permitted pursuant to applicable law.
|
•
|
the method of distribution, including the name or names of any underwriters, dealers or agents and the amounts of securities underwritten or purchased by each of them, if any;
|
•
|
the purchase price of the securities and the proceeds to us from the sale;
|
•
|
any over-allotment options under which the underwriters may purchase additional securities from us;
|
•
|
any underwriting discounts and other items constituting compensation to underwriters, dealers or agents;
|
•
|
any public offering price;
|
•
|
any discounts or concessions allowed or reallowed or paid to dealers; or
|
•
|
any securities exchange or market on which the securities offered in the prospectus supplement may be listed.
|
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS