Filed Pursuant to Rule 253(g)(2)
File No. 024-11881
IROQUOIS VALLEY FARMLAND REIT, PBC
SUPPLEMENT NO. 4 DATED OCTOBER 31, 2022
TO THE OFFERING CIRCULAR DATED MAY 16, 2022
This document supplements, and should be read in conjunction with, the offering circular of Iroquois Valley Farmland REIT, PBC (“we”, “our”, “us” or the “Company”), dated May 16, 2022, as filed by us with the Securities and Exchange Commission (the “SEC”) on that same date (the “Offering Circular”). Unless otherwise defined in this supplement, capitalized terms used in this supplement shall have the same meanings as set forth in the Offering Circular.
New Share Price
Effective November 1, 2022, the purchase price per share of our common stock in this Offering is now $730. The nearest whole number of shares available to be offered is 81,276.
Determination of Offering Price
On October 21, 2022, the Board of Directors approved a valuation of $730/share as the new price of the common stock of Iroquois Valley Farmland REIT, PBC effective November 1, 2022. The amount reflects a 6.4% increase from the former price of $686/share and an 18.1% increase from $618/share, the price on January 1, 2022.
This new share price reflects the Iroquois Valley Farmland REIT, PBC valuation as of June 30, 2022. All current shareholders’ total stock value now equals the number of shares they own multiplied by this updated share price.
The methodology used to determine this share price is consistent with our historical practice. Here is a synopsis for your review:
| · | The Company obtains the equity value as reported on June 30, 2022 financial statements. This is reflected in the “Book / Cost Basis” column in the table below. We do not believe this represents the market value of our assets and do further analysis to obtain a representative market value. | |
| · | For our owned real estate, our starting point for market value is independent third-party appraisals and valuations. | |
| · | Given that we believe organic farmland is undervalued in most standard appraisals and comparable analyses, we add an incremental value of 5% for farms that are certified organic. | |
| · | We believe the book value of the mortgages represents the current market value given our fixed-rate terms are limited in duration and most loans have floating rate mechanics after the initial fixed period. Additionally, we have included loss reserves in the book value as reported in our financials to capture principal repayment risks. | |
| · | After compiling a market asset value, our board also added a 10% operating company premium. The premium is based, among many things, on: | |
| · | the diversification value of a corporate portfolio, |
| · | our track record of selecting farmland tenants, |
| · | the business relationships that we have developed with generations of farmers, farmer associations, and farmer cooperatives, |
| · | our growth potential, |
| · | our history of innovation in conservation finance and the impact investing space, |
| · | our scalability as a decentralized entity in the high growth organic market, and |
| · | the future earnings potential and economic efficiencies of our REIT structure. |
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The table below outlines various steps and figures associated with our board-approved valuation of $730 per share (fully diluted). The 2021 figures in the table are as of December 31. The 2022 figures are as of June 30.
| 2022 Valuation | ||||||||||||
| 2021 Market | Book / Cost | Market Asset | ||||||||||
| Valuation | Basis | Value | ||||||||||
| Investments in Farmland (1) | $ | 59,166,615 | $ | 55,973,461 | $ | 66,652,140 | ||||||
| Investments in Farmland Mortgages (2) | 19,918,052 | 22,707,214 | 22,707,214 | |||||||||
| Other Assets | 9,924,561 | 7,695,997 | 7,695,997 | |||||||||
| Total Assets | $ | 89,009,228 | $ | 86,376,671 | $ | 97,055,350 | ||||||
| Total Liabilities | $ | 21,072,364 | $ | 22,389,236 | $ | 22,389,236 | ||||||
| Equity Value | $ | 67,936,864 | $ | 63,987,435 | $ | 74,666,114 | ||||||
| Shares Outstanding | 108,820.570 | 112,350.860 | 112,350.860 | |||||||||
| Equity Value per Share | $ | 624 | $ | 570 | $ | 665 | ||||||
| Equity Value per Share (diluted) (3) | $ | 624 | $ | 569 | $ | 664 | ||||||
| Operating Company Premium | $ | 6,793,686 | $ | 7,466,611 | ||||||||
| Adjusted Equity Value (4) | $ | 74,730,550 | $ | 82,132,726 | ||||||||
| Adj. Equity Value per Share | $ | 687 | $ | 731 | ||||||||
| Adj. Equity Value per Share (diluted) | $ | 686 | $ | 730 | ||||||||
Notes:
| (1) | The Organic Premium is captured on an individual property basis within these values. | |
| (2) | Book basis net of allowances for loan losses and reflects estimated market value. Includes lines of credit. | |
| (3) | Diluted share count reflects the effects of option dilution on the value per share calculation. We currently have few options still outstanding and, as a result, the difference between per share and per share (diluted) is minimal in the new price calculation. | |
| (4) | Equals Equity Value plus Operating Company Premium. |
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Important Note Regarding this Determination of Share Price
Please note that our Board of Directors has determined the share price on the basis outlined herein. This price, while based on management’s best estimate of the market value of our assets, and consistent with our recent valuation practices, may not bear any relationship to what our assets or shares would sell for in an open market or in the event of a liquidation. There is generally no public market for our shares. Because the share price is not based upon any public market valuation, the price may be different than the proceeds that you would receive upon liquidation or a resale of your shares if they were to be listed on an exchange or actively traded by broker-dealers.
While we have historically valued our share price annually, it is our intent to begin updating our share price at least twice per year, typically in the fall and the spring. It is our hope that this will allow current shareholders to maintain a more precise valuation of their holdings and will allow us to ensure that our offering, stock redemptions, and dividend reinvestment terms are all more accurate and up to date.
Our Use of this Share Valuation
The recently approved share price is also used for our Dividend Reinvestment Program (the “DRIP”) and to determine the repurchase price of shares under our Stock Redemption Program, at such time that the Company offers to redeem shares under that program.
Directors and Officers
Board of Directors
On August 26, 2022, the Company held its 2022 annual meeting of the stockholders (the “2022 Annual Meeting”) to, among other things, elect 4 directors to the Company’s Board of Directors.
The following individuals were elected as Directors at the 2022 Annual Meeting for the term of office indicated beside their names.
| Name | Position | Age | Term of Office | |||||||||
| Andy Ambriole | Director | 34 | Aug 2022-2025 | |||||||||
| Dorothy D. Burlin | Director | 55 | Aug 2022-2024 | |||||||||
| Dr. Stephen P. Rivard | Director | 70 | Aug 2022-2025 | |||||||||
| Olivia Watkins | Director | 28 | Aug 2022-2025 | |||||||||
Biographies of Mr. Ambriole, Ms. Burlin, and Dr. Rivard are included in the Offering Circular, as amended. A biography of Olivia Watkins is as follows:
Olivia Watkins
Ms. Watkins is a social entrepreneur and impact investor. For the past seven years, she has financed, developed, and operated environmental and social projects across the US. She currently serves as a co-founder and President of Black Farmer Fund, a non-profit impact investing organization creating sustainable and equitable food systems by investing in Black farmers and food businesses of NY. She also serves as a board member for Sustainable Agriculture & Food Systems Funders and previously for Soul Fire Farm Institute. Prior to founding Black Farmer Fund in 2017, Olivia worked in several production roles at Soul Fire Farm Institute and Kahumana Organic Farms, leveraging her environmental biology background to manage and grow environmentally regenerative and socially impactful business operations.
Ms. Watkins has an MBA from North Carolina State University in Financial Management, and a BA from Barnard College, Columbia University in Environmental Biology. She was also recognized on the 2021 Forbes 30 under 30 Social Impact list and The Grist 50.
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Committees of the Board of Directors
In addition to the Finance & Audit Committee and Investment Committee, the Board has formed the Farmer Sustainability Committee and the Governance & Board Development Committee.
The four standing committees of the Board are:
| Committee | Chair | Additional Members |
| Farmer Sustainability Committee | Andy Ambriole* | Anna Jones-Crabtree, David E. Miller*, Claire Mesesan* |
| Finance & Audit Committee (1) | Joe Mantoan(2) | Arnold W. Lau*, Mark D. Schindel*, Christopher Zuehlsdorff* |
| Governance & Board Development Committee | D.D. Burlin | Anna Jones-Crabtree, Malaika Maphalala, Dr. Stephen P. Rivard, Joe Mantoan |
| Investment Committee | Christopher Zuehlsdorff* | Mark D. Schindel*, Donna Holmes*, Arnold W. Lau*, Andy Ambriole*, Olivia Watkins |
*Served as an officer or employee during the last completed fiscal year.
| (1) | The Finance & Audit Committee performs similar functions to a compensation committee, among other responsibilities. This committee is advisory to the Board of Directors, carefully reviewing and considering matters, including compensation, and making recommendations to the Board for approval. | |
| (2) | Mr. Mantoan serves as a director of Healing Soils Foundation. See the section of the Offering Circular titled “Conflicts of Interest.” |
Charters for the Farmer Sustainability, Finance & Audit, and Governance & Board Development Committees are currently being finalized for approval by the Board.
Executive Management Team
Christopher Zuehlsdorff joined the Company as the Chief Operating Officer on July 25, 2022. Arnold W. Lau, formerly Chief Operating Officer, is now Chief Administrative Officer. A biography of Christopher Zuehlsdorff is as follows:
Christopher Zuehlsdorff
Chris serves as Chief Operating Officer at Iroquois Valley, where he combines his investment management experience and personal background in support of the strategic vision of the organization. Prior to joining Iroquois Valley, Chris was Senior Managing Director and Co-Head of Global Investments at EnTrust Global, an alternative investment firm based in New York. He was a member of the Management Committee and the Global Investment Committee. As a senior investment professional, Chris covered most asset classes and investment strategies across both public and private markets.
Chris grew up on a family dairy farm in Minnesota and maintained an interest in food and agriculture throughout his career. Since 2016, Chris has been a board member at The Glynwood Center for Regional Food and Farming, a non-profit organization supporting regional food and farming in New York’s Hudson Valley.
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Chris graduated with an MBA in Finance and Accounting from Carnegie Mellon University in 2003 and a BA in Economics and Mathematics from Saint Olaf College in 1998. He is a CFA® Charterholder. Chris and his family reside in Westchester County, NY. Outside of work, Chris enjoys traveling, gardening and hiking with his wife, three sons, and dog, Bruce.
| EXECUTIVE MANAGEMENT TEAM | |||
| Name | Position | Background | Experience |
| Bill Stoddart | CEO | Social Finance | 30 years |
| Mark D. Schindel | CFO | Private Equity | 32 years |
| Christopher Zuehlsdorff | COO | Investment Management | 20 years |
| Arnold Lau | Chief Administrative Officer | Trading & LLC Management | 37 years |
| Donna Holmes | SVP, Investor Relations | Finance and law | 31 years |
| Claire Mesesan | VP, Farmer Relations | Farming and Communications | 8 years |
Executive Officers and Significant Employees
| IROQUOIS VALLEY FARMS LLC | |||
| Name | Position | Age | Start of Term |
| Bill Stoddart | Chief Executive Officer | 55 | 7/11/22 |
| Mark D. Schindel | Chief Financial Officer | 59 | 4/23/19 |
| Christopher Zuehlsdorff | Chief Operating Officer | 47 | 7/25/22 |
| Arnold W. Lau | Chief Administrative Officer | 62 | 7/25/22 |
| Donna Holmes | Sr Vice President, Investor Relations | 61 | 6/7/21 |
| Claire Mesesan | Vice President, Farmer Relations | 30 | 8/17/15 |
| IROQUOIS VALLEY FARMLAND REIT, PBC | |||
| Name | Position | ||
| Bill Stoddart | Chief Executive Officer | ||
| Mark D. Schindel | Treasurer | ||
| Donna Holmes | Secretary and Sr. Vice President, Investor Relations | ||
| IROQUOIS VALLEY FARMLAND TRS, INC. | |||
| Name | Position | ||
| Bill Stoddart | President | ||
| Mark D. Schindel | Treasurer | ||
| Donna Holmes | Secretary | ||
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Security Ownership of Management
The following table shows, as of October 26, 2022, the amount of our common stock beneficially owned by our directors and named executive officers individually and as a group. Each person named in the table has sole voting and investment power with respect to all of the shares of our common stock shown as beneficially owned by such person. The address of each named person is c/o Iroquois Valley Farmland REIT, PBC, P.O. Box 5850, Evanston, Illinois 60204. No common shares beneficially owned by any director or executive officer have been pledged as security for a loan.
| Officers and Directors | Shares (1) | % Ownership |
| Dr. Stephen Rivard | 1,719 | 1.48% |
| David Miller (2) | 1,371 | 1.18% |
| Arnold Lau | 500 | 0.43% |
| Dorothy Burlin | 35 | 0.03% |
| Joseph Mantoan | 25 | 0.02% |
| Dr. Anna Jones-Crabtree | 17 | 0.01% |
| All officers and directors as a group (2) | 3,667 | 3.15% |
| (1) | Percentage of beneficial ownership is based upon 116,386 shares of Iroquois Valley REIT’s common stock outstanding as of October 26, 2022. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options and warrants currently exercisable or convertible, or exercisable or convertible within 60 days, are deemed outstanding for determining the number of shares beneficially owned and for computing the percentage ownership of the person holding such options but are not deemed outstanding for computing the percentage ownership of any other person. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which he or she has no economic interest. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. | |
| (2) | Shares owned by Mr. Miller, as well as total shares of all officers and directors as a group, include ownership of options to purchase common stock held by these individuals, in compliance with the SEC’s definition of beneficial ownership (described in footnote 1 above). As of October 26, 2022, Mr. Miller owned options to purchase 600 shares of common stock. For details on the terms of these options, including applicable expiration dates and strike prices, see the section of the Offering Circular titled “Management Compensation.” |
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Policies With Regards to Certain Activities
Stock Redemption Program
There have been updates to the Company’s Stock Redemption Program as of October 21, 2022. The Stock Redemption Program was updated for clarity and ease of administration, and to better accommodate redemption periods twice per year, concurrently with the Company intention to determine the share price twice per year. The updated Stock Redemption Program is attached as Exhibit 3.1.
Exhibits
| 3.1** | Stock Redemption Program dated October 21, 2022 |
** Filed herewith
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Exhibit 3.1
Iroquois Valley Farmland
REIT, PBC (the “Company”)
Stock Redemption Program
Dated as of: October 21, 2022
| 1. | Purpose. The purpose of the Stock Redemption Program is to provide limited liquidity for the Company’s stockholders (under the conditions and limitations set forth below). Without the Stock Redemption Program, stockholders in the Company would generally be required to hold their shares of common stock for an indefinite time period because (a) there is no established trading market for the shares, (b) the Company does not anticipate that a secondary trading market for the shares will develop, and (c) the Company does not have a pre-established liquidation date or other anticipated liquidity event (such as listing the shares on a securities exchange, merger with a publicly traded company or sale in a privately negotiated transaction.) |
| 2. | Participation. The Stock Redemption Program is open to all stockholders. |
| 3. | 5 Year Minimum Holding Period. Stockholders must have held the shares of common stock to be redeemed for at least 5 years to redeem such shares in the Stock Redemption Program. Any shares issued to a stockholder as a result of participation in the Company’s Dividend Reinvestment Program shall be considered held since the date that the original shares resulting in the dividend were purchased, not the date of the dividend itself. | |
| 4. | Minimum Redemption Amount. Stockholders must redeem a minimum of 20 shares of common stock to participate in the Stock Redemption Program. If a stockholder owns less than 20 shares, the stockholder may participate so long as the stockholder redeems all of the shares that they own. | |
| 5. | Timing. The Stock Redemption Program is intended to remain in place indefinitely for the life of the Company unless modified or suspended by the Board of Directors (the “Board”), in the Board’s sole discretion. Stockholders can tender their shares of common stock at any time during a redemption period. Each redemption period will be held open for at least 20 days. Offers of repurchases under the terms of the Stock Redemption Program will be made at least once every 18 months; however, the Company plans to open a redemption period for repurchase approximately every 6 months, typically coinciding with updates to the Company’s share valuation announcements. | |
| 6. | Repurchase Price. The repurchase price will be based on the current Board-approved price for shares of the Company’s common stock. At no time will the repurchase price offered by the Company exceed the current Board-approved price. No premium will be paid by the Company for the shares repurchased under the Stock Redemption Program (as compared with the current Board-approved price for shares of the Company’s common stock). The repurchase price will be the same for all shares redeemed during a given redemption period. The repurchase price will be paid in cash. | |
| 7. | Number of Shares Repurchased by the Company. The number of shares to be repurchased by the Company under each redemption will be (a) at least 2.5% and (b) no more than 5% of the number of shares of common stock of the Company outstanding as of the record date of the applicable redemption period. All shares of common stock redeemed by the Company through the Stock Redemption Program will be cancelled and returned to the status of authorized but unissued shares. | |
| 8. | Oversubscription. If Company stockholders seek to redeem more shares than are offered by the Board for redemption in a given redemption period, the Company will make redemptions to stockholders on a pro rata basis. For shares not redeemed due to oversubscription, shareholders must submit a new request for redemption in a subsequent redemption period. | |
| 9. | Disclosure. All material information relating to the Stock Redemption Program will be fully and timely disclosed (a) to the Company’s stockholders and (b) in the Company’s Regulation A+, Tier II offering materials. Modifications, suspensions, or terminations of the Stock Redemption Program will be promptly disclosed in a Current Report filed with the SEC prior to the effective date of the modification, suspension, or termination. |
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| 10. | Non-Solicitation. Stockholders desiring to submit for redemption all or a portion of their shares of common stock will do so of their own volition and not at the behest of, invitation, or encouragement of the Company. The role of the Company in effectuating redemptions under the Stock Redemption Program will be ministerial. | |
| 11. | Stockholder Withdrawal Rights. Stockholders may withdraw any request for redemption at any time in writing delivered to the Company prior to the end of the applicable redemption period. | |
| 12. | No Trading Market. The Company is structured as a perpetual entity and has no current plans to list its shares of common stock on an exchange or other trading market. No established regular trading market for the Company’s shares of common stock currently exists. The Stock Redemption Program will be terminated if the Company’s shares of common stock are listed on a national securities exchange or included for quotation in a national securities market, or in the event a secondary market for the Company’s shares of common stock develops. | |
| 13. | Board of Director Approval. The Board will approve and adopt the Stock Redemption Program, amendments to the Stock Redemption Program, and each redemption thereunder. A determination by the Board to terminate, amend, or suspend the Stock Redemption Program will require the affirmative vote of a majority of the members of the Board. | |
| 14. | Regulatory Compliance. The Stock Redemption Program is intended to allow the Company to make repurchases of shares of its common stock in a manner that such redemptions do not constitute an issuer tender offer subject to the Exchange Act Rule 13e-4. Furthermore, the Stock Redemption Program is also intended to be exempt from Rule 102 of Regulation M to permit the Company to repurchase its shares of common stock while the Company is engaged in a distribution of shares of common stock. The Company intends to take action requested by the SEC to be in conformity with the foregoing. |
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