Stewards Inc.
08/25/2026 | Press release | Distributed by Public on 08/25/2026 13:37
Material Event (Form 8-K)
Item 8.01 Other Events.
On June 5, 2026, Stewards Real Estate, LLC (the "Buyer"), a wholly owned subsidiary of Stewards, Inc. (the "Company"), entered into a Purchase and Sale Agreement (the "Purchase Agreement") with John E. Swenson Co., Inc. (the "Seller"), an unaffiliated third party, to acquire the real property and related tangible assets known as The Hawthorne, located at 196 Shore Road, Chatham, Massachusetts, for a purchase price of $20.0 million in cash, subject to customary prorations and adjustments. The Purchase Agreement provides for a $1.0 million earnest-money deposit (the "Deposit") to be held by Gilmartin Magence LLP as escrow agent. The Purchase Agreement originally provided for a July 1, 2026 closing and stated that time was of the essence.
Thereafter, three written instruments were executed that purported to amend the Purchase Agreement and successively extend the closing date, ultimately stating a closing date of August 10, 2026, with time remaining of the essence. The parties continued to discuss a possible further extension and prepared drafts and language after August 10, 2026, but no further written amendment was executed.
On August 18, 2026, counsel for the Seller delivered written notice to the Buyer asserting that the Buyer failed to perform by the August 10, 2026 closing date, declaring the Buyer in default under the Purchase Agreement, claiming that the Seller is entitled to retain the Deposit pursuant to Paragraph 25 of the Purchase Agreement, and requesting the return of certain original closing documents previously delivered to Buyer's counsel. Paragraph 25 provides that, upon a Buyer default, the Deposit may be retained by the Seller as liquidated damages and as the Seller's sole remedy at law and in equity.
The Seller's August 18 notice did not state that the Purchase Agreement was terminated. The Company does not believe that the Purchase Agreement has been terminated, and no termination of the Purchase Agreement is being reported in this Current Report on Form 8-K.
The Company and the Buyer dispute the alleged default and the Seller's asserted entitlement to the Deposit. On August 18, 2026, the Buyer delivered written notice of a dispute concerning the Deposit and advised the escrow agent that the Buyer does not authorize any release or disbursement of the Deposit. Under Paragraph 24 of the Purchase Agreement, in the event of a disagreement between the parties, the escrow agent is required to retain the Deposit pending mutual written instructions from the Seller and the Buyer or a final order of a court of competent jurisdiction.
The Seller has asserted a claim to the $1.0 million Deposit. The Company and the Buyer dispute that any termination payment or penalty has been incurred and are pursuing their available contractual, legal and equitable rights and remedies, which may include litigation. The Company cannot presently predict the outcome of the dispute.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which was previously filed as Exhibit 2.12 to Amendment No. 4 to the Company's Registration Statement on Form S-1 (File No. 333-291586), filed with the Securities and Exchange Commission on June 12, 2026, and is incorporated herein by reference.
The Company previously disclosed that it expected to complete the Hawthorne acquisition, subject to customary closing conditions and financing requirements. In light of the dispute described above, there can be no assurance that the acquisition will be completed, that the Purchase Agreement will be determined to remain enforceable, or that the Deposit will be recovered in whole or in part. Any prior statements concerning the expected timing of the closing should no longer be relied upon.
The dispute and its resolution could result in legal expenses, delay or prevent the acquisition, require an impairment or write-off of all or a portion of the Deposit, and adversely affect the Company's liquidity, financial condition and results of operations. The Company will provide additional disclosure regarding material developments as appropriate.
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