10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40771

GENERATION INCOME PROPERTIES, INC.

(Exact name of Registrant as specified in its charter)


Maryland	47-4427295
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

401 E. Jackson Street Suite 3300 Tampa, FL	33602
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: 813-448-1234

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading symbol	Name of each exchange on which registered
Common Stock par value $0.01 per share	GIPR	The Nasdaq Stock Market LLC
Warrants to purchase Common Stock	GIPRW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.:


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☑	Smaller reporting company	☑

		Emerging growth company	☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The registrant had 2,617,588 shares of Common Stock, par value $0.01 per share, outstanding as of August 8, 2023.

GENERATION INCOME PROPERTIES, INC.

TABLE OF CONTENTS


		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Generation Income Properties, Inc. Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	3

	Generation Income Properties, Inc. Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	4

	Generation Income Properties, Inc. Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)	5

	Generation Income Properties, Inc. Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (unaudited)	6
	Notes to Unaudited Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

SIGNATURES		37

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements GENERATION INCOME PROPERTIES, INC.

Consolidated Balance Sheets


	As of June 30,			As of December 31,
	2023			2022
	(unaudited)
Assets
Investments in real estate
Land	$	12,577,544		$	12,577,544
Building and site improvements		39,772,590			39,764,890
Tenant improvements		907,382			907,382
Acquired lease intangible assets		4,387,526			4,677,928
Less: accumulated depreciation and amortization		(6,441,616	)		(5,623,318	)
Net real estate investments	$	51,203,426		$	52,304,426
Investment in tenancy-in-common		1,247,679			1,218,268
Cash and cash equivalents		2,105,392			3,718,496
Restricted cash		34,500			34,500
Deferred rent asset		319,528			288,797
Prepaid expenses		533,446			132,642
Accounts receivable		125,299			96,063
Escrow deposits and other assets		285,287			184,241
Right of use asset, net		6,190,529			6,232,662
Total Assets	$	62,045,086		$	64,210,095

Liabilities and Equity
Liabilities
Accounts payable	$	242,855		$	173,461
Accrued expenses		379,508			365,624
Accrued expense - related party		506,000			128,901
Acquired lease intangible liabilities, net		537,618			639,973
Insurance payable		239,301			46,368
Deferred rent liability		232,550			251,798
Lease liability, net		6,365,937			6,356,288
Other payable - related party		2,262,300			2,587,300
Loan payable - related party		1,500,000			1,500,000
Mortgage loans, net of unamortized debt issuance costs of $659,651 and $717,381 at June 30, 2023 and December 31, 2022, respectively		34,958,848			35,233,878
Total liabilities	$	47,224,917		$	47,283,591

Redeemable Non-Controlling Interests	$	6,343,042		$	5,789,731

Stockholders' Equity
Common stock, $0.01 par value, 100,000,000 shares authorized; 2,617,538 and 2,501,644 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	$	26,175		$	25,016
Additional paid-in capital		18,870,576			19,307,518
Accumulated deficit		(10,839,825	)		(8,640,796	)
Total Generation Income Properties, Inc. Stockholders' Equity	$	8,056,926		$	10,691,738

Non-Controlling Interest	$	420,201		$	445,035
Total equity	$	8,477,127		$	11,136,773

Total Liabilities and Equity	$	62,045,086		$	64,210,095

The accompanying notes are an integral part of these unaudited consolidated financial statements.

GENERATION INCOME PROPERTIES, INC.

Consolidated Statements of Operations

(unaudited)


	Three Months ended June 30,						Six Months ended June 30,
	2023			2022			2023			2022
Revenue
Rental income	$	1,318,750		$	1,378,562		$	2,645,457		$	2,560,497
Other income		10,128			541			20,460			541
Total revenue	$	1,328,878		$	1,379,103		$	2,665,917		$	2,561,038

Expenses
General and administrative expense	$	358,989		$	472,736		$	703,136		$	814,416
Building expenses		320,255			325,201			633,855			578,592
Depreciation and amortization		558,001			558,676			1,115,551			989,569
Interest expense, net		466,751			375,627			935,961			705,921
Compensation costs		282,719			310,698			634,006			590,440
Total expenses	$	1,986,715		$	2,042,938		$	4,022,509		$	3,678,938
Operating loss		(657,837	)		(663,835	)		(1,356,592	)		(1,117,900	)
Other expense		-			-			(506,000	)	$	-
Income (loss) on investment in tenancy-in-common		15,009			(1,462	)		29,411			7,090
Dead deal expense		(109,569	)		(107,371	)		(109,569	)		(107,371	)
Loss on debt extinguishment		-			(144,029	)		-			(144,029	)
Net loss	$	(752,397	)	$	(916,697	)	$	(1,942,750	)	$	(1,362,210	)
Less: Net income attributable to non-controlling interests		129,065			130,181			256,279			260,144
Net loss attributable to Generation Income Properties, Inc.	$	(881,462	)	$	(1,046,878	)	$	(2,199,029	)	$	(1,622,354	)

Total Weighted Average Shares of Common Stock Outstanding – Basic & Diluted		2,615,471			2,255,441			2,578,678			2,224,419

Basic & Diluted Loss Per Share Attributable to Common Stockholders	$	(0.34	)	$	(0.46	)	$	(0.85	)	$	(0.73	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

GENERATION INCOME PROPERTIES, INC.

Consolidated Statements of Changes in Equity

(unaudited)


	Common Stock				Additional Paid-In Capital			Accumulated Deficit			Stockholders' Equity			Non-Controlling Interest			Total Equity			Redeemable Non-Controlling Interest
	Shares		Amount
Balance, December 31, 2021		2,172,950	$	21,729	$	19,051,929		$	(5,403,156	)	$	13,670,502		$	469,712		$	14,140,214		$	9,134,979
Restricted stock unit compensation		47,142		471		93,455			-			93,926			-			93,926			-
Stock issuance costs		-		-		(6,091	)		-			(6,091	)		-			(6,091	)		-
Cashless exercise of warrants		27,676		277		(277	)		-			-			-			-			-
Issuance of Redeemable Non-Controlling Interest for property acquisition		-		-		-			-			-			-			-			1,109,570
Distribution on Non-Controlling Interest		-		-		-			-			-			(3,938	)		(3,938	)		(115,303	)
Dividends paid on common stock		-		-		(334,799	)		-			(334,799	)		-			(334,799	)		-
Net (loss) income for the quarter		-		-		-			(575,476	)		(575,476	)		(1,120	)		(576,596	)		131,083
Balance, March 31, 2022		2,247,768	$	22,477	$	18,804,217		$	(5,978,632	)	$	12,848,062		$	464,654		$	13,312,716		$	10,260,329
Restricted stock unit compensation		357		4		124,114			-			124,118			-			124,118			-
Cashless exercise of warrants		9,662		96		(96	)		-			-			-			-			-
Redemption of Redeemable Non-Controlling Interest		-		-		-			-			-			-			-			(406,652	)
Distribution on Non-Controlling Interest		-		-		-			-			-			(3,938	)		(3,938	)		(118,556	)
Dividends paid on common stock		-		-		(343,254	)		-			(343,254	)		-			(343,254	)		-
Net (loss) income for the quarter									(1,046,878	)		(1,046,878	)		(4,329	)		(1,051,207	)		134,510
Balance, June 30, 2022		2,257,787	$	22,577	$	18,584,981		$	(7,025,510	)	$	11,582,048		$	456,387		$	12,038,435		$	9,869,631

Balance, December 31, 2022		2,501,644	$	25,016	$	19,307,518		$	(8,640,796	)	$	10,691,738		$	445,035		$	11,136,773		$	5,789,731
Restricted stock unit compensation		98,593		986		89,662			-			90,648			-			90,648			-
Cashless exercise of warrants		10,648		106		(106	)		-			-			-			-			-
Issuance of Redeemable Non-Controlling Interest		-		-		-			-			-			-			-			3,000,000
Redemption of Redeemable Non-Controlling Interest		-		-		-			-			-			-			-			(2,479,299	)
Distribution on Non-Controlling Interest		-		-		-			-			-			(2,844	)		(2,844	)		(115,817	)
Dividends paid on common stock		-		-		(297,479	)		-			(297,479	)		-			(297,479	)		-
Net (loss) income for the quarter		-		-		-			(1,317,567	)		(1,317,567	)		(4,908	)		(1,322,475	)		132,122
Balance, March 31, 2023		2,610,885	$	26,108	$	19,099,595		$	(9,958,363	)	$	9,167,340		$	437,283		$	9,604,623		$	6,326,737
Restricted stock unit compensation		-		-		77,039			-			77,039			-			77,039			-
Cashless exercise of warrants		6,653		67		(67	)		-			-			-			-			-
Issuance of Redeemable Non-Controlling Interest		-		-		-			-			-			-			-			-
Redemption of Redeemable Non-Controlling Interest		-		-		-			-			-			-			-			-
Distribution on Non-Controlling Interest		-		-		-			-			-			(2,844	)		(2,844	)		(126,998	)
Dividends paid on common stock		-		-		(305,991	)		-			(305,991	)		-			(305,991	)		-
Net (loss) income for the quarter		-		-		-			(881,462	)		(881,462	)		(14,238	)