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 September 30, 2024


☐	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 5,423,188 shares of Common Stock, par value $0.01 per share, outstanding as of November 1, 2024.

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 September 30, 2024 (unaudited) and December 31, 2023	3

	Generation Income Properties, Inc. Consolidated Statements of Operations Three and Nine Months Ended September 30, 2024 and September 30, 2023 (unaudited)	4

	Generation Income Properties, Inc. Consolidated Statements of Changes in Equity, Redeemable Preferred Stock, and Redeemable Non-Controlling Interests for the Nine Months Ended September 30, 2024 and September 30, 2023 (unaudited)	5

	Generation Income Properties, Inc. Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and September 30, 2023 (unaudited)	9
	Notes to Unaudited Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION	42

Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 3.	Defaults Upon Senior Securities	42

Item 4.	Mine Safety Disclosures	42

Item 5.	Other Information	42

Item 6.	Exhibits	43

SIGNATURES		45

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Generation Income Properties, Inc. Consolidated Balance Sheets


	As of September 30,			As of December 31,
	2024			2023
	(unaudited)
Assets
Investments in real estate
Land	$	23,268,037		$	21,996,902
Building and site improvements		67,618,615			71,621,499
Acquired tenant improvements		2,380,920			2,072,205
Acquired lease intangible assets		10,501,756			10,571,331
Less: accumulated depreciation and amortization		(11,070,036	)		(8,855,332	)
Net real estate investments		92,699,292			97,406,605
Cash and cash equivalents		1,547,110			3,117,446
Restricted cash		34,500			34,500
Deferred rent asset		435,767			1,106,191
Prepaid expenses		270,626			139,941
Accounts receivable		164,549			241,166
Escrow deposits and other assets		982,637			493,393
Held for sale assets		5,750,250			-
Right of use asset, net		6,088,025			6,152,174
Total Assets	$	107,972,756		$	108,691,416

Liabilities and Equity
Liabilities
Accounts payable	$	79,297		$	406,772
Accrued expenses		1,383,743			688,146
Accrued expense - related party		683,347			683,347
Acquired lease intangible liabilities, net		1,026,681			1,016,260
Insurance payable		150,450			34,966
Deferred rent liability		155,968			260,942
Lease liability, net		6,452,484			6,415,041
Other payable - related party		452,460			1,809,840
Loan payable - related party		5,500,000			5,500,000
Mortgage loans, net of unamortized debt discount of $1,156,620 and $1,326,362 at September 30, 2024 and December 31, 2023, respectively, and debt issuance costs		58,551,152			56,817,310
Derivative liabilities		809,339			537,424
Total liabilities		75,244,921			74,170,048

Redeemable Non-Controlling Interests		26,135,796			18,812,423

Preferred Stock - Series A Redeemable Preferred stock, net,
$0.01 par value, 2,400,000 shares authorized, no shares issued or outstanding as of September 30, 2024 and 2,400,000 shares issued and outstanding at December 31, 2023 with liquidation preferences of $5 per share		-			11,637,616

Stockholders' Equity
Common stock, $0.01 par value, 100,000,000 shares authorized; 5,419,855 and 2,620,707 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		54,232			26,207
Additional paid-in capital		29,129,543			18,472,049
Accumulated deficit		(22,984,596	)		(14,833,058	)
Total Generation Income Properties, Inc. Stockholders' Equity		6,199,179			3,665,198

Non-Controlling Interest		392,861			406,131
Total equity		6,592,040			4,071,329

Total Liabilities and Equity	$	107,972,756		$	108,691,416

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 September 30,						Nine Months ended September 30,
	2024			2023			2024			2023
Revenue
Rental income	$	2,326,980		$	1,841,044		$	6,850,092		$	4,486,501
Other income		73,302			3,104			242,598			23,564
Total revenue		2,400,282			1,844,148			7,092,690			4,510,065

Expenses
General and administrative expense		577,565			530,538			1,632,018			1,233,674
Building expenses		729,062			431,359			2,067,356			1,065,214
Depreciation and amortization		1,068,081			981,419			3,474,918			2,096,970
Interest expense, net		1,098,608			770,624			3,142,489			1,706,585
Compensation costs		296,399			346,196			816,605			980,202
Total expenses		3,769,715			3,060,136			11,133,386			7,082,645
Operating loss		(1,369,433	)		(1,215,988	)		(4,040,696	)		(2,572,580	)
Other expense		-			(639	)		-			(506,639	)
Loss on derivative valuation		(734,116	)		-			(308,570	)		-
Income on investment in tenancy-in-common		-			3,362			-			32,773
Dead deal expense		-			-			(35,873	)		(109,569	)
Loss on held for sale asset valuation		-			-			(1,058,994	)		-
Net loss		(2,103,549	)		(1,213,265	)		(5,444,133	)		(3,156,015	)
Less: Net income attributable to non-controlling interests		866,047			425,637			2,612,405			681,916
Net loss attributable to Generation Income Properties, Inc.		(2,969,596	)		(1,638,902	)		(8,056,538	)		(3,837,931	)
Less: Preferred stock dividends		-			190,000			95,000			190,000
Net loss attributable to common shareholders		(2,969,596	)		(1,828,902	)		(8,151,538	)		(4,027,931	)
Other comprehensive income:
Gain on change in fair value of derivative instrument		-			78,969			-			78,969
Comprehensive loss attributable to common shareholders	$	(2,969,596	)	$	(1,749,933	)	$	(8,151,538	)	$	(3,948,962	)


Total Weighted Average Shares of Common Stock Outstanding – Basic & Diluted		5,433,833			2,618,077			5,083,640			2,591,956

Basic & Diluted Loss Per Share Attributable to Common Stockholders	$	(0.55	)	$	(0.70	)	$	(1.60	)	$	(1.55	)

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

Generation Income Properties, Inc. Consolidated Statements of Changes in Equity, Redeemable Preferred Stock, and Redeemable Non-Controlling Interests

(unaudited)


	Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Income	Accumulated Deficit			Stockholders' Equity			Non-Controlling Interests			Total Equity			Redeemable Preferred Stock		Redeemable Non-Controlling Interests
	Shares		Amount
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 compensation		98,593		986		89,662				-			90,648			-			90,648			-		-
Cashless exercise of warrants		10,648		106		(106	)			-			-			-			-			-		-
Issuance of Redeemable Non-Controlling Interests		-		-		-				-			-			-			-			-		3,000,000
Redemption of Redeemable Non-Controlling Interests		-		-		-				-			-			-			-			-		(2,479,299	)
Distribution on Non-Controlling Interests		-		-		-				-			-			(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 compensation		-		-		77,039				-			77,039			-			77,039			-		-
Cashless exercise of warrants		6,653		67		(67	)			-			-			-			-			-		-
Issuance of Redeemable Non-Controlling Interests		-		-		-				-			-			-			-			-		-
Redemption of Redeemable Non-Controlling Interests		-		-		-				-			-			-			-			-		-
Distribution on Non-Controlling Interests		-		-		-				-			-			(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	)		(895,700	)		-		143,303
Balance, June 30, 2023		2,617,538	$	26,175	$	18,870,576			$	(10,839,825	)	$	8,056,926		$	420,201		$	8,477,127		$	-	$	6,343,042
Restricted stock compensation		-		-		119,380				-			119,380			-			119,380			-		-


Cashless exercise of warrants	1,694		17		(17	)				-			-			-			-			-			-
Issuance of Preferred Stock	-		-		-					-			-			-			-			11,637,616			-
Issuance of Redeemable Non-Controlling Interests	-		-		-					-			-			-			-			-			14,100,000
Redemption of Redeemable Non-Controlling Interests	-		-		-					-			-			-			-			-			(2,100,000	)
Distribution on Non-Controlling Interests	-		-		-					-			-			(2,844	)		(2,844	)					(345,219	)
Dividends on preferred stock	-		-							-						-						(190,000	)		-
Dividends paid on common stock					(306,322	)							(306,322	)					(306,322	)
Other comprehensive income	-		-		-			78,969		-			78,969			-			78,969			-			-
Net (loss) income for the quarter	-		-		-			-		(1,828,902	)		(1,828,902	)		(1,099	)		(1,830,001	)		190,000			426,736
Balance, September 30, 2023	2,619,232	$	26,192	$	18,683,616		$	78,969	$	(12,668,727	)	$	6,120,051		$	416,258		$	6,536,309		$	11,637,616		$	18,424,559
Balance, December 31, 2023	2,620,707	$	26,207	$	18,472,049		$	-	$	(14,833,058	)	$	3,665,198		$	406,131		$	4,071,329		$	11,637,616		$	18,812,423
Restricted stock compensation	-		-		94,935			-		-			94,935			-			94,935			-			-
Stock issuance costs	-		-		(61,938	)		-		-			(61,938	)		-			(61,938	)		-			-
Cashless exercise of warrants	4,551		46		(46	)		-		-			-			-			-			-			-
Conversion of preferred stock to Common stock	2,794,597		27,946		11,609,670			-		-			11,637,616			-			11,637,616			(11,637,616	)		-
Distribution on Non-Controlling Interests	-		-		-			-		-			-			(2,844	)		(2,844	)		-			(267,833	)
Dividends on preferred stock	-		-		-			-		-			-			-			-			(95,000	)		-
Dividends paid on common stock	-		-		(525,106	)		-		-			(525,106	)		-			(525,106	)		-			-
Net (loss) income for the period	-		-		-			-		(2,920,220	)		(2,920,220	)		(7,582	)		(2,927,802	)		95,000			953,706
Balance, March 31, 2024	5,419,855	$	54,199	$	29,589,564		$	-	$	(17,753,278	)	$	11,890,485		$	395,705		$	12,286,190		$	-		$	19,498,296
Restricted stock compensation	-		-		94,935					-			94,935			-			94,935			-			-


Stock issuance costs	-	-	(15,450	)	-		(15,450	)	-		(15,450	)	-	-
Cashless exercise of warrants	3,333	33	(33	)	-		-		-		-		-	-
Issuance of Redeemable Non-Controlling Interests	-	-	-		-		-		-		-		-	2,500,000
Distribution on Non-Controlling Interests	-	-	-		-		-		(2,844	)	(2,844	)	-	(271,090	)
Dividends paid on common stock	-	-	(634,407	)	-		(634,407	)	-		(634,407	)	-	-
Net (loss) income for the period	-	-	-		(2,261,722	)	(2,261,722	)	-		(2,261,722	)	-	800,234
Balance, June 30, 2024	5,423,188	54,232	29,034,609