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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

OR

 

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.

3


 

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.

4


 

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

(unaudited)

5


 

 

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

 

 

-

 

 

-

 

6


 

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

 

 

-

 

 

-

 

7


 

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