gipr-10q_20210930.htm

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.:

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 2,160,200 shares of Common Stock, par value $0.01 per share, outstanding as of November 11, 2021.

	As of September 30,			As of December 31,
	2021			2020
	(Unaudited)
Assets

Investment in real estate
Property	$	36,621,767		$	37,352,447
Tenant improvements		482,701			482,701
Acquired lease intangible assets		2,949,411			3,014,149
Less accumulated depreciation and amortization		(3,168,841	)		(2,317,454	)
Total investments		36,885,038			38,531,843
Investment in tenancy-in-common		717,337			-
Cash and cash equivalents		14,194,639			937,564
Restricted cash		34,500			184,800
Deferred rent asset		145,428			126,655
Prepaid expenses		220,652			134,165
Deferred financing costs		-			614,088
Accounts receivable		105,108			75,794
Escrow deposit and other assets		106,106			75,831
Total Assets	$	52,408,808		$	40,680,740


Liabilities and Stockholder's Equity

Liabilities
Accounts payable	$	156,638		$	118,462
Accounts payable - related party		100			-
Accrued expenses		278,581			406,125
Acquired lease intangible liability, net		608,697			415,648
Insurance payable		99,096			40,869
Deferred rent liability		185,805			188,595
Note Payable - related party		-			1,100,000
Mortgage loans, net of unamortized discount of $633,647 and $689,190 at September 30, 2021 and December 31, 2020, respectively		26,765,781			28,356,571
Total liabilities		28,094,698			30,626,270

Redeemable Non-Controlling Interests		9,605,028			8,684,431

Stockholders' Equity
Common stock, $0.01 par value, 100,000,000 shares authorized; 2,272,700 shares issued and 2,160,200 outstanding at September 30, 2021 and 576,918 issued and outstanding at December 31, 2020		22,727			5,770
Treasury shares, at cost		(100	)		-
Additional paid-in capital		19,256,827			5,541,411
Accumulated deficit		(4,570,372	)		(4,177,142	)
Total Generation Income Properties, Inc. stockholders' equity		14,709,082			1,370,039

Total Liabilities and Stockholders' Equity	$	52,408,808		$	40,680,740

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,
	2021			2020			2021			2020
Revenue
Rental income	$	988,244		$	871,825		$	2,913,322		$	2,630,067
Other income		45,250			-			45,250			-
Total revenue	$	1,033,494		$	871,825		$	2,958,572		$	2,630,067

Expenses
General, administrative and organizational costs		268,632			267,608			808,623			689,660
Building expenses		195,464			179,319			539,739			534,947
Depreciation and amortization		388,141			363,898			1,164,838			1,083,917
Interest expense, net		336,025			334,323			1,028,446			1,060,776
Compensation costs		117,332			129,880			328,394			257,882
Total expenses		1,305,594			1,275,028			3,870,040			3,627,182
Operating loss		(272,100	)		(403,203	)		(911,468	)		(997,115	)
Income on investment in tenancy-in-common		4,750			-			4,750			-
Gain on disposal of property		923,178			-			923,178			-
Net income (loss)	$	655,828		$	(403,203	)	$	16,460		$	(997,115	)

Less: Net income attributable to non-controlling interest		199,716			152,023			409,690			334,718
Net Income (loss) attributable to Generation Income Properties, Inc.	$	456,112		$	(555,226	)	$	(393,230	)	$	(1,331,833	)

Total Weighted Average Shares of Common Stock Outstanding – Basic		939,559			525,495			699,395			525,332
Total Weighted Average Shares of Common Stock Outstanding – Diluted		939,559			525,495			699,395			525,332

Basic Income (Loss) Per Share Attributable to Common Stockholder	$	0.49		$	(1.06	)	$	(0.56	)	$	(2.54	)
Diluted Income (Loss) Per Share Attributable to Common Stockholder	$	0.49		$	(1.06	)	$	(0.56	)	$	(2.54	)

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

	Nine Months Ended September 30,
	2021			2020
CASHFLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	16,460		$	(997,115	)
Adjustments to reconcile net income (loss) to cash provided by operating activities
Depreciation		833,291			776,070
Amortization of acquired lease intangible assets		331,547			307,847
Amortization of debt issuance costs		94,600			106,210
Amortization of below market leases		(115,921	)		(82,123	)
Common stock issued in lieu of cash compensation		33,000			-
Restricted stock unit compensation		153,636			74,338
Equity in earnings on investment in tenancy-in-common		(4,750	)		-
Gain on sale of property		(923,178	)		-
Changes in operating assets and liabilities
Accounts receivable		(29,314	)		(168	)
Other assets		(30,275	)		(35,636	)
Deferred rent asset		(18,773	)		(1,510	)
Prepaid expenses		(86,487	)		(103,223	)
Accounts payable		38,176			29,503
Accrued expenses		(116,544	)		64,173
Deferred rent liability		(2,790	)		38,333
Net cash provided by operating activities		172,678			176,699

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land, buildings, other tangible and intangible assets		(3,530,809	)		(196,016	)
Investment in tenancy-in-common		(712,587	)		-
Proceeds from sale of land, buildings, other tangible and intangible assets		5,245,858			-
Net cash provided by (used in) investing activities		1,002,462			(196,016	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock and warrants, net		14,379,505			-
Proceeds from issuance of redeemable interest		2,100,000			-
Mortgage loan repayments - related party		(1,100,000	)		(800,000	)
Redemption of redeemable non-controlling interests		(1,200,000	)		-
Mortgage loan borrowings		2,125,000			11,287,500
Mortgage loan repayments		(3,771,333	)		(10,024,198	)
Deferred financing costs paid in cash		-			(153,239	)
Debt issuance costs paid in cash		(39,991	)		(564,857	)
Insurance financing borrowings		277,059			189,153
Insurance financing repayments		(218,832	)		(145,749	)
Distribution on redeemable non-controlling interests		(389,093	)		(334,718	)
Dividends paid on common stock		(230,680	)		(210,185	)
Net cash generated from (used in) financing activities		11,931,635			(756,293	)
Net increase (decrease) in cash and cash equivalents		13,106,775			(775,610	)
Cash and cash equivalents and restricted cash - beginning of period		1,122,364			1,398,365
Cash and cash equivalents and restricted cash - end of period	$	14,229,139		$	622,755

CASH TRANSACTIONS
Interest Paid	$	938,984		$	940,316
NON-CASH TRANSACTIONS
Stock issued for accrued liabilities		11,000			-
Deferred financing costs incurred on account		-			182,697
Deferred distribution on redeemable non-controlling interests		20,597			-
Accounts payable - related party for redemption of common stock shares		100			-

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

Generation Income Properties, Inc. Consolidated Statements of Changes in Stockholders’ Equity

	Common Stock Shares		Common Stock Amount		Treasury Stock Amount		Additional Paid-In- Capital			Accumulated Deficit			Generation Income Properties, Inc. Stockholders' Equity			Redeemable Non- Controlling Interest
Balance - December 31, 2019		525,250	$	5,253	$	—	$	4,773,639		$	(2,345,489	)		2,433,403		$	8,198,251
Restricted stock unit compensation		—		—		—		20,023			—			20,023			—
Distribution on Redeemable Non-Controlling Interest		—		—		—		—			—			—			(142,844	)
Dividends paid on Common Stock		—		—		—		(105,101	)		—			(105,101	)		—
Net (loss) income for the quarter		—		—		—		—			(494,032	)		(494,032	)		142,844
Balance - March 31, 2020		525,250	$	5,253	$	—	$	4,688,561		$	(2,839,521	)	$	1,854,293		$	8,198,251
Restricted stock unit compensation		—		—		—		27,009			—			27,009			—
Distribution on Redeemable Non-Controlling Interest		—		—		—		—			—			—			(39,851	)
Net (loss) income for the quarter		—		—		—		—			(282,575	)		(282,575	)		39,851
Balance - June 30, 2020		525,250	$	5,253	$	-	$	4,715,570		$	(3,122,096	)	$	1,598,727		$	8,198,251
Restricted stock unit compensation		1,668		17				27,289			—			27,306			—
Distribution on Redeemable Non-Controlling Interest		—		—		—		—			—			—			(152,023	)
Dividends paid on Common Stock		—		—		—		(105,084	)		—			(105,084	)		—
Net (loss) income for the quarter		—		—		—		—			(555,226	)		(555,226	)		152,023
Balance - September 30, 2020		526,918		5,270		—		4,637,775			(3,677,322	)		965,723			8,198,251

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)

		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Generation Income Properties, Inc. Consolidated Balance Sheets September 30, 2021 (unaudited) and December 31, 2020	3

	Generation Income Properties, Inc. Consolidated Statements of Operations Three and Nine month Ended September 30, 2021 and 2020 (unaudited)	4

	Generation Income Properties, Inc. Consolidated Statements of Cash Flows Nine month Ended September 30, 2021 and 2020 (unaudited)	5

	Generation Income Properties, Inc. Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine month Ended September 30, 2021 and 2020 (unaudited)	6
	Notes to Unaudited Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II.	OTHER INFORMATION	32

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	32

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

SIGNATURES		35

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☑	Smaller reporting company	☑

		Emerging growth company	☑