GENERATION INCOME PROPERTIES, INC. [GIPR] Filings

10-Q 1 gipr-20220930.htm 10-Q 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, 2022


☐	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 2,496,490 shares of Common Stock, par value $0.01 per share, outstanding as of November 7, 2022.

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, 2022 (unaudited) and December 31, 2021	3

	Generation Income Properties, Inc. Consolidated Statements of Operations Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	4

	Generation Income Properties, Inc. Consolidated Statements of Changes in Equity for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	5

	Generation Income Properties, Inc. Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	7
	Notes to Unaudited Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

SIGNATURES		40

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Generation Income Properties, Inc. Consolidated Balance Sheets (unaudited)


	As of September 30,			As of December 31,
	2022			2021 (As corrected, see Note 2)

Assets

Investments in real estate
Land	$	12,577,544		$	9,443,445
Building and site improvements		39,762,696			31,581,864
Tenant improvements		907,382			482,701
Acquired lease intangible assets		4,677,928			3,304,014
Less: accumulated depreciation and amortization		(5,063,422	)		(3,512,343	)
Net real estate investments	$	52,862,128		$	41,299,681
Investment in tenancy-in-common		1,204,811			725,082
Cash and cash equivalents		2,587,669			10,589,576
Restricted cash		34,500			34,500
Deferred rent asset		272,183			156,842
Deferred financing costs		66,767			-
Prepaid expenses		226,537			237,592
Accounts receivable		61,950			88,661
Escrow deposits and other assets		238,389			288,782
Right of use asset, net		6,253,975			-
Total Assets	$	63,808,909		$	53,420,716

Liabilities and Equity

Liabilities
Accounts payable	$	104,772		$	201,727
Accrued expenses		386,079			134,816
Acquired lease intangible liabilities, net		666,270			577,388
Insurance payable		127,103			33,359
Deferred rent liability		177,011			228,938
Lease liability, net		6,303,232			-
Other payable - related party		2,587,300			-
Mortgage loans, net of unamortized debt issuance costs of $734,477 and $637,693 at September 30, 2022 and December 31, 2021, respectively		35,364,605			28,969,295
Total liabilities	$	45,716,372		$	30,145,523

Redeemable Non-Controlling Interests	$	5,773,636		$	9,134,979

Stockholders' Equity
Common stock, $0.01 par value, 100,000,000 shares authorized; 2,489,282 and 2,172,950 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		24,892			21,729
Additional paid-in capital		19,506,770			19,051,929
Accumulated deficit		(7,664,430	)		(5,403,156	)
Total Generation Income Properties, Inc. Stockholders' equity	$	11,867,232		$	13,670,502

Non-Controlling Interest	$	451,669		$	469,712
Total equity	$	12,318,901		$	14,140,214

Total Liabilities and Equity	$	63,808,909		$	53,420,716

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,
	2022			2021 (As corrected, see Note 2)			2022			2021 (As corrected, see Note 2)
Revenue
Rental income	$	1,473,789		$	988,244		$	4,034,286		$	2,913,322
Other income		296			45,250			837			45,250
Total revenue	$	1,474,085		$	1,033,494		$	4,035,123		$	2,958,572

Expenses
General, administrative and organizational costs	$	408,570		$	181,746		$	1,222,986		$	621,987
Building expenses		269,781			195,464			848,373			539,739
Depreciation and amortization		561,510			388,141			1,551,079			1,164,838
Interest expense, net		382,440			336,025			1,088,361			1,028,446
Compensation costs		334,992			204,218			925,432			515,030
Total expenses	$	1,957,293		$	1,305,594		$	5,636,231		$	3,870,040
Operating loss		(483,208	)		(272,100	)		(1,601,108	)		(911,468	)
Income on investment in tenancy-in-common		16,751			4,750			23,841			4,750
Gain on sale of property		-			923,178			-			923,178
Dead deal expense		(45,660	)		-			(153,031	)		-
Loss on debt extinguishment		-			-			(144,029	)		-
Net income (loss)	$	(512,117	)	$	655,828		$	(1,874,327	)	$	16,460
Less: Net income attributable to non-controlling interests		126,803			200,277			386,947			398,781
Net income (loss) attributable to Generation Income Properties, Inc.	$	(638,920	)	$	455,551		$	(2,261,274	)	$	(382,321	)

Total Weighted Average Shares of Common Stock Outstanding – Basic & Diluted		2,304,841			939,559			2,251,522			699,395

Basic & Diluted Income (Loss) Per Share Attributable to Common Stockholders	$	(0.28	)	$	0.48		$	(1.00	)	$	(0.55	)

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			Accumulated			Stockholders'			Non-Controlling						Redeemable Non-Controlling
	Shares			Amount			Capital			Deficit			Equity			Interest			Total Equity			Interest
Balance, December 31, 2020 (As corrected, see Note 2)		576,918		$	5,770		$	5,541,411		$	(4,177,142	)	$	1,370,039		$	486,180		$	1,856,219		$	8,198,251
Common stock issued for services		2,200			22			43,978						44,000			-			44,000			-
Restricted stock unit compensation		3,749			37			49,434						49,471			-			49,471			-
Issuance of Redeemable Non-Controlling Interest for property acquisition		-			-			-			-			-			-			-			500,000
Distribution on Non-Controlling Interest		-			-			-			-			-			-			-			(150,826	)
Dividends paid on common stock		-						(114,373	)					(114,373	)		-			(114,373	)		-
Net (loss) income for the quarter (As corrected, see Note 2)		-			-			-			(467,883	)		(467,883	)		(4,646	)		(472,529	)		150,826
Balance, March 31, 2021 (As corrected, see Note 2)		582,867		$	5,829		$	5,520,450		$	(4,645,025	)	$	881,254		$	481,534		$	1,362,788		$	8,698,251
Restricted stock unit compensation		-			-			50,278			-			50,278			-			50,278			-
Issuance of Redeemable Non-Controlling Interest for property acquisition		-			-			-			-			-			-			-			950,000
Distribution on Non-Controlling Interest		-			-			-			-			-			(2,748	)		(2,748	)		(56,400	)
Net (loss) income for the quarter (As corrected, see Note 2)		-			-			-			(369,989	)		(369,989	)		(4,076	)		(374,065	)		56,400
Balance, June 30, 2021 (As corrected, see Note 2)		582,867		$	5,829		$	5,570,728		$	(5,015,014	)	$	561,543		$	474,710		$	1,036,253		$	9,648,251
Restricted stock unit compensation		24,833			248			53,639						53,887			-			53,887			-
Non-cash redemption of shares		(112,500	)		(1,125	)		1,025						(100	)		-			(100	)		-
Issuance of common stock, net of issuance costs		1,665,000			16,650			13,748,767						13,765,417			-			13,765,417			-
Reclassification of issuance costs														-			-			-			-
Redemption of Redeemable Non-Controlling Interest														-			-			-			(1,200,000	)
Issuance of Redeemable Non-Controlling Interest for property acquisition														-			-			-			650,000
Distribution on Non-Controlling Interest														-			(7,898

GENERATION INCOME PROPERTIES, INC. [GIPR] Filings
GENERATION INCOME PROPERTIES, INC. [GIPRW] Filings
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GENERATION INCOME PROPERTIES, INC. [GIPR] Filings

GENERATION INCOME PROPERTIES, INC. [GIPRW] Filings