GENERATION INCOME PROPERTIES, INC. [GIPRW] Filings

10-Q 1 gipr-20240630.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 June 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 August 9, 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 June 30, 2024 (unaudited) and December 31, 2023	3

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

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

	Generation Income Properties, Inc. Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 30, 2023 (unaudited)	8
	Notes to Unaudited Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

Item 4.	Controls and Procedures	37

PART II.	OTHER INFORMATION	38

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

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 June 30,			As of December 31,
	2024			2023

Assets
Investments in real estate
Land	$	21,236,021		$	21,996,902
Building and site improvements		64,800,757			71,621,499
Acquired tenant improvements		2,072,205			2,072,205
Acquired lease intangible assets		9,927,046			10,571,331
Less: accumulated depreciation and amortization		(9,900,184	)		(8,855,332	)
Net real estate investments	$	88,135,845		$	97,406,605
Cash and cash equivalents		2,553,234			3,117,446
Restricted cash		34,500			34,500
Deferred rent asset		392,795			1,106,191
Prepaid expenses		367,331			139,941
Prepaid guaranty fees - related party		96,360			-
Accounts receivable		266,834			241,166
Escrow deposits and other assets		775,351			493,393
Held for sale assets		5,750,250			-
Right of use asset, net		6,121,340			6,152,174
Total Assets	$	104,493,840		$	108,691,416

Liabilities and Equity
Liabilities
Accounts payable	$	328,725		$	406,772
Accrued expenses		862,986			688,146
Accrued expense - related party		683,347			683,347
Acquired lease intangible liabilities, net		948,290			1,016,260
Insurance payable		260,182			34,966
Deferred rent liability		180,168			260,942
Lease liability, net		6,439,175			6,415,041
Other payable - related party		904,920			1,809,840
Loan payable - related party		5,500,000			5,500,000
Mortgage loans, net of unamortized debt discount of $1,230,802 and $1,326,362 at June 30, 2024 and December 31, 2023, respectively, and debt issuance costs		56,273,271			56,817,310
Derivative liabilities		119,029			537,424
Total liabilities	$	72,500,093		$	74,170,048

Redeemable Non-Controlling Interests	$	22,527,046		$	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 June 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 June 30, 2024 and December 31, 2023, respectively		54,232			26,207
Additional paid-in capital		29,034,608			18,472,049
Accumulated deficit		(20,015,000	)		(14,833,058	)
Total Generation Income Properties, Inc. Stockholders' Equity	$	9,073,840		$	3,665,198

Non-Controlling Interest	$	392,861		$	406,131
Total equity	$	9,466,701		$	4,071,329

Total Liabilities and Equity	$	104,493,840		$	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 June 30,						Six Months ended June 30,
	2024			2023			2024			2023
Revenue
Rental income	$	2,248,382		$	1,318,750		$	4,523,112		$	2,645,457
Other income		10,853			10,128			169,296			20,460
Total revenue	$	2,259,235		$	1,328,878		$	4,692,408		$	2,665,917

Expenses
General and administrative expense	$	604,656		$	358,989		$	1,054,453		$	703,136
Building expenses		683,627			320,255			1,338,294			633,855
Depreciation and amortization		1,180,232			558,001			2,406,837			1,115,551
Interest expense, net		1,023,140			466,751			2,043,881			935,961
Compensation costs		238,191			282,719			520,206			634,006
Total expenses	$	3,729,846		$	1,986,715		$	7,363,671		$	4,022,509
Operating loss		(1,470,611	)		(657,837	)		(2,671,263	)		(1,356,592	)
Other expense		-			-			-			(506,000	)
Gain on derivative valuation, net		44,996			-			425,546			29,411
Income on investment in tenancy-in-common		-			15,009			-
Dead deal expense		(35,873	)		(109,569	)		(35,873	)		(109,569	)
Loss on held for sale asset valuation		0			-			(1,058,994	)		-
Net loss	$	(1,461,488	)	$	(752,397	)	$	(3,340,584	)	$	(1,942,750	)
Less: Net income attributable to non-controlling interests		800,234			129,065			1,746,358			256,279
Net loss attributable to Generation Income Properties, Inc.	$	(2,261,722	)	$	(881,462	)	$	(5,086,942	)	$	(2,199,029	)
Less: Preferred stock dividends		-			-			95,000			-
Net loss attributable to common shareholders	$	(2,261,722	)	$	(881,462	)	$	(5,181,942	)	$	(2,199,029	)

Total Weighted Average Shares of Common Stock Outstanding – Basic & Diluted		5,433,833			2,615,471			4,923,004			2,578,678

Basic & Diluted Loss Per Share Attributable to Common Stockholders	$	(0.42	)	$	(0.34	)	$	(1.05	)	$	(0.85	)

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 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

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			(20,015,000	)		9,073,841			392,861			9,466,702		$	-			22,527,440

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

Generation Income Properties, Inc. Consolidated Statements of Cash Flows

(unaudited)


	Six Months Ended June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,340,584	)	$	(1,942,750	)
Adjustments to reconcile net loss to cash from operating activities
Depreciation of building and site improvements		1,501,860			844,249
Amortization of acquired tenant improvements		161,247			271,302
Amortization of in-place leases		743,731			-
Amortization of above market leases		203,542			-
Amortization of below market leases		(67,604	)		(101,989	)
Amortization of above market ground lease		(366	)		(366	)
Amortization of debt issuance costs		95,560			57,730
Restricted stock unit compensation		189,870			167,687
Non-cash ground lease expense		30,834			42,133
Income on investment in tenancy-in-common		-			(29,411	)
Dead deal expense		35,873			109,569
Gain on derivative valuation, net		(425,546	)		-
Loss on held for sale asset valuation		1,058,994			-
Changes in operating assets and liabilities
Accounts receivable		(25,668	)		(29,236	)
Escrow and other assets		(274,806	)		(1,046	)
Deferred rent asset		713,396			(30,731	)
Prepaid expenses		(263,263	)		(336,070	)
Prepaid guaranty fees - related party		(96,360	)		-
Accounts payable		191,205			69,394
Accrued expenses		(148,670	)		390,983
Lease liability		24,134			9,649
Deferred rent liability		(80,774	)		(19,248	)
Net cash provided by (used in) operating activities	$	226,605		$	(528,151	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land, buildings, other tangible and intangible assets	$	-		$	(14,551	)
Prepaid capitalizable deal costs for future property acquisition		-			(174,303	)
Net cash used in investing activities	$	-		$	(188,854	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of redeemable non-controlling interests		2,500,000			3,000,000
Redemption of redeemable non-controlling interests		-			(2,479,299	)
Repayment on other payable - related party		(904,920	)		(325,000	)
Mortgage loan repayments		(639,599	)		(332,760	)
Equity issuance costs		(77,421	)		-
Escrow deposit to bank for future debt financing		-			(100,000	)
Insurance financing borrowings		400,889			352,307
Insurance financing repayments		(175,674	)		(159,374	)
Distribution on non-controlling interests		(544,611	)		(248,503	)
Dividends paid on preferred stock		(190,000	)		-
Dividends paid on common stock		(1,159,481	)		(603,470	)
Net cash used in financing activities	$	(790,817	)	$	(896,099	)

Net decrease in cash and cash equivalents	$	(564,212	)	$	(1,613,104	)
Cash and cash equivalents and restricted cash - beginning of period

GENERATION INCOME PROPERTIES, INC. [GIPRW] Filings
GENERATION INCOME PROPERTIES, INC. [GIPR] Filings
10-Q	[2024-08-15]
10-Q	[2024-05-20]
10-K	[2024-04-08]
10-Q	[2023-11-14]
10-Q	[2023-08-14]
10-Q	[2023-05-12]
10-K	[2023-03-28]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-18]
10-Q	[2021-11-16]

GENERATION INCOME PROPERTIES, INC. [GIPRW] Filings

GENERATION INCOME PROPERTIES, INC. [GIPR] Filings