Generation Income Properties (NASDAQ: GIPR) flags going-concern risk after Q1 2026 loss
Generation Income Properties, Inc. reports Q1 2026 results with a net loss attributable to common stockholders of $2.1 million, or $0.31 per share, on total revenue of $2.18 million, down from $2.38 million a year earlier.
Operating loss narrowed to $1.24 million as general and administrative, building, depreciation and interest expenses all declined year over year. A $155,851 gain on derivative valuation partially offset a $185,069 loss on the transfer of LLC interests used to satisfy debt.
Operating cash flow was positive at $451,160, but cash and equivalents fell sharply to $289,468 from $6.16 million at year-end, largely due to $6.09 million of distributions on redeemable non-controlling interests and debt service. Total assets were $88.3 million, with total liabilities of $66.5 million and negative stockholders’ equity of $5.6 million.
Management discloses that recurring losses, liquidity needs, and limited current cash raise substantial doubt about the company’s ability to continue as a going concern, and notes plans focused on refinancing, extending preferred equity and loans, and selective asset sales to address short-term liquidity.
Positive
- None.
Negative
- Substantial doubt about going concern: Management concludes that recurring losses, liquidity needs, and limited cash of $323,968 versus a leveraged balance sheet create substantial doubt about the company’s ability to continue as a going concern within one year.
- Sharp decline in cash and continued losses: Cash and restricted cash fell from $6.20 million to $0.32 million in three months, while net loss attributable to common stockholders was $2.13 million and equity remains negative.
- Heavy preferred and redeemable obligations: Redeemable non-controlling interests tied to preferred-style capital total $26.97 million, including high-rate LC2 preferred equity with an outstanding redemption value of $13.07 million, ranking structurally ahead of common shareholders.
- Dividend suspension: The board previously suspended regular common dividends beginning July 2024, and future distributions will depend on financial condition and board decisions, limiting current cash return to common stockholders.
Insights
Going-concern doubt, negative equity, and shrinking cash highlight elevated balance sheet risk.
Generation Income Properties generates modest positive operating cash flow of $451,160 in Q1 2026 but remains structurally loss-making, with a net loss attributable to common of $2.13 million on revenue of $2.18 million. Stockholders’ equity is negative at $(5.6) million, while redeemable non-controlling interests and preferred-style capital total $27.0 million, sitting ahead of common.
Cash and restricted cash have fallen to $323,968 from $6.20 million at December 31, 2025, primarily reflecting $6.09 million of distributions on redeemable non-controlling interests and scheduled debt service. Total debt, including a related-party loan payable of $6.72 million and mortgage loans of $48.3 million, leaves the balance sheet heavily leveraged against $88.3 million of assets.
Management explicitly concludes that substantial doubt exists about the company’s ability to continue as a going concern within one year, and is relying on refinancing, extending preferred equity and loans, and asset optimization or divestitures. Q1 actions include deconsolidating a 7‑Eleven property via transfer to a related party in satisfaction of a $600,000 note and classifying a Dollar Tree property held for sale at a carrying value of $1.08 million. The impact of forthcoming refinancing milestones and the August 2026 preferred equity redemption deadline at GIP SPE will be central to future filings.
Key Figures
Key Terms
going concern financial
Redeemable Non-Controlling Interests financial
Operating Partnership financial
preferred equity financial
interest rate swap financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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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.
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).
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.:
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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
GENERATION INCOME PROPERTIES, INC.
TABLE OF CONTENTS
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PART I. |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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Generation Income Properties, Inc. Consolidated Balance Sheets |
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Generation Income Properties, Inc. Consolidated Statements of Operations Three and |
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Generation Income Properties, Inc. Consolidated Statements of Changes in (Deficit) Equity, Redeemable Preferred Stock, and Redeemable Non-Controlling Interests for the Three Months Ended March 31, 2026 and March 31, 2025 (unaudited) |
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Generation Income Properties, Inc. Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and March 31, 2025 (unaudited) |
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Notes to Unaudited Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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PART II. |
OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. |
Defaults Upon Senior Securities |
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Item 4. |
Mine Safety Disclosures |
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Item 5. |
Other Information |
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Item 6. |
Exhibits |
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SIGNATURES |
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Generation Income Properties, Inc |
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Consolidated Balance Sheets |
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As of March 31, |
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As of December 31, |
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2026 |
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2025 |
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Assets |
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Investments in real estate |
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Land |
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$ |
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$ |
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Building and site improvements |
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Acquired tenant improvements |
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Acquired lease intangible assets |
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Less: accumulated depreciation and amortization |
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Net real estate investments |
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$ |
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$ |
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Cash and cash equivalents |
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Restricted cash |
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Deferred rent asset |
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Prepaid expenses |
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Accounts receivable |
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Escrow deposits and other assets |
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Held for sale assets |
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Right-of-use asset, net |
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Total Assets |
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$ |
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$ |
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Liabilities and Equity |
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Liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Accrued expense - related party |
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Acquired lease intangible liabilities, net |
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Insurance payable |
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Deferred rent liability |
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Lease liability, net |
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Other loans payable |
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Mortgage loans, net of unamortized debt discount and debt issuance costs of $ |
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Derivative liabilities |
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Total liabilities |
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$ |
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$ |
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Redeemable Non-Controlling Interests |
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Stockholders' (Deficit) Equity |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Generation Income Properties, Inc. Stockholders' (Deficit) Equity |
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$ |
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$ |
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Non-Controlling Interest |
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$ |
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$ |
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Total equity |
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$ |
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$ |
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Total Liabilities and Equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
Generation Income Properties, Inc |
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Consolidated Statements of Operations |
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Three Months Ended March 31, |
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2026 |
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2025 |
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Revenue |
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Rental income |
$ |
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$ |
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Other income |
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Total revenue |
$ |
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$ |
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Expenses |
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General and administrative expense |
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Building expenses |
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Depreciation and amortization |
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Interest expense, net |
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Compensation costs |
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Total expenses |
$ |
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$ |
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Operating loss |
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( |
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( |
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Other expense |
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( |
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( |
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Gain (loss) on derivative valuation |
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( |
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Dead deal expense |
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( |
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Loss on transfer of LLC interests in satisfaction of debt |
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( |
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Net loss |
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Less: Net income attributable to non-controlling interests |
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Net loss attributable to Generation Income Properties, Inc. |
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( |
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Total Weighted Average Shares of Common Stock Outstanding – Basic & Diluted |
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Basic & Diluted Loss Per Share Attributable to Common Stockholders |
$ |
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( |
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$ |
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( |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
Generation Income Properties Inc |
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Consolidated Statements of Changes in Equity (Deficit), Redeemable Preferred Stock, and Redeemable Non-Controlling Interests |
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Common Stock |
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Additional |
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Accumulated Deficit |
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Stockholders' Equity |
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Non-Controlling Interests |
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Total Equity |
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Redeemable Non-Controlling Interests |
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Shares |
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Amount |
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Balance, December 31, 2024 |
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$ |
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$ |
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$ |
(23,277,545 |
) |
$ |
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$ |
392,861 |
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$ |
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$ |
26,664,545 |
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Issuance of Redeemable Non-Controlling Interests |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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4,209,154 |
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Distribution on Non-Controlling Interests |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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(405,648 |
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Net (loss) income for the period |
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- |
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- |
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- |
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(2,731,859 |
) |
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(2,731,859 |
) |
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- |
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( |
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934,399 |
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Balance, March 31, 2025 |
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$ |
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$ |
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$ |
(26,009,404 |
) |
$ |
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$ |
392,861 |
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$ |
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$ |
31,402,450 |
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Balance, December 31, 2025 |
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$ |
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$ |
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$ |
(33,618,449 |
) |
$ |
( |
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$ |
392,861 |
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$ |
( |
) |
$ |
32,187,864 |
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Cashless exercise of warrants |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Restricted stock compensation |
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- |
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- |
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165,000 |
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165,000 |
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165,000 |
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Conversion of debt to common shares |
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- |
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551,437 |
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- |
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- |
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Distribution on Non-Controlling Interests |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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(6,086,679 |
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Net (loss) income for the period |
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- |
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- |
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(2,131,135 |
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(2,131,135 |
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- |
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( |
) |
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864,988 |
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Balance, March 31, 2026 |
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$ |
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$ |
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$ |
(35,749,584 |
) |
$ |
( |
) |
$ |
392,861 |
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$ |
( |
) |
$ |
26,966,173 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
6
Generation Income Properties, Inc |
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Consolidated Statements of Cash Flows |
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Three Months Ended March 31, |
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2026 |
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2025 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to cash provided by operating activities |
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Depreciation of building and site improvements |
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Amortization of acquired tenant improvements |
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Amortization of in-place leases |
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Amortization of above-market leases |
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Amortization of below-market leases |
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( |
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( |
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Amortization of above-market ground lease |
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( |
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( |
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Amortization of debt issuance costs |
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Amortization of debt discount |
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Restricted stock unit compensation |
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Non-cash ground lease expense |
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Dead deal expense |
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(Gain) loss on derivative valuation |
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( |
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Loss on transfer of LLC interests in satisfaction of debt |
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Changes in operating assets and liabilities |
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Accounts receivable |
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( |
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( |
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Escrow and other assets |
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( |
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Deferred rent asset |
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( |
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Prepaid expenses |
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( |
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Accounts payable |
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Accrued expenses |
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Accrued expenses - related party |
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Deferred rent liability |
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( |
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Lease liability |
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Other loans payable |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Cash transferred in disposition of LLC interests |
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( |
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Net cash used in investing activities |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds of issuance on loan payable - related party |
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Mortgage loan repayments |
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( |
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Insurance financing repayments |
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( |
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( |
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Distribution on non-controlling interests |
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( |
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( |
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Net cash used in financing activities |
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( |
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( |
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Net (decrease) increase in cash and cash equivalents |
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( |
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Cash and cash equivalents and restricted cash - beginning of period |
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Cash and cash equivalents and restricted cash - end of period |
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$ |
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$ |
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CASH TRANSACTIONS |
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Interest paid |
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$ |
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$ |
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NON-CASH TRANSACTIONS |
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Assumption of loans in connection with property acquisitions |
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$ |
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$ |
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Issuance of Series B-2 Preferred Units in connection with property acquisitions |
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$ |
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$ |
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Stock issued for cashless exercise of Investor Warrants |
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$ |
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$ |
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Transfer of LLC interests in satisfaction of debt: |
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Building and improvements derecognized |
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$ |
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$ |
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Tenant improvements derecognized |
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$ |
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$ |
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Lease intangible assets derecognized |
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$ |
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$ |
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Accumulated depreciation derecognized |
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$ |
( |
) |
$ |
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7
Other assets derecognized |
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$ |
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$ |
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Accounts payable derecognized |
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$ |
( |
) |
$ |
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Accrued expenses derecognized |
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$ |
( |
) |
$ |
|
|
Lease liability derecognized |
|
$ |
( |
) |
$ |
|
|
Mortgage debt extinguished |
|
$ |
( |
) |
$ |
|
|
Related-party note payable forgiven |
|
$ |
( |
) |
$ |
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
8
GENERATION INCOME PROPERTIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Nature of Operations
Generation Income Properties, Inc. (the “Company”) was formed as a Maryland corporation on
The Company formed Generation Income Properties L.P. (the “Operating Partnership”) in
The Company places each property in a separate entity which may have a Redeemable Non-Controlling interest as a member.
As of March 31, 2026, the Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned
Management’s Liquidity Plans and Going Concern
In accordance with FASB Accounting Standards Codification ("ASC") 205, Presentation of Financial Statements, management is required to assess a company's ability to continue as going concern within one year from financial statement issuance and to provide related footnote disclosures in certain circumstances. The accompanying Consolidated Financial Statements are prepared assuming the Company will continue as a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.
For the three months ended March 31, 2026, the Company generated positive operating cash flows of $451,161 and had cash on hand of $
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2026 and subsequently amended by Form 10-K/A on April 3, 2026 and April 20, 2026. The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026.
The preparation of the consolidated financial statements is in conformity with U.S. GAAP. The Company adopted the calendar year as its basis of reporting. Certain immaterial prior year amounts have been reclassified for consistency with the current period presentation.
9
Consolidation
The accompanying consolidated financial statements include the accounts of Generation Income Properties, Inc. and the Operating Partnership and all of the direct and indirect wholly owned subsidiaries of the Operating Partnership and the Company’s subsidiaries. All significant inter-company balances and transactions have been eliminated in the consolidated financial statements.
The consolidated financial statements include the accounts of all entities in which the Company has a controlling interest. The ownership interests of other investors in these entities are recorded as non-controlling interests or redeemable non-controlling interest. Non-controlling interests are adjusted each period for additional contributions, distributions, and the allocation of net income or loss attributable to the non-controlling interests. Investments in entities for which the Company has the ability to exercise significant influence over, but does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings (or losses) of these entities are included in consolidated net income or loss.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of commitments and contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly if economic conditions were to weaken.
Cash
The Company considers all demand deposits, cashier’s checks and money market accounts to be cash equivalents. Amounts included in restricted cash represent funds owned by the Company related to tenant escrow reimbursements and immediate capital repair reserve.
|
As of March 31, |
|
|
As of December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
||
Cash and cash equivalents and restricted cash |
$ |
|
|
$ |
|
||
Revenue Recognition
The Company leases real estate to its tenants under long-term net leases which the Company accounts for as operating leases. Those leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. Deferred rent liability includes $
The Company reviews the collectability of charges under its tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located. In the event that uncollectibility exists with respect to any tenant changes, the Company would record an allowance with a corresponding reduction to Rental income. The Company’s review of collectability of charges under its operating leases includes any accrued rental revenues related to the straight-line rents. There were no allowances for receivables recorded during the three months ended March 31, 2026 or 2025.
The Company’s leases provide for reimbursement from tenants for common area maintenance (“CAM”), insurance, real estate taxes and other operating expenses (“recoverable costs”). A portion of our operating cost reimbursement revenue is estimated each period and is recognized as rental income in the period the recoverable costs are incurred and accrued.
10
The Company often recognizes above- and below-market lease intangibles in connection with acquisitions of real estate. The capitalized above- and below-market lease intangibles are amortized to rental income over the remaining term of the related leases.
Stock-Based Compensation
The Company records all equity-based incentive grants to employees and non-employee members of the Company’s Board of Directors in compensation costs based on their fair values on the date of grant. Stock-based compensation expense, net of forfeitures, is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the outstanding equity awards.
Investments in Real Estate
Acquisitions of real estate are recorded at cost. The Company assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value. Tangible assets consist of land, buildings, site improvements, and tenant improvements. Intangible assets and liabilities consist of the value of in-place leases and above- or below-market leases assumed with the acquisition. At the time of acquisition, the Company assesses whether the purchase of the real estate falls within the definition of a business under Accounting Standards Codification (“ASC”) 805,"Business Combinations," and to date has concluded that all asset transactions have been asset acquisitions. Therefore, each acquisition has been recorded at the purchase price whereas assets and liabilities, inclusive of closing costs, are allocated to land, building, site improvements, tenant improvements, and intangible assets and liabilities based upon their relative fair values at the date of acquisition.
The fair value of the in-place leases are estimated as the cost to replace the leases including loss of rent, commissions and legal fees. The in-place leases are amortized over the remaining term of the leases as amortization expense. The fair value of an above- or below-market lease is estimated as the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated market lease rate expected over the remaining non-cancelable life of the lease at the date of acquisition. The capitalized above- or below-market lease values are amortized as a decrease or increase to rental income over the remaining term of the lease inclusive of the renewal option periods that are considered probable at acquisition.
The Company classifies real estate assets as held for sale when all of the following criteria are met: management has committed to a plan to sell the asset; the asset is available for immediate sale in its present condition; an active program to locate a buyer has been initiated; the sale of the asset is probable within twelve months of the classification date; the asset is being actively marketed at a price that is reasonable in relation to its current fair value; and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Upon classification as held for sale, the Company ceases depreciation and amortization on the asset as of the classification date. Real estate assets held for sale are measured at the lower of their carrying amount or estimated fair value less costs to sell. Any excess of carrying amount over estimated fair value less costs to sell is recognized as an impairment loss in the period in which the held for sale criteria are met. Subsequent increases in fair value less costs to sell are recognized as a gain, but not in excess of the cumulative impairment loss previously recognized. Real estate assets held for sale are presented separately on the Company's consolidated balance sheet.
Depreciation Expense
Real estate and related assets are stated net of accumulated depreciation. Renovations, replacements and other expenditures that improve or extend the life of assets are capitalized and depreciated over their estimated useful lives. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful life of the buildings, which are generally between
Lease Liabilities
The Company has a certain property within its portfolio that is on land subject to a ground lease with a third party, which is classified as an operating lease. Accordingly, the Company owns only a long-term leasehold in this property. The building and improvements constructed on the leased land are capitalized as investment in real estate and are depreciated over the shorter of the useful life of the improvements or the lease term.
Under ASC 842, "Leases," the Company recognizes a lease liability for its ground lease and corresponding right-of-use asset related to this same ground lease which is classified as an operating lease. A key input in estimating the lease liability and resulting right-of-use asset is establishing the discount rate in the lease, which since the rate implicit in the contract is not readily determinable, requires additional inputs for the longer-term ground lease, including mortgage market-based interest
11
rates that correspond with the remaining term of the lease, the Company's credit spread, and the payment terms present in the lease. This discount rate is applied to the remaining unpaid minimum rental payments for the lease to measure the lease liability.
Impairments
The Company reviews investments in real estate and related lease intangibles for possible impairment when certain events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable though operations plus estimated disposition proceeds. Events or changes in circumstances that may occur include, but are not limited to, significant changes in real estate market conditions, estimated residual values, and an expectation to sell assets before the end of the previously estimated life. Impairments are measured to the extent the current book value exceeds the estimated fair value of the asset less disposition costs for any assets classified as held for sale. There were
The valuation of impaired assets is determined using valuation techniques including discounted cash flow analysis, analysis of recent comparable sales transactions, and purchase offers received from third parties, which are Level 3 inputs. The Company may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate. Estimating future cash flows is highly subjective and estimates can differ materially from actual results.
Income Taxes
The Company elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code (the “Code”) commencing with our taxable year ending December 31, 2021. To continue to qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its taxable income to its stockholders. As a REIT, the Company generally will not be subject to federal corporate income tax on that portion of its taxable income that is currently distributed to stockholders. Accordingly, the only provision for federal income taxes in the accompanying consolidated financial statements relates to the Company's consolidated taxable REIT subsidiary of which no taxable income was generated during the three months ended March 31, 2026 and 2025.
The Company also recognizes liabilities for unrecognized tax benefits which are recognized if the weight of available evidence indicates that it is not more-likely-than-not that the positions will be sustained on examination, including resolution of the related processes, if any. As of each balance sheet date, unrecognized benefits are reassessed and adjusted if the Company’s judgment changes as a result of new information.
Earnings per Share
In accordance with ASC 260, "Earnings Per Share," basic earnings (loss) per share (“EPS”) is computed by dividing net loss attributable to the Company that is available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive securities such as warrants and convertible membership units of the Operating Partnership (“GIP LP Units”) if their effect is anti-dilutive. For the three months ended March 31, 2026 and 2025, all potentially dilutive securities were excluded because the effect was anti-dilutive.
Derivative Financial Instruments
Derivatives are recorded at fair value on the balance sheet as assets or liabilities. The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates. Such amounts and the recognition of such amounts are subject to estimates that may change in the future.
Fair Value Measurements
Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from independent sources (observable
12
inputs that are classified within Levels 1 and 2 of the hierarchy) and the Company's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:
Note 3 - Real Estate Assets
Depreciation and amortization expense related to real estate assets was $
Deconsolidation of GIPDC 3707 14th St. LLC: 7-Eleven, Washington, D.C.
On March 3, 2026, the Company transferred one hundred percent (
As a result of the transfer, the Company lost control of the DC Entity and deconsolidated it from the Company's consolidated financial statements effective March 3, 2026 in accordance with ASC 810, Consolidation. Assets and liabilities removed from the Company's consolidated balance sheet in connection with the deconsolidation are disclosed in the non-cash investing and financing activities section of the Company's consolidated statement of cash flows for the three months ended March 31, 2026.
The Company recognized a loss on transfer of LLC interests of $
As additional consideration for the Assignment, the Company retained a contingent right to receive fifty percent (
The Company continues to serve as the exclusive property manager of the DC Property pursuant to the Assignment Agreement. Pursuant to this arrangement, the Company is entitled to property management fees.
Real Estate Assets Held for Sale — 2383 Lake Harbin Road, Morrow, Georgia (Dollar Tree)
The Company's accounting policy for real estate assets held for sale is described in Note 2 - Summary of Significant Accounting Policies.
On March 23, 2026, the Company entered into an agreement, as amended on April 2, 2026, to sell its Dollar Tree-occupied net lease retail property located in Morrow, Georgia (the "Morrow Property") for a gross purchase price of $
As of March 31, 2026, the Morrow Property is presented as real estate assets held for sale on the Company's consolidated balance sheet at its net carrying value of $
13
Note 4 – Acquired Lease Intangible Assets, net
In-place leases, net is comprised of the following:
|
As of March 31, |
|
|
As of December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
In-place leases |
$ |
|
|
$ |
|
||
Accumulated amortization |
|
( |
) |
|
|
( |
) |
In-place leases, net |
$ |
|
|
$ |
|
||
The amortization for in-place leases for the three months ended March 31, 2026 and 2025 was $
|
As of March 31, |
|
|
|
2026 |
|
|
2026 (9 months remaining) |
|
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
Thereafter |
|
|
|
|
$ |
|
|
Above-market leases, net is comprised of the following:
|
As of March 31, |
|
|
As of December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Above-market leases |
$ |
|
|
$ |
|
||
Accumulated amortization |
|
( |
) |
|
|
( |
) |
Above-market leases, net |
$ |
|
|
$ |
|
||
The amortization for above-market leases for the three months ended March 31, 2026 and 2025 was $
|
As of March 31, |
|
|
|
2026 |
|
|
2026 (9 months remaining) |
|
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
Thereafter |
|
|
|
|
$ |
|
|
Note 5 – Acquired lease intangible liabilities, net
Acquired lease intangible liabilities, net is comprised of the following:
|
As of March 31, |
|
|
As of December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Acquired lessor lease intangible liabilities |
$ |
|
|
$ |
|
||
Accumulated accretion to rental income |
|
( |
) |
|
|
( |
) |
Acquired lessor lease intangible liabilities, net |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Acquired lessee lease intangible liabilities |
$ |
|
|
$ |
|
||
Accumulated amortization to offset building expenses |
|
( |
) |
|
|
( |
) |
Acquired lessee lease intangible liabilities, net |
$ |
|
|
$ |
|
||
14
The amortization for acquired lessor lease intangible liabilities for the three months ended March 31, 2026 and 2025 was $
|
As of March 31, |
|
|
|
2026 |
|
|
2026 (9 months remaining) |
$ |
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
Thereafter |
|
|
|
|
$ |
|
|
The amortization for acquired lessee lease intangible liabilities for both the three months ended March 31, 2026 and 2025 was $
|
As of March 31, |
|
|
|
2026 |
|
|
2026 (9 months remaining) |
$ |
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
Thereafter |
|
|
|
|
$ |
|
|
Note 6 – Leases
Lessor Accounting
All of the Company's leases are classified as operating leases. The Company's rental income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent. Income for these amounts is recognized on a straight-line basis. The Company’s leases also provide for reimbursement of recoverable costs. A portion of our operating cost reimbursement revenue is estimated each period and is recognized as rental income in the period the recoverable costs are incurred. Variable lease income includes the tenants' contractual obligations to reimburse the Company for their portion of recoverable costs incurred and index-based rent adjustments.
|
2026 |
|
|
2025 |
|
||
Rental income |
|
|
|
|
|
||
Fixed and in-substance fixed lease income |
|
|
|
|
|
||
Variable lease income |
|
|
|
|
|
||
Other related lease income, net: |
|
|
|
|
|
||
Amortization of above- and below-market leases, net |
|
( |
) |
|
|
( |
) |
Straight line rent, net |
|
( |
) |
|
|
|
|
Total Rental income |
|
|
|
|
|
||
For the three months ended March 31, 2026 and 2025, the following tenants each accounted for more than 10% of our rental revenue as indicated below:
|
2026 |
|
2025 |
General Services Administration - Norfolk, VA, Manteo, NC & Vacaville, CA |
|
||
Dollar General - multiple locations |
|
||
Pre-K - San Antonio, TX |
|
||
Kohl's - Tucson, AZ |
|
N/A |
|
PRA Holdings, Inc. - Norfolk, VA |
|
N/A |
15
The following table presents future minimum rental cash payments due to the Company over the next five calendar years and thereafter as of March 31:
|
As of March 31, |
|
|
|
2026 |
|
|
2026 (9 months remaining) |
$ |
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
Thereafter |
|
|
|
|
$ |
|
|
Lessee Accounting
The Company acquired
The following table summarizes the undiscounted future cash flows for subsequent years ending December 31 attributable to the lease liability as of March 31, 2026 and provides a reconciliation to the lease liability included in the accompanying Consolidated Balance Sheets as of March 31, 2026.
|
As of March 31, |
|
|
|
2026 |
|
|
2026 (9 months remaining) |
|
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
2 |
|
2030 |
|
|
|
Thereafter |
|
|
|
Total undiscounted liability |
$ |
|
|
Present value discount |
|
( |
) |
Lease liability |
$ |
|
|
Discount rate |
|
% |
|
Term Remaining |
|
||
Note 7 – Non-Controlling Interests
Redeemable Non-Controlling Interests (Temporary Equity)
Operating Unit Holders
LMB Owenton I LLC
As part of the Company’s acquisition of
On February 7, 2023, the Operating Partnership entered into a Unit Issuance Agreement and Amendment to Contribution and Subscription Agreement with LMB Owenton I LLC in which the Operating Partnership and LMB Owenton I LLC agreed to
16
delay the Contributor's right to require the redemption of the Contributor's GIP LP Units and to issue an additional
On July 24, 2024, pursuant to the Fifth Amendment to the Amended and Restated Limited Partnership Agreement, the
Norfolk, VA Partnership
In connection with the redemption of this obligation in 2023, the Company accrued approximately $
JCWC Funding, LLC
Series A Redeemable Preferred Units. On June 27, 2024, the Operating Partnership and an accredited investor entered into a Unit Purchase Agreement pursuant to which the Operating Partnership issued and sold to the investor
On April 16, 2026, the Operating Partnership entered into an amendment to modify the redemption terms and update the protective provisions. Pursuant to the amendment, beginning on June 27, 2026, the redemption price will equal $
Following expiration of the initial term on June 27, 2026, the Series A Preferred Unit designation will automatically extend for up to three successive one-year extension periods ending no later than June 27, 2029, unless JCWC has timely delivered a notice of redemption no later than
GIPIA 1220 S. Duff Avenue, LLC - Ames, Iowa (Best Buy). In connection with the acquisition of a
On April 13, 2026, the Operating Partnership entered into an agreement which modified the economic terms of JCWC's Class A Preferred Units by eliminating the
17
following the expiration of the initial two-year term on August 23, 2026, with escalating IRR hurdles of 9.5%, 11.0%, and 12.5% applicable to each respective extension period.
Lloyd M. Bernstein
On February 6, 2025, the Operating Partnership entered into a Contribution and Subscription Agreement with LMB Lewiston, LLC, LMB Ft. Kent, LLC, and LMB Auburn Hills I, LLC (collectively, the "Contributed Entities") and their members. Pursuant to the agreement, the members of the Contributed Entities contributed
Preferred Equity Partners
Brown Family Trust and Brown Family Enterprises, LLC
On February 8, 2023, the Operating Partnership entered into new Amended and Restated Limited Liability Company Agreements for the Norfolk, Virginia properties, GIPVA 2510 Walmer Ave, LLC ("GIPVA 2510") and GIPVA 130 Corporate Blvd, LLC ("GIPVA 130"), in which the Operating Partnership, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new preferred member, Brown Family Enterprises, LLC, through the issuance of preferred membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130. GIPVA 2510 and GIPVA 130 (the “Virginia SPEs”) hold the Company’s Norfolk, Virginia properties. In addition, both of the Virginia SPEs and Brown Family Enterprises, LLC entered into Unit Purchase Agreements in which GIPVA 2510 issued and sold
LC2-NNN Pref, LLC
In connection with the acquisition of the Modiv Portfolio, the Operating Partnership and LC2 entered into an Amended and Restated Limited Liability Company Agreement for GIP SPE (the “GIP SPE Operating Agreement”) pursuant to which LC2 made a $
The Preferred Interest is required to be redeemed in full by the Company on or before August 10, 2025 (the "Mandatory Redemption Date") for a redemption amount equal to the greater of (i) the amount of the LC2 Investment plus the accrued
18
preferred return, and (ii) the Make-Whole Amount. Upon a failure to timely redeem the Preferred Interest, the preferred return will accrue at an increased rate of
On August 7, 2025, the Company exercised its first 12-month extension option under the GIP SPE Operating Agreement, extending the Mandatory Redemption Date from August 10, 2025 to August 10, 2026. In connection with the extension, the Company paid LC2 an extension fee of $
Under the GIP SPE Operating Agreement, GIP SPE is also required to pay to Loci Capital, an affiliate of LC2, an equity fee of 1.5% of the LC2 Investment, with 1% having been paid upon the execution and delivery of the GIP SPE Operating Agreement and the
As of March 31, 2026, the Company had repaid all accrued interest and reduced principal redemption by $2,010,083, leaving an outstanding redemption value of $
Non-Controlling Interest (Permanent Equity)
GIP LP (Former GIP Fund 1 Members)
As part of the Company’s acquisition of
Following these transactions as of March 31, 2026, the Company owned
|
Brown Family Trust and Brown Family Enterprises, LLC |
|
LMB Owenton I LLC |
|
JCWC Funding, LLC |
|
Lloyd M. Bernstein |
|
LC2-NNN Pref, LLC |
|
Total Redeemable Non-Controlling Interests |
|
Non-Controlling Interests - Former GIP Fund 1 Members |
|
|||||||
Balance, December 31, 2024 |
$ |
|
$ |
|
$ |
|
$ |
- |
|
$ |
|
$ |
|
$ |
|
||||||
Issuance of Redeemable Non-Controlling Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Distribution on Non-Controlling Interests |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
|
|
Net income (loss) for the quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance, March 31, 2025 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance, December 31, 2025 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||
Distribution on Non-Controlling Interests |
|
( |
) |
|
( |
) |
|
( |
) |
$ |
( |
) |
$ |
( |
) |
|
( |
) |
|
|
|
Net income (loss) for the quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance, March 31, 2026 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||
19
Note 8 – Equity
Authorized Equity
The Company is authorized to issue up to
In January 2024, the Company redeemed all
Issuance of Equity Securities
On November 13, 2020, the Company raised $
In January 2024, the Company declared and paid final preferred stock dividends of $
On July 24, 2024, the Operating Partnership of Generation Income Properties, Inc. (the “Company”), entered into a Fifth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “LPA Amendment”), pursuant to which the Company, as the general partner of the Operating Partnership, issued partnership interests to LMB Owenton I LLC (“Contributor”) in the form of Series B-1 Preferred Units (the “Series B-1 Preferred Units”).
Also on July 24, 2024, the Operating Partnership and the Contributor entered into a Contribution and Exchange Agreement (the “Contribution Agreement”) pursuant to which the Contributor contributed
Warrants
Private Placement Warrants
On April 25, 2019, the Company raised $
20
On November 13, 2020, the Company raised $
On September 8, 2021, the Company issued and sold, in an underwritten public offering (the “Public Offering”),
Investor Warrants
The Investor Warrants may be exercised on a cashless basis if there is no effective registration statement available for the resale of the shares of common stock underlying such warrants. In addition, after
Representative Warrants
In addition, the Company issued to Maxim Group LLC (or its designee) warrants to purchase an aggregate of
The Company has
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As of March 31, |
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Issue Date |
2026 |
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Warrants |
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Weighted Average Price |
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Weighted Average Remaining Life |
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As of December 31, 2025 |
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$ |
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Exercised |
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( |
) |
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As of March 31, 2026 |
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$ |
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|||
Warrants exercisable |
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$ |
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Warrants |
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Weighted Average Price |
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Weighted Average Remaining Life |
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|||
As of December 31, 2024 |
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$ |
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|||
Exercised |
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As of March 31, 2025 |
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$ |
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Warrants exercisable |
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$ |
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There was
Stock Compensation
Generation Income Properties, Inc. 2020 Omnibus Incentive Plan
21
In connection with the Public Offering, the Company's Board of Directors adopted and stockholders approved, the Generation Income Properties, Inc. 2020 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), which became effective upon the completion of the Public Offering. The Omnibus Incentive Plan reserves
Restricted Common Shares issued to the Board and Employees
In March 2024, the board approved grants of restricted stock to directors effective June 15, 2024, allowing an elective deferral of up to three years. All board members elected to defer restricted stock and dividend equivalents for the full three year period.
The following is a summary of restricted shares for the three months ended March 31, 2026 and 2025:
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2026 |
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2025 |
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||
Number of Shares Outstanding at beginning of period |
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||
Restricted Shares Issued |
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||
Restricted Shares Vested |
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( |
) |
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Number of Shares Outstanding at end of period |
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The Company recorded stock based compensation expense of $165,000 and $
Cash Distributions
The Company announced that its Board of Directors determined to suspend the Company’s regular dividend, commencing with the monthly dividends that would have been paid in July 2024.
The issuance of future distributions will be determined by the Company's board of directors based on the Company's financial condition and such other factors as the Company's board of directors deems relevant. The Company has not established a minimum distribution, and the Company's charter does not require that the Company issue distributions to its stockholders other than as necessary to meet REIT qualification standards.
22
Note 9 – Debt
Mortgage Loans
The Company had the following mortgage loans outstanding as of March 31, 2026 and December 31, 2025, respectively:
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Occupying Tenant |
Property Location |
Original Loan Amount |
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|
Interest Rate at 12/31/2025 |
|
Maturity Date |
Balance at 03/31/2026 |
|
Balance at 12/31/2025 |
|
Debt Service Coverage Ratios ("DSCR") Required |
|||
7-Eleven Corporation |
Washington, D.C. |
$ |
|
|
|
$ |
|
$ |
|
||||||
General Services Administration-Navy & AYMCA |
Norfolk, VA |
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||||||
PRA Holdings, Inc. |
Norfolk, VA |
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||||||
Sherwin Williams Company |
Tampa, FL |
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(a) |
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||||||
General Services Administration-FBI |
Manteo, NC |
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(b) |
(c) |
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||||||
La-Z-Boy Inc. |
Rockford, IL |
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(c) |
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||||||
Fresenius Medical Care Holdings, Inc. |
Chicago, IL |
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(b) |
(c) |
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||||||
Starbucks Corporation |
Tampa, FL |
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(b) |
(c) |
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||||||
Kohl's Corporation |
Tucson, AZ |
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(b) |
(c) |
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||||||
City of San Antonio (PreK) |
San Antonio, TX |
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(d) |
(a) |
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||||||
Dollar General Market |
Bakersfield, CA |
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(d) |
(a) |
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Dollar General |
Big Spring, TX |
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(d) |
(a) |
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Dollar General |
Castalia, OH |
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(d) |
(a) |
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||||||
Dollar General |
East Wilton, ME |
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(d) |
(a) |
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||||||
Dollar General |
Lakeside, OH |
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(d) |
(a) |
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||||||
Dollar General |
Litchfield, ME |
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(d) |
(a) |
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||||||
Dollar General |
Mount Gilead, OH |
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(d) |
(a) |
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||||||
Dollar General |
Thompsontown, PA |
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(d) |
(a) |
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||||||
Dollar Tree Stores, Inc. |
Morrow, GA |
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(d) |
(a) |
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||||||
General Services Administration |
Vacaville, CA |
|
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(d) |
(a) |
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||||||
Walgreens |
Santa Maria, CA |
|
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(d) |
(a) |
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||||||
Best Buy Co., Inc. |
Ames, IA |
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(a) |
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Zaxby's |
Sanford, FL |
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(e) |
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||||||
Dollar General |
Cleveland, TN |
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(e) |
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|
||||||
Tractor Supply |
Kernersville, NC |
|
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||||||
|
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$ |
|
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$ |
|
$ |
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|||
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|
Less Debt Discount, net |
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( |
) |
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( |
) |
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Less Debt Issuance Costs, net |
|
( |
) |
|
( |
) |
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$ |
|
$ |
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|
||||||||
(a) Fixed via interest rate swap
(b) One loan in the amount of $
(c) Adjustment effective April 1, 2027 equal to 5-year Treasury plus
(d) One loan in the amount of $
(e) Refinanced on May 1, 2026 extending the maturity date to May 1, 2031 with interest accruing at a fixed rate of 5.70%.
23
The Company amortized debt issuance costs and debt discount during the three months ended March 31, 2026 and 2025 to interest expense of approximately $
Each mortgage loan requires the Company to maintain certain debt service coverage ratios as noted above. In addition,
On April 1, 2022, the Company entered into two mortgage loan agreements with an aggregate balance of $
On August 10, 2023, GIP13, LLC, a Delaware limited liability company and wholly owned subsidiary of GIP SPE ("GIP Borrower"), entered into a Loan Agreement with Valley Bank pursuant to which Valley Bank made a loan to the Company in the amount of $
The Company's President and CEO entered into a personal, full recourse guarantee with a $
On October 14, 2022, the Company entered into a loan transaction that is evidenced by a secured non-convertible promissory note to Brown Family Enterprises, LLC, a preferred equity partner and therefore a related party, for $
On June 13, 2025, the Company, through its subsidiary GIPDC 3707 14TH ST, LLC, entered into a loan agreement with Valley National Bank in the principal amount of $
24
automatically extend from March 31, 2026 to June 13, 2030, and beginning July 13, 2026, principal and interest will amortize over a 25-year schedule. The loan is supported by a Guaranty of Nonrecourse Carve-out Obligations executed by David Sobelman, the Company’s Chief Executive Officer, in favor of Valley National Bank. During October 2025, the Company satisfied the required conditions for the release of the $
As previously discussed in Note 3, on March 3, 2026, the Company transferred one hundred percent (100%) of the limited liability company interests of GIPDC 3707 14th St. LLC to Brown Family Enterprises, LLC, a related party, which includes the Valley National Bank mortgage loan in the principal amount of $
Minimum required principal payments on the Company’s debt for subsequent years ending March 31 are as follows:
|
Mortgage Loans |
|
Loan Payable - Related Party |
|
Total |
|
|||
2026 (9 months remaining) |
$ |
|
$ |
|
$ |
|
|||
2027 |
|
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2028 |
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2029 |
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2030 |
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Thereafter |
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|
$ |
|
$ |
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$ |
|
|||
Other loans payable
Brown Family Enterprises - 2022 & 2023 Loans
On October 14, 2022, the Company entered into a loan transaction that is evidenced by a secured non-convertible promissory note to Brown Family Enterprises, LLC, a preferred equity partner and therefore a related party, for $
Brown Family Enterprises - 2025 Loan
On April 25, 2025, the Company entered into a secured promissory note with Brown Family Enterprises, LLC, a related party, in the original principal amount of $
On February 10, 2026, Brown Family Enterprises, LLC sold and assigned the note to Silverback Capital Corporation, an unrelated third party, at which time the total outstanding balance was $
On March 3, 2026, the Retained Balance Note was satisfied in full through the transfer of one hundred percent (100%) of the limited liability company interests of GIPDC 3707 14th St. LLC to Brown Family Enterprises, LLC pursuant to an Assignment of Limited Liability Company Interests and Satisfaction Agreement. As a result, the Company recognized a gain on extinguishment of debt of $
Silverback Capital Corporation - Convertible Note
On February 10, 2026, the Company entered into an Amended and Restated Convertible Note (the "First Amended Note") in the principal amount of $
25
and restates that certain Secured Promissory Note, dated April 25, 2025, in the original principal amount of $
On February 24, 2026, the First Amended Note was further amended and restated by a second Amended and Restated Convertible Note (the "Second Amended Note"), which amended the First Amended Note by (i) changing the maturity date to
The Company has determined that the Second Amended Note will be settled entirely through the issuance of up to 2,400,000 shares of common stock, which have been reserved for conversion and are considered issued but not yet outstanding until delivered to the Noteholder. Accordingly, upon issuance of the Second Amended Note, the Company recorded the full principal amount of $551,437 as an increase to stockholders' equity, consisting of $4,969 to common stock at par value of $0.01 per share based on the 496,930 shares delivered during the three months ended March 31, 2026, and $546,468 to additional paid-in capital. The remaining 1,903,070 shares reserved for future delivery are considered issued but not outstanding as of March 31, 2026, with the corresponding par value of $19,031 included in additional paid-in capital until such shares are delivered. No liability has been recorded on the Company's consolidated balance sheet in connection with the Second Amended Note. As the Second Amended Note is classified as an equity instrument, no interest expense has been recognized in connection with the Second Amended Note during the three months ended March 31, 2026.
2025 Broker Loans
On May 29, 2025, the Company, through the Operating Partnership, entered into a loan transaction for $
On May 29, 2025, GIPFL 1300 S Dale Mabry, LLC (“GIPFL”), an indirect wholly owned subsidiary of the Company, entered into a loan for $
Both amounts are included in Other loans payable on the consolidated balance sheet as of March 31, 2026.
Executive Loan
On May 29, 2025, the Company, through the Operating Partnership, entered into a loan transaction with the Company’s Chief Executive Officer, for $
Board of Director Loan
On February 12, 2026, GIPVA 2510 Walmer Ave., LLC, an indirect subsidiary of the Company, entered into a $
26
Generation Income Properties, LP and secured by the guarantor’s equity interest in the borrowing entity. The lender is an affiliate of a member of the Company’s board of directors.
Note 10 – Related Party Transactions
David Sobelman - Chief Executive Officer
Guaranty Fees. During the three months ended March 31, 2026, the Company incurred guaranty fee expense of $61,864 payable to the Company's Chief Executive Officer, recorded to interest expense. As of March 31, 2026, $557,501 of guaranty fees remained payable, included in accrued expenses - related party on the consolidated balance sheet.
QCCR Investments, LLC - Board of Director Affiliate
On February 12, 2026, GIPVA 2510 Walmer Ave., LLC, an indirect subsidiary of the Company, entered into a $125,000 promissory note with QCCR Investments, LLC, an affiliate of a member of the Company's board of directors, bearing interest at 12% per annum and including a 3% origination fee. The note matures nine months from issuance or earlier upon the sale of the underlying real estate asset located at 2510 Walmer Ave., Norfolk, Virginia. As of March 31, 2026, the outstanding principal balance of $125,000 remains payable.
Note 11 – Derivative Financial Instruments and Fair Value Measurements
On August 10, 2023, as previously disclosed, the Company entered into a variable loan agreement for $
In November 2020, the Company entered into a $
The Company has not elected hedge accounting and has reported periodic changes in derivative valuations in gain (loss) on derivative valuation, net for $155,851 and ($293
The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. Certain inputs, which are material to the value, are considered Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
27
The carrying amount of cash and cash equivalents and restricted cash reported in our consolidated balance sheets approximates fair value due to the short-term nature of these instruments.
The carrying amounts and estimated fair values of our financial instruments are as follows:
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
Carrying Amount |
|
|
Fair Value |
|
|
Carrying Amount |
|
|
Fair Value |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted cash |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps |
|
|
|
|
|
|
|
|
|
|
|
||||
|
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|
|
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|
||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps |
|
|
|
|
|
|
|
|
|
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|
||||
Note 12 – Subsequent Events
The Company has evaluated subsequent events through the date these financial statements were issued and has identified the following event requiring disclosure.
Amendment to GIPIA 1220 S. Duff Avenue, LLC Operating Agreement - Best Buy, Ames, Iowa
On April 13, 2026, the Operating Partnership entered into a Second Amended and Restated Limited Liability Company Agreement of the Iowa SPE modifying the economic terms of JCWC's Class A Preferred Units and introducing extension period mechanics through August 23, 2029. See Note 7 - Non-Controlling Interests for additional information.
Seventh Amendment to Operating Partnership Agreement — Series A Redeemable Preferred Units
On April 16, 2026, the Operating Partnership entered into the Seventh Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, which amended and restated the designation of the Series A Redeemable Preferred Units held by JCWC, modifying the redemption terms, introducing extension period mechanics through June 27, 2029, and updating the protective provisions applicable to the Series A Redeemable Preferred Units. See Note 7 - Non-Controlling Interests for additional information.
Sale of Morrow, Georgia Property - Dollar Tree
On April 17, 2026, GIPGA 2383 Lake Harbin Road, LLC, an indirect wholly owned subsidiary of the Company, completed the sale of its Dollar Tree-occupied net lease retail property located at 2383 Lake Harbin Road, Morrow, Georgia (the "Morrow Property") to Vanguard Asset Holdings, LLC, Series 102, pursuant to a Purchase and Sale Agreement entered into effective as of March 23, 2026, as amended on April 2, 2026. The Morrow Property was sold for a gross purchase price of $1,458,000, resulting in net proceeds to the Company of $639,152 after payment of closing costs, commissions, and other settlement charges.
In connection with the sale, the Company repaid $667,000 to Valley National Bank at closing, representing the full payoff of the mortgage loan secured by the Morrow Property. The Company intends to apply the net proceeds of $639,152 toward a partial redemption of the LC2 Preferred Interest.
Refinancing - Zaxby's, Sanford, Florida and Dollar General, Cleveland, Tennessee
On May 1, 2026, LMB Auburn Hills I, LLC and LMB Lewiston, LLC, indirect wholly owned subsidiaries of the Company, entered into a commercial term loan with Hancock Whitney Bank in the aggregate principal amount of $3,800,000 (the "Hancock Whitney Loan"). The Hancock Whitney Loan bears interest at a fixed rate of 5.70% per annum and matures on May 1, 2031. Principal and interest payments of $23,986 per month commence on June 1, 2026, based on a 25-year amortization schedule, with a balloon payment due at maturity. The Hancock Whitney Loan is secured by a mortgage on the Company's Zaxby's-occupied net lease retail property located at 3815 South Orlando Drive, Sanford, Florida and a deed of trust on the Company's Dollar General-occupied net lease retail property located at 5780 East Waterlevel Highway, Cleveland, Tennessee.
In connection with the closing of the Hancock Whitney Loan, the Company repaid in full the outstanding balances of the
28
Valley National Bank mortgage loans secured by the Sanford, Florida and Cleveland, Tennessee properties, which totaled $3,696,738 in the aggregate. The net proceeds after payoff of the existing Valley National Bank loans and payment of closing costs were applied to general corporate purposes.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward‑Looking Statements
This report contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained herein. When used in this report, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. Actual results, performance or achievements could differ materially from the results expressed in, or implied by these forward-looking statements. Readers should be aware of important factors that, in some cases, have affected, and in the future could affect, actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, funds derived from operations, cash available for distribution, cash flows, liquidity and prospects include, but are not limited to, the risk factors listed from time to time in our reports with the Securities and Exchange Commission, including, in particular, those set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as amended.
In this Quarterly Report on Form 10-Q, references to the “Company,” “we,” “us,” “our” or similar terms refer to Generation Income Properties, Inc., a Maryland corporation, together with its consolidated subsidiaries, including Generation Income Properties, L.P., a Delaware limited partnership, which we refer to as our operating partnership (the “Operating Partnership”). As used in this Quarterly Report, an affiliate, or person affiliated with a specified person, is a person that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
Overview
We are an internally managed, Maryland corporation focused on acquiring retail, office and industrial real estate located in major U.S. markets. We elected to be taxed as a REIT for federal income tax purposes. Substantially all of the Company’s assets are held by, and operations are conducted through, the Operating Partnership and the Operating Partnership’s direct and indirect subsidiaries. The Company is the general partner of the Operating Partnership and as of March 31, 2026 owned 99.6% of the outstanding common units of the Operating Partnership. The Company formed a Maryland entity GIP REIT OP Limited LLC in 2018 that owns 0.001% of the Operating Partnership.
Public Offering and Nasdaq Listing
In September 2021, the Company closed an underwritten public offering of 1,665,000 units at a price to the public of $10 per unit generating net proceeds of $13.8 million. Each unit consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price equal to $10 per share. The common stock and warrants included in the units (which were separated into one share of common stock and one warrant) currently trade on the Nasdaq Capital Market (“Nasdaq”) under the symbols “GIPR” and “GIPRW,” respectively.
Our Investments
The following are characteristics of our properties as of March 31, 2026:
29
Given the nature of our leases, our tenants either pay the realty taxes directly or reimburse us for such costs. We believe all of our properties are adequately covered by insurance.
The table below presents an overview of the properties in our portfolio as of March 31, 2026:
Property Type |
Location |
Rentable Square Feet |
|
Tenant |
S&P Credit Rating (1) |
IG |
Remaining Term (Yrs) |
|
Options (Number x Yrs) |
Contractual Rent Escalations (3) |
ABR (2) |
|
ABR per Sq. Ft. |
|
||||
Office |
Norfolk, VA |
|
49,902 |
|
General Services Administration-Navy |
AA+ |
Y |
|
2.5 |
|
N/A |
Yes |
|
640,742 |
|
|
12.84 |
|
Office |
Norfolk, VA |
|
22,247 |
|
Armed Services YMCA of the U.S.A. |
N/A |
N/A |
|
8.1 |
|
2 x 5 |
Yes |
|
411,570 |
|
|
18.50 |
|
Office |
Norfolk, VA |
|
34,847 |
|
PRA Holdings, Inc. |
BB |
N |
|
1.4 |
|
1 x 5 |
Yes |
|
823,909 |
|
|
23.64 |
|
Retail |
Tampa, FL |
|
3,500 |
|
Sherwin Williams Company |
BBB |
Y |
|
2.3 |
|
5 x 5 |
Yes |
|
126,788 |
|
|
36.23 |
|
Office |
Manteo, NC |
|
7,543 |
|
General Services Administration-FBI |
AA+ |
Y |
|
2.9 |
|
1 x 5 |
Yes |
|
100,682 |
|
|
13.35 |
|
Retail |
Rockford, IL |
|
15,288 |
|
La-Z-Boy Inc. |
Not Rated |
Not Rated |
|
1.6 |
|
4 x 5 |
Yes |
|
366,600 |
|
|
23.98 |
|
Medical-Retail |
Chicago, IL |
|
10,947 |
|
Fresenius Medical Care Holdings, Inc. |
BBB- |
Y |
|
7.6 |
|
2 x 5 |
Yes |
|
242,912 |
|
|
22.19 |
|
Retail |
Tampa, FL |
|
2,642 |
|
Starbucks Corporation |
BBB+ |
Y |
|
0.9 |
|
2 x 5 |
Yes |
|
148,216 |
|
|
56.10 |
|
Retail |
Tucson, AZ |
|
88,408 |
|
Kohl's Corporation |
BB- |
N |
|
3.8 |
|
7 x 5 |
Yes |
|
864,630 |
|
|
9.78 |
|
Retail |
San Antonio, TX |
|
50,000 |
|
City of San Antonio (PreK) |
AAA |
Y |
|
3.3 |
|
1 x 8 |
Yes |
|
924,000 |
|
|
18.48 |
|
Retail |
Bakersfield, CA |
|
18,827 |
|
Dollar General Market |
BBB |
Y |
|
2.3 |
|
3 x 5 |
Yes |
|
361,075 |
|
|
19.18 |
|
Retail |
Big Spring, TX |
|
9,026 |
|
Dollar General |
BBB |
Y |
|
4.3 |
|
3 x 5 |
Yes |
|
86,041 |
|
|
9.53 |
|
Retail |
Castalia, OH |
|
9,026 |
|
Dollar General |
BBB |
Y |
|
9.2 |
|
3 x 5 |
Yes |
|
79,320 |
|
|
8.79 |
|
Retail |
East Wilton, ME |
|
9,100 |
|
Dollar General |
BBB |
Y |
|
4.3 |
|
3 x 5 |
Yes |
|
112,439 |
|
|
12.36 |
|
Retail |
Lakeside, OH |
|
9,026 |
|
Dollar General |
BBB |
Y |
|
9.2 |
|
3 x 5 |
Yes |
|
81,036 |
|
|
8.98 |
|
Retail |
Litchfield, ME |
|
9,026 |
|
Dollar General |
BBB |
Y |
|
4.5 |
|
3 x 5 |
Yes |
|
92,960 |
|
|
10.30 |
|
Retail |
Mount Gilead, OH |
|
9,026 |
|
Dollar General |
BBB |
Y |
|
4.3 |
|
3 x 5 |
Yes |
|
85,924 |
|
|
9.52 |
|
Retail |
Thompsontown, PA |
|
9,100 |
|
Dollar General |
BBB |
Y |
|
4.6 |
|
3 x 5 |
Yes |
|
85,998 |
|
|
9.45 |
|
Retail |
Morrow, GA |
|
10,906 |
|
Dollar Tree Stores, Inc. |
BBB |
Y |
|
4.3 |
|
2 x 5 |
Yes |
|
109,060 |
|
|
10.00 |
|
Office |
Vacaville, CA |
|
11,014 |
|
General Services Administration |
AA+ |
Y |
|
0.4 |
|
N/A |
No |
|
257,050 |
|
|
23.34 |
|
Retail |
Santa Maria, CA |
|
14,490 |
|
Walgreens (4) |
Not Rated |
N |
|
6.0 |
|
N/A |
No |
|
369,000 |
|
|
25.47 |
|
Retail |
Ames, IA |
|
30,259 |
|
Best Buy Co., Inc. |
BBB+ |
Y |
|
4.0 |
|
2 x 5 |
Yes |
|
452,372 |
|
|
14.95 |
|
Retail |
Sanford, FL |
|
4,108 |
|
Zaxby's |
Not Rated |
Not Rated |
|
13.7 |
|
4 x 5 |
Yes |
|
243,800 |
|
|
59.35 |
|
Retail |
Cleveland, TN |
|
10,640 |
|
Dollar General |
BBB |
Y |
|
10.1 |
|
5 x 5 |
Yes |
|
119,727 |
|
|
11.25 |
|
Retail |
Kernersville, NC |
|
19,097 |
|
Tractor Supply |
BBB |
Y |
|
9.3 |
|
4 x 5 |
Yes |
|
318,150 |
|
|
16.66 |
|
Tenants - All Properties |
|
|
467,995 |
|
|
|
|
|
|
|
|
$ |
7,504,001 |
|
$ |
16.03 |
|
|
Distributions
From inception through March 31, 2026, we have distributed $5,031,548 to common stockholders.
Recent Developments
Nasdaq Listing
As previously reported, on August 20, 2025, the Listing Qualifications department (the “Staff”) of The Nasdaq Stock Market
30
LLC (“Nasdaq”) notified the Company that it was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Requirement”), which requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing or meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations. The Company thereafter requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to address the deficiency, which was held on March 24, 2026. By decision dated April 17, 2026, the Panel granted the Company an extension through August 4, 2026, to evidence compliance with the Equity Requirement, which the Panel indicated, constitutes the full extent of the Panel’s discretion in this matter. There can be no assurance that the Company will be able to regain compliance with the applicable Nasdaq listing requirements by August 4, 2026.
Brown Family Enterprises — Note Restructuring and LLC Interest Transfer
On April 25, 2025, the Company, through its Operating Partnership, entered into a Secured Promissory Note with Brown Family Enterprises, LLC ("Brown"), a related party, in the original principal amount of $1,000,000. The note bore simple interest at an initial rate of 16% per annum for the first ninety days, reverting to 9% per annum thereafter. The maturity date was subsequently extended to December 15, 2025 pursuant to a First Amendment entered into on October 27, 2025, and further extended to January 30, 2026 pursuant to a Second Amendment entered into on December 15, 2025. As of January 31, 2026, the total outstanding balance under the note, including principal, capitalized interest, and accrued but unpaid interest, was $1,151,437.
On February 10, 2026, Brown sold and assigned the note to Silverback Capital Corporation ("Silverback"), an unrelated third party. Concurrent with the assignment, the Company entered into an Amended and Restated Convertible Note with Silverback in the principal amount of $551,437, and issued to Brown a Retained Balance Promissory Note in the principal amount of $600,000, bearing interest at 0% per annum. On March 3, 2026, the Retained Balance Note was satisfied in full through the transfer of one hundred percent (100%) of the limited liability company interests of GIPDC 3707 14th St. LLC to Brown pursuant to an Assignment of Limited Liability Company Interests and Satisfaction Agreement. As a result of the transfer, the Company recognized a loss on transfer of LLC interests in satisfaction of debt of $185,069 during the three months ended March 31, 2026. The Company retained a contingent right to receive fifty percent (50%) of net sale proceeds from any future sale of the DC property in excess of a $600,000 return of capital threshold to Brown and continues to serve as exclusive property manager of the DC property. See Note 3 - Real Estate Assets and Note 9 - Debt for additional information.
Silverback Capital Corporation — Convertible Note
On February 10, 2026, the Company entered into an Amended and Restated Convertible Note with Silverback Capital Corporation (the "Noteholder") in the principal amount of $551,437, bearing interest at 9% per annum and maturing February 24, 2027. The note is convertible into shares of the Company's common stock at a conversion price equal to 80% of the average of the three lowest trading prices of the Company's common stock during the ten trading days preceding conversion, subject to a floor price of $0.10 per share and a 19.99% exchange cap on total shares issuable without stockholder approval. The Company has determined that the note will be settled entirely through the issuance of up to 2,400,000 shares of common stock reserved for conversion. Accordingly, upon issuance, the Company recorded the full principal amount of $551,437 as an increase to stockholders' equity, consisting of $24,000 to common stock at par value of $0.01 per share and $527,437 to additional paid-in capital. No liability has been recorded on the Company's consolidated balance sheet in connection with the note. During the three months ended March 31, 2026, 496,930 shares were delivered to the Noteholder. As of March 31, 2026, the outstanding balance of the convertible note was approximately $401,482 and 1,903,070 shares remain reserved for future delivery under the note. See Note 9 - Debt for additional information.
Valley National Bank — 7-Eleven, Washington, D.C.
On June 13, 2025, GIPDC 3707 14th St. LLC, an indirect subsidiary of the Company, entered into a mortgage loan with Valley National Bank in the original principal amount of $1,100,000, secured by the Company's 7-Eleven net lease retail property located at 3707-3711 14th Street NW, Washington, D.C., bearing interest at a fixed rate of 6.50% per annum. During November 2025, the Company received the $350,000 disbursement of renewal funds following satisfaction of the required lease renewal conditions. As a result of the transfer of GIPDC 3707 14th St. LLC to Brown Family Enterprises, LLC on March 3, 2026, the $1,100,000 Valley National Bank mortgage loan was assumed by the transferee as an obligation of the entity and removed from the Company's consolidated balance sheet. See Note 3 — Real Estate Assets for additional information.
Seventh Amendment to Operating Partnership Agreement - Series A Redeemable Preferred Units
On April 16, 2026, the Operating Partnership entered into the Seventh Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, which amended and restated the designation of the Series A
31
Redeemable Preferred Units held by JCWC Funding, LLC. The Seventh Amendment modifies the redemption terms, introduces extension period mechanics through June 27, 2029, and updates the protective provisions applicable to the Series A Redeemable Preferred Units. Beginning June 27, 2026, the redemption price will equal $5.00 plus $0.075 per unit multiplied by the number of full years elapsed since the original issuance date of June 27, 2024.
Amendment to GIPIA 1220 S. Duff Avenue, LLC Operating Agreement - Best Buy, Ames, Iowa
On April 13, 2026, the Operating Partnership entered into a Second Amended and Restated Limited Liability Company Agreement of GIPIA 1220 S. Duff Avenue, LLC, modifying the economic terms of JCWC Funding LLC's preferred equity investment by eliminating the 1.5% per annum accrued component of the preferred return and providing for a simplified preferred return of 6.5% per annum, payable monthly in cash, and introducing extension period mechanics through August 23, 2029.
Sale of Morrow, Georgia Property - Dollar Tree
On April 17, 2026, the Company, completed the sale of its Dollar Tree-occupied net lease retail property located in Morrow, Georgia for a purchase price of $1,458,000, subject to customary prorations and adjustments, resulting in net proceeds to the Company of $639,152.
Results of Operations
Operating results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:
Revenue
During the three months ended March 31, 2026, total revenue from operations was $2,184,204, as compared to $2,381,595 for the three months ended March 31, 2025. Revenue decreased by $197,391 during the three months ended March 31, 2026, respectively, compared with the three months ended March 31, 2025, driven by the disposition of two properties during the second quarter of 2025 and three properties during the fourth quarter of 2025.
During the three months ended March 31, 2026, we incurred total operating expenses of $3,420,896, as compared to $3,857,376 for the three months ended March 31, 2025. Operating expenses decreased overall by $436,480 as follows:
|
Three months ended March 31, |
|
|
|
|||||
|
2026 |
|
2025 |
|
Change |
|
|||
General and administrative expense |
$ |
406,443 |
|
$ |
505,378 |
|
$ |
(98,935 |
) |
Building expenses |
|
509,738 |
|
|
636,225 |
|
|
(126,487 |
) |
Depreciation and amortization |
|
1,134,428 |
|
|
1,292,761 |
|
|
(158,333 |
) |
Interest expense, net |
|
981,598 |
|
|
1,182,267 |
|
|
(200,669 |
) |
Compensation costs |
|
388,689 |
|
|
240,745 |
|
|
147,944 |
|
Total expenses |
$ |
3,420,896 |
|
$ |
3,857,376 |
|
$ |
(436,480 |
) |
Net loss
32
During the three months ended March 31, 2026 and 2025, we generated a net loss of $1,266,147, and $1,797,460, respectively.
Net income attributable to non-controlling interests
During the three months ended March 31, 2026 and 2025, net income attributable to non-controlling interest was $864,988, and $934,399, respectively.
Net loss attributable to common shareholders
During the three months ended March 31, 2026 and 2025, we generated a net loss attributable to our shareholders of $2,131,135 and $2,731,859, respectively.
Liquidity and Capital Resources
We require capital to fund our investment activities and operating expenses. Our capital sources may include net proceeds from offerings of our equity securities, cash flow from operations, proceeds from property dispositions, and borrowings under credit facilities. As of March 31, 2026, we had total cash (unrestricted and restricted) of $323,968, properties with a gross cost basis of $93,074,787 and outstanding mortgage loans with a principal balance of $48,287,293.
As a result of our recurring losses, our projected cash requirement to cover operating needs, and our current liquidity, management has concluded that substantial doubt exists with respect to the Company's ability to continue as a going concern within one year after the date these consolidated financial statements were issued. Management's plans to address this uncertainty include refinancing and extending terms for preferred equity and loans, optimizing portfolio assets, and potentially divesting where property performance has not met management objectives or where market conditions provide favorable opportunities.
We currently obtain the capital required to primarily invest in and manage a diversified portfolio of commercial net lease real estate investments and conduct our operations from the proceeds of equity offerings, debt financings, preferred minority interest obtained from third parties, issuance of Operating Partnership units and from any undistributed funds from our operations.
CEO Guaranty Arrangements
Our President and CEO has personally guaranteed repayment of the $1.2 million loan secured by our Sherwin-Williams - Tampa, FL property and has provided a guaranty of the nonrecourse carveout liabilities and obligations for the GSA and PRA Holdings, Inc. - Norfolk, VA mortgage loans with an aggregate principal balance of approximately $11.1 million. During the three months ended March 31, 2026 and 2025, the Company incurred guaranty fee expense of $61,864 and $97,692, respectively, payable to our President and CEO, of which $557,501 remained payable as of March 31, 2026.
On May 29, 2025, the Company's President and CEO provided a $610,000 loan to the Company to fund closing costs in connection with two property dispositions, bearing interest at 5.75% per annum. The loan was extended to December 31, 2025 and remained unpaid as of March 31, 2026. The Company is working to resolve the outstanding balance.
On February 12, 2026, one of our subsidiaries entered into a loan transaction for $125,000 from QCCR Investments, LLC, an affiliate of Richard D. Russell, a director of the Company. All principal, together with accrued but unpaid interest at 12% per annum and an origination fee of 3% of the principal amount, is due on November 12, 2026, or earlier upon the sale of the Company's real estate asset located at 2510 Walmer Ave in Norfolk, Virginia. The loan is secured by 100% of the Company's equity interest in the subsidiary that holds the Walmer Ave property.
As of March 31, 2026, the Company has aggregate debt maturities of approximately $11,354,688 due within the next nine months, including the Brown Family Enterprises loans and mortgage loans secured by properties in Sanford, Florida and Cleveland, Tennessee maturing in May 2026. The Company is actively pursuing refinancing arrangements and other capital solutions to address these near-term obligations. There can be no assurance that the Company will be successful in refinancing these obligations on acceptable terms, or at all.
We currently obtain the capital required to primarily invest in and manage a diversified portfolio of commercial net lease real estate investments and conduct our operations from the proceeds of equity offerings, debt financings, preferred minority interest obtained from third parties, issuance of Operating Partnership units and from any undistributed funds from our operations.
As of March 31, 2026 and December 31, 2025, we had accounts payable, accrued expenses and insurance payable totaling $4,172,236 and $3,771,064, respectively.
33
Outstanding mortgage loans payable consisted of the following as of March 31, 2026 and December 31, 2025, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Occupying Tenant |
Property Location |
Original Loan Amount |
|
|
Interest Rate at 12/31/2025 |
|
Maturity Date |
Balance at 03/31/2026 |
|
Balance at 12/31/2025 |
|
Debt Service Coverage Ratios ("DSCR") Required |
|||
7-Eleven Corporation |
Washington, D.C. |
$ |
750,000 |
|
|
6.50% |
|
6/13/2030 |
$ |
- |
|
$ |
1,100,000.00 |
|
1.50 |
General Services Administration-Navy & AYMCA |
Norfolk, VA |
|
8,260,000 |
|
|
6.15% |
|
8/30/2029 |
|
6,875,214 |
|
|
6,926,665 |
|
1.25 |
PRA Holdings, Inc. |
Norfolk, VA |
|
5,216,749 |
|
|
6.15% |
|
8/23/2029 |
|
4,259,789 |
|
|
4,291,659 |
|
1.25 |
Sherwin Williams Company |
Tampa, FL |
|
1,286,664 |
|
|
3.72% |
(a) |
8/10/2028 |
|
1,213,707 |
|
|
1,222,259 |
|
1.20 |
General Services Administration-FBI |
Manteo, NC |
|
928,728 |
|
(b) |
3.85% |
(c) |
3/31/2032 |
|
854,326 |
|
|
866,868 |
|
1.50 |
La-Z-Boy Inc. |
Rockford, IL |
|
2,100,000 |
|
|
3.85% |
(c) |
3/31/2032 |
|
1,946,715 |
|
|
1,960,814 |
|
1.50 |
Fresenius Medical Care Holdings, Inc. |
Chicago, IL |
|
1,727,108 |
|
(b) |
3.85% |
(c) |
3/31/2032 |
|
1,588,688 |
|
|
1,612,010 |
|
1.50 |
Starbucks Corporation |
Tampa, FL |
|
1,298,047 |
|
(b) |
3.85% |
(c) |
3/31/2032 |
|
1,193,980 |
|
|
1,211,508 |
|
1.50 |
Kohl's Corporation |
Tucson, AZ |
|
3,964,745 |
|
(b) |
3.85% |
(c) |
3/31/2032 |
|
3,646,955 |
|
|
3,700,494 |
|
1.50 |
City of San Antonio (PreK) |
San Antonio, TX |
|
6,444,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
6,197,220 |
|
|
6,223,604 |
|
1.50 |
Dollar General Market |
Bakersfield, CA |
|
2,428,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
2,335,017 |
|
|
2,344,958 |
|
1.50 |
Dollar General |
Big Spring, TX |
|
635,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
610,682 |
|
|
613,282 |
|
1.50 |
Dollar General |
Castalia, OH |
|
556,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
534,707 |
|
|
536,984 |
|
1.50 |
Dollar General |
East Wilton, ME |
|
726,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
698,197 |
|
|
701,170 |
|
1.50 |
Dollar General |
Lakeside, OH |
|
567,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
545,286 |
|
|
547,608 |
|
1.50 |
Dollar General |
Litchfield, ME |
|
624,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
600,103 |
|
|
602,658 |
|
1.50 |
Dollar General |
Mount Gilead, OH |
|
533,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
512,588 |
|
|
514,770 |
|
1.50 |
Dollar General |
Thompsontown, PA |
|
556,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
534,707 |
|
|
536,984 |
|
1.50 |
Dollar Tree Stores, Inc. |
Morrow, GA |
|
647,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
622,222 |
|
|
624,871 |
|
1.50 |
General Services Administration |
Vacaville, CA |
|
1,293,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
1,243,483 |
|
|
1,248,777 |
|
1.50 |
Walgreens |
Santa Maria, CA |
|
3,041,000 |
|
(d) |
7.47% |
(a) |
8/10/2028 |
|
2,924,542 |
|
|
2,936,993 |
|
1.50 |
Best Buy Co., Inc. |
Ames, IA |
|
2,495,000 |
|
|
6.29% |
(a) |
8/23/2029 |
|
2,495,000 |
|
|
2,495,000 |
|
1.50 |
Zaxby's |
Sanford, FL |
|
2,947,000 |
|
|
6.29% |
(e) |
5/14/2026 |
|
2,473,792 |
|
|
2,482,944 |
|
1.30 |
Dollar General |
Cleveland, TN |
|
1,350,000 |
|
|
3.50% |
(e) |
5/14/2026 |
|
1,216,935 |
|
|
1,224,544 |
|
1.25 |
Tractor Supply |
Kernersville, NC |
|
3,507,000 |
|
|
2.90% |
|
10/22/2031 |
|
3,163,438 |
|
|
3,184,170 |
|
1.20 |
|
|
$ |
53,881,041 |
|
|
|
|
|
$ |
48,287,293 |
|
$ |
49,711,594 |
|
|
|
|
|
|
|
|
|
Less Debt Discount, net |
|
(662,957 |
) |
|
(701,489 |
) |
|
|
|
|
|
|
|
|
|
Less Debt Issuance Costs, net |
|
(286,688 |
) |
|
(319,329 |
) |
|
|
|
|
|
$ |
47,337,648 |
|
$ |
48,690,776 |
|
|
||||||
(a) Fixed via interest rate swap
(b) One loan in the amount of $7.92 million secured by four properties and allocated to each property based on each property's appraised value.
(c) Adjustment effective April 1, 2027 equal to 5-year Treasury plus 2.5% and subject to a floor of 3.85%
(d) One loan in the amount of $18.05 million secured by twelve properties and allocated to each property at the date of acquisition based on each property's appraised value.
(e) Refinanced on May 1, 2026 extending the maturity date to May 1, 2031 with interest accruing at a fixed rate of 5.70%.
34
We amortized debt issuance costs during the three months ended March 31, 2026 and 2025 to interest expense of $10,655 and $42,533, respectively. The Company did not pay any debt issuance costs during the three months ended March 31, 2026 and 2025.
Each mortgage loan requires the Company to maintain certain debt service coverage ratios as noted above. In addition, two mortgage loans, one encumbered by six properties and requiring a 1.50 DSCR, and another stand alone mortgage loan requiring a 1.50 DSCR, require the Company to maintain a 54% loan to fair market stabilized value ratio. Fair market stabilized value shall be determined by the lender by reference to acceptable guides and indices or appraisals from time to time at its discretion. As of March 31, 2026, the Company was in compliance with all covenants.
Minimum required principal payments on our debt as of March 31, 2026 are as follows:
|
Mortgage Loans |
|
Loan Payable - Related Party |
|
Total |
|
|||
2026 (9 months remaining) |
$ |
4,633,259 |
|
$ |
6,721,429 |
|
$ |
11,354,688 |
|
2027 |
|
1,352,435 |
|
|
- |
|
|
1,352,435 |
|
2028 |
|
18,996,970 |
|
|
- |
|
|
18,996,970 |
|
2029 |
|
13,198,366 |
|
|
- |
|
|
13,198,366 |
|
2030 |
|
667,653 |
|
|
- |
|
|
667,653 |
|
Thereafter |
|
9,438,610 |
|
|
- |
|
|
9,438,610 |
|
|
$ |
48,287,293 |
|
$ |
6,721,429 |
|
$ |
55,008,722 |
|
On February 8, 2023, we entered into new Amended and Restated Limited Liability Company Agreements for the Norfolk, Virginia properties, GIPVA 2510 Walmer Ave, LLC ("GIPVA 2510") and GIPVA 130 Corporate Blvd, LLC ("GIPVA 130"), in which we, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new preferred member, Brown Family Enterprises, LLC, through the issuance of preferred membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130. GIPVA 2510 and GIPVA 130 (the “Virginia SPEs”) hold our Norfolk, Virginia properties. In addition, both of the Virginia SPEs and Brown Family Enterprises, LLC entered into Unit Purchase Agreements in which GIPVA 2510 issued and sold 180,000 Class A Preferred Units at a price of $10.00 per unit for an aggregate price of $1,800,000, and GIPVA 130 issued and sold 120,000 Class A Preferred Units at a price of $10.00 per unit for an aggregate price of $1,200,000. The Operating Partnership is the general manager of the subsidiary while Brown Family Enterprises, LLC is a preferred equity member. Pursuant to the agreement, we are required to pay the preferred equity member a 7% IRR paid on a monthly basis and will share in 16% of the equity in each of the Virginia SPEs upon a capital transaction resulting in distributable proceeds. After 24 months, Brown Family Enterprises, LLC has the right to redeem the preferred equity at redemption value. On July 25, 2024, we entered into First Amendments to the Second Amended and Restated Limited Liability Company Agreements, dated as of February 8, 2023, for each of these entities revising the redemption date from February 8, 2025 to February 8, 2027. Because of the redemption right, the non-controlling interest is presented as temporary equity at an aggregated redemption value of $3,000,000 as of March 31, 2026.
In connection with the acquisition of the Modiv Portfolio, the Operating Partnership and LC2 entered into an Amended and Restated Limited Liability Company Agreement for GIP SPE (the “GIP SPE Operating Agreement”) pursuant to which LC2 made a $12.0 million initial capital contribution to GIP SPE, together with a commitment to make an additional $2.1 million contribution upon the satisfactory completion of the acquisition of a tenant-in-common interest held by a third party in the Company’s Rockford, Illinois property (the “LC2 Investment”). The Company completed the acquisition of such tenant-in-common interest on September 7, 2023, for a purchase price of $1.3 million and LC2 made the additional $2.1 million capital contribution on September 11, 2023. LC2 made the LC2 Investment in exchange for a preferred equity interest in GIP SPE (the “Preferred Interest”). The Preferred Interest has a cumulative accruing distribution preference of 15.5% per year, compounded monthly, a portion of which in the amount of 5% per annum (compounded monthly) is deemed to be the “current preferred return,” and the remainder of which in the amount of 10.5% per annum (compounded monthly) is deemed to be the “accrued preferred return.” The GIP SPE operating agreement provides that operating distributions by GIP SPE will be made first to LC2 to satisfy any accrued but unpaid current preferred return, with the balance being paid to the Operating Partnership, unless the “annualized debt yield” of GIP SPE is less than 10%, in which case the balance will be paid to LC2. For this purpose, “annualized debt yield” is calculated as the sum of senior debt and LC2 Investment divided by the trailing three-month annualized adjusted net operating income (as defined in the GIP SPE Operating Agreement) of GIP SPE. The GIP SPE Operating Agreement also provides that distributions from capital transactions will be paid first to LC2 to satisfy any accrued but unpaid preferred return, then to LC2 until the “Make-Whole Amount” (defined as the amount equal to 1.3 times the LC2 Investment) is reduced to zero, and then to the Operating Partnership.
The Preferred Interest is required to be redeemed in full by the Company on or before August 10, 2025 (the "Mandatory Redemption Date") for a redemption amount equal to the greater of (i) the amount of the LC2 Investment plus the accrued
35
preferred return, and (ii) the Make-Whole Amount. Upon a failure to timely redeem the Preferred Interest, the preferred return will accrue at an increased rate of 18% per annum, compounded monthly. The Company has the right to extend the Mandatory Redemption Date for two consecutive 12-month extension periods, provided that (i) LC2 is paid an extension fee of 0.01% of the outstanding amount of the LC2 Investment for each such extension, (ii) the preferred return is increased from 15.5% to 18% of which the accrued preferred return is increased from 10.5% to 13%, (iii) the trailing 6-month annualized adjusted net operating income (as defined in the GIP SPE Operating Agreement) is in excess of $5.0 million, (iv) GIP SPE and its subsidiaries’ senior debt is extended through the end of the extension period, and there are no defaults under the GIP SPE Operating Agreement.
On August 7, 2025, the Company exercised its first 12-month extension option under the GIP SPE Operating Agreement, extending the Mandatory Redemption Date from August 10, 2025 to August 10, 2026. In connection with the extension, the Company paid LC2 an extension fee of $141,000 (equal to 100 basis points of the outstanding LC2 Investment), increased the “Preferred Equity Return” under the GIP SPE Operating Agreement from 15.5% to 18% per annum, and increased the “Accrued Preferred Return” under the agreement from 10.5% to 13% per annum, while the “Current Preferred Return” under the agreement remained at 5% per annum. The Company also confirmed that the trailing nine-month annualized adjusted net operating income exceeded $5.0 million, the senior loans had been extended through the end of the extension period, and there were no material breaches or defaults under the GIP SPE Operating Agreement.
Under the GIP SPE Operating Agreement, GIP SPE is also required to pay to Loci Capital, an affiliate of LC2, an equity fee of 1.5% of the LC2 Investment, with 1% having been paid upon the execution and delivery of the GIP SPE Operating Agreement and the 0.5% payable upon redemption of the LC2 Investment.
Each of the preferred members described above may redeem their interest on or after the Redemption date (second year anniversary of the closing of the acquisition), at the discretion of such preferred member, as applicable, all or a portion thereof, of such preferred member’s pro-rata share of the redemption value in the form of the units of the Operating Partnership ("GIP LP Units"). Such GIP LP Units shall be subject to all such restrictions, such as with respect to transferability, as reasonably imposed by the Operating Partnership. The number of GIP LP Units issued to any preferred member shall be determined by dividing the total amount of the redemption value that such preferred member shall receive in GIP LP Units by a 15% discount of the average 30-day market price of Generation Income Properties, Inc. common stock. GIP LP Units shall then be convertible into common stock of Generation Income Properties, Inc. on a 1:1 basis in accordance with the partnership agreement of the Operating Partnership. Additionally, the Operating Partnership has the right to redeem the preferred equity at redemption value with cash after the second year anniversary of the closing of the acquisition.
The primary objective of our financing strategy is to maintain financial flexibility using retained cash flows, long-term debt and common and perpetual preferred stock to finance our growth. We intend to have a lower-leveraged portfolio over the long-term after we have acquired an initial substantial portfolio of diversified investments. During the period when we are acquiring our current portfolio, we will employ greater leverage on individual assets (that will also result in greater leverage of the current portfolio) in order to quickly build a diversified portfolio of assets.
Cash from Operating Activities
Net cash provided by operating activities was $451,160 and $718,214 for the three months ended March 31, 2026 and 2025, respectively.
Cash from Investing Activities
Net cash used in investing activities during the three months ended March 31, 2026 and 2025 was $7,491 and $0, respectively.
Cash from Financing Activities
Net cash used in financing activities was ($6,318,517) and ($700,596) for the three months ended March 31, 2026 and 2025, respectively.
Off-Balance Sheet Arrangements
36
We do not have any material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Non-GAAP Financial Measures
Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We also disclose funds from operations ("FFO"), adjusted funds from operations ("AFFO"), core funds from operations ("Core FFO") and core adjusted funds of operations ("Core AFFO") all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.
FFO and related measures do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income or loss as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as GAAP net income or loss adjusted to exclude, net gains from sales of property and adding back real estate depreciation; namely, excluding from net income depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by an entity. We then adjust FFO for non-cash revenues and expenses such as amortization of deferred financing costs, above and below market lease intangible amortization, straight line rent adjustment where the Company is both the lessor and lessee, and non-cash stock compensation to calculate Core AFFO.
FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other companies. We believe that Core FFO and Core AFFO are useful measures for management and investors because they further remove the effect of non-cash expenses and certain other expenses that are not directly related to real estate operations. We use each as measures of our performance when we formulate corporate goals.
As FFO excludes depreciation and amortization, gains and losses from property dispositions that are available for distribution to stockholders and non-recurring or extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, providing a perspective not immediately apparent from net income or loss. However, FFO should not be viewed as an alternative measure of our operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties which could be significant economic costs and could materially impact our results from operations. Additionally, FFO does not reflect distributions paid to redeemable non-controlling interests.
37
The following tables reconcile net income (net loss), which we believe is the most comparable GAAP measure, to FFO, Core FFO, AFFO and Core AFFO:
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
|
|
|
|
||
Net loss |
$ |
(1,266,147 |
) |
$ |
(1,797,460 |
) |
Other expense |
|
237 |
|
|
286 |
|
Loss (gain) on derivative valuation |
|
(155,851 |
) |
|
293,499 |
|
Depreciation and amortization |
|
1,134,428 |
|
|
1,292,762 |
|
(Gain) loss on held for sale asset valuation |
|
- |
|
|
- |
|
Loss on transfer of LLC interests in satisfaction of debt |
|
185,069 |
|
|
- |
|
Funds From Operations |
|
(102,264 |
) |
|
(210,913 |
) |
Amortization of debt issuance costs |
|
10,655 |
|
|
42,533 |
|
Amortization of debt discount |
|
38,531 |
|
|
- |
|
Non-cash stock compensation |
|
165,000 |
|
|
- |
|
Adjustments to Funds From Operations |
|
214,186 |
|
|
42,533 |
|
Core Funds From Operations |
$ |
111,922 |
|
$ |
(168,380 |
) |
|
|
|
|
|
||
Net loss |
$ |
(1,266,147 |
) |
$ |
(1,797,460 |
) |
Other expense |
|
237 |
|
|
286 |
|
Loss (gain) on derivative valuation |
|
(155,851 |
) |
|
293,499 |
|
Depreciation and amortization |
|
1,134,428 |
|
|
1,292,762 |
|
Amortization of debt issuance costs |
|
10,655 |
|
|
42,533 |
|
Amortization of debt discount |
|
38,531 |
|
|
- |
|
Above and below-market lease amortization, net |
|
2,026 |
|
|
59,962 |
|
Straight line rent, net |
|
(17,748 |
) |
|
41,507 |
|
Adjustments to net loss |
|
1,012,278 |
|
|
1,730,549 |
|
Adjusted Funds From Operations |
$ |
(253,869 |
) |
$ |
(66,911 |
) |
|
|
|
|
|
||
Dead deal expense |
|
- |
|
|
27,894 |
|
(Gain) loss on held for sale asset valuation |
|
- |
|
|
- |
|
Loss on transfer of LLC interests in satisfaction of debt |
|
185,069 |
|
|
- |
|
Non-cash stock compensation |
|
165,000 |
|
|
- |
|
Adjustments to Adjusted Funds From Operations |
|
350,069 |
|
|
27,894 |
|
Core Adjusted Funds From Operations |
$ |
96,200 |
|
$ |
(39,017 |
) |
Critical Accounting Policies
Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. See our audited consolidated financial statements included herein for a summary of our significant accounting policies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to make disclosures under this item.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Our management, with the participation of our Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Management, with the participation of our CEO and Principal Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2026. Based on that evaluation, our management, including our
38
CEO and Principal Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2026.
(b) Changes in internal control over financial reporting.
There were changes in our internal control over financial reporting during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including the remediation of the previously identified material weakness.
Based on these actions and the results of testing, management concluded that the material weakness has been remediated as of March 31, 2026.
39
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently subject to any lawsuits, claims or other legal proceedings, except as described below.
On or around March 27, 2026, the Company’s operating partnership (Generation Income Properties, L.P.) and David Sobelman, the Company’s President and CEO, were sued in Alabama Circuit Court by Chase Commercial Realty, Inc. in a collection action under a promissory note issued by the operating partnership and under personal guaranty by Mr. Sobelman relating to an unpaid brokerage commission payable to the plaintiff. The plaintiff is seeking the amount of the promissory note ($332,000) plus interest, late fees, and attorneys’ fees. The Company acknowledges that the promissory note is due, and the Company has accrued a liability for the amount due. The complaint in the matter has been answered with affirmative defenses and the plaintiff has filed a motion for summary judgment, which is pending.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as amended.
We can provide no assurance that we will be able to regain compliance with the continued listing standards of Nasdaq with respect to our common stock and warrants. If we fail to regain compliance, our securities could be delisted.
Our common stock is currently listed on The Nasdaq Capital Market (“Nasdaq”). In order to maintain that listing, we must maintain compliance with Nasdaq’s continued listing requirements and standards. There can be no assurances that we will be able to comply with the applicable listing requirements and standards of Nasdaq.
Minimum Stockholders’ Equity Requirement
In August 2025, we received notice from the Listing Qualifications staff of Nasdaq (the “Staff”) notifying us that we no longer maintained at least $2.5 million in stockholders’ equity, as required under Nasdaq Listing Rule 5550(b)(1) (the “Equity Requirement”) and that we also did not meet any other alternative standard. On October 6, 2025, we submitted to the Staff a written plan to become compliant with the Equity Requirement and were given until February 5, 2026, to regain compliance. Because we were unable to regain compliance by such date, on February 5, 2026, the Staff provided written notification that the trading of our common stock and warrants would be suspended at the open of business on February 17, 2026 unless the Company appealed the Staff’s determination to the Nasdaq Hearings Panel. We thereafter timely appealed the Staff’s determination, and on March 24, 2026, a hearing was held before the Nasdaq Hearings Panel, during which time we requested an extension of time and submitted a plan to regain compliance with both the Equity Requirement and Minimum Bid Requirement (as described below) by August 2026, with such plan consisting of a combination of property sales, capital raises, and a reverse stock split. By decision dated April 17, 2026, the Nasdaq Hearings Panel granted us an extension through August 4, 2026, to evidence compliance and stated that this extension represents the full extent of the Panel’s discretion. There can be no assurance that we will regain compliance by August 4, 2026.
Minimum Bid Requirement
On January 28, 2025, we received notice from Nasdaq that, because the closing bid price for our common stock had fallen below $1.00 per share for 30 consecutive business days, we no longer complied with the minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). We were provided an initial compliance period of 180 calendar days, or until July 27, 2026, to regain compliance with the Minimum Bid Requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to July 27, 2026.
We intend to continue to actively monitor the closing bid price of our common stock and will evaluate available options to regain compliance with the Minimum Bid Requirement. Specifically, we have confirmed to Nasdaq at the hearing held on March 24, 2026 that, if necessary, we will implement a reverse stock split of our outstanding common stock prior to July 27, 2026 to attempt to regain compliance. There can be no assurance that we will regain compliance with the Minimum Bid Requirement during the 180-day compliance period or maintain compliance with the other Nasdaq listing requirements.
Potential Consequences of Delisting
There is no assurance that we will be able to meet Nasdaq’s listing requirements or comply with the requisite Nasdaq requirements to maintain our listing of common stock and warrants on Nasdaq. In the event that our common stock and warrants are delisted from Nasdaq, as a result of our failure to comply with the Equity Requirement or the Minimum Bid Requirement or as a result of our failure to continue to comply with any other requirement for continued listing on Nasdaq,
40
and we are not able to list our securities on Nasdaq or any other national securities exchange, we could face significant material adverse consequences, including:
• a decline of the market price of our common stock;
• a limited availability of market quotations for our common stock;
• reduced liquidity for our common stock;
• a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
• a limited amount of news and analyst coverage for us;
• a decreased ability to issue additional securities or obtain additional financing in the future; and
• the incurring of additional costs under state blue sky laws in connection with any sales of our securities.
If our common stock is delisted by Nasdaq, our common stock may be eligible to trade on an over-the-counter quotation system where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market value of our common stock. In the event our common stock is delisted from Nasdaq, we may not be able to list our common stock on another national securities exchange or obtain quotation on an over-the-counter quotation system.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In a Form 8-K filed on February 25, 2026, the Company disclosed that it had entered into a convertible note with Silverback Capital Corporation and that, as of February 18, 2026, Silverback Capital Corporation had converted $26,304 of the note into an aggregate of 60,000 shares of the Company common stock. As of March 31, 2026, 2026, Silverback Capital Corporation converted an additional aggregate of $123,651 of the note into an additional 436,930 shares of the Company’s common stock in the aggregate. The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), for the private placement of the shares issued to Silverback Capital Corporation pursuant to Section 3(a)(9) of the Securities Act as involving an exchange by the Company exclusively with its security holders. No commission or other remuneration was paid or given for soliciting the exchange transactions. Other exemptions may apply.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
41
Item 5. Other Information
(a) None.
(b) None.
(c) During the three months ended March 31, 2026, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934)
42
Item 6. Exhibits
The following documents are filed as a part of this report or are incorporated herein by reference.
EXHIBIT NUMBER |
DESCRIPTION |
|
|
3.1 |
Articles of Amendment and Restatement of Generation Income Properties, Inc. (incorporated by reference to Exhibit 2.1 of the Company’s Form 1-A/A filed on January 28, 2016) |
3.1.1 |
Articles of Amendment to Amended and Restated Articles of Incorporation. (incorporated by reference to Exhibit 2.1 to the Company’s Form 1-U filed on October 9, 2020.) |
3.2 |
Restated Bylaws of Generation Income Properties, Inc.(incorporated by reference to Exhibit 3.2 of the Company’s Form 10/A filed on April 30, 2025) |
10.1 |
Promissory Note, dated February 12, 2026, payable to QCCR Investments, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on February 19, 2026). |
10.2 |
Purchase and Sale Agreement, entered into effective October 23, 2025, by and between GIPCO 585 24 ½ Road, LLC and Realty Income Properties 26, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on February 23, 2026). |
10.3 |
Purchase and Sale Agreement, dated October 31, 2025, by and between GIPFL 2601 Westhall Lane, LLC and Thompson, Inc. (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on February 23, 2026). |
10.4 |
First Amendment to Purchase and Sale Agreement, dated December 11, 2025, by and between GIPFL 2601 Westhall Lane, LLC and Thompson, Inc. (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on February 23, 2026). |
10.5 |
Amended and Restated Convertible Note, dated February 10, 2026, issued to Silverback Capital Corporation (First Amended Note) (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on February 25, 2026). |
10.6 |
Amended and Restated Convertible Note, dated February 24, 2026, issued to Silverback Capital Corporation (Second Amended Note) (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on February 25, 2026). |
10.7 |
Second Amended and Restated Limited Liability Company Agreement of GIPIA 1220 S. Duff Avenue, LLC, dated as of April 13, 2026, by and among GIPIA 1220 S. Duff Avenue, LLC, Generation Income Properties, L.P., and JCWC Funding LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 20, 2026). |
10.8 |
Purchase and Sale Agreement, entered into effective March 23, 2026, by and between GIPGA 2383 Lake Harbin Road, LLC and Vanguard Asset Holdings, LLC, Series 102 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 23, 2026). |
10.9 |
First Amendment to Purchase and Sale Agreement, made and entered into effective April 2, 2026, by and between GIPGA 2383 Lake Harbin Road, LLC and Vanguard Asset Holdings, LLC, Series 102 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on April 23, 2026). |
|
|
31.1* |
Rule 13a – 14(a) Certification of the Principal Executive Officer |
31.2* |
Rule 13a – 14(a) Certification of the Principal Financial Officer |
32.1* |
Written Statement of the Principal Executive Officer, Pursuant to 18 U.S.C. § 1350 |
32.2* |
Written Statement of the Principal Financial Officer, Pursuant to 18 U.S.C. § 1350 |
|
|
101.INS |
Inline XBRL Instance Document. |
101.SCH |
Inline XBRL Taxonomy Extension Schema. |
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase. |
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase. |
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase. |
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase. |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
43
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:
|
|
GENERATION INCOME PROPERTIES, INC. |
|
|
|
|
|
Date: May 15, 2026 |
|
By: |
/s/ David Sobelman |
|
|
|
David Sobelman |
|
|
|
Chief Executive Officer and Chair of the Board |
|
|
|
(Principal Executive Officer) |
|
|
|
|
Date: May 15, 2026 |
|
By: |
/s/ Ron Cook |
|
|
|
Ron Cook |
|
|
|
VP Accounting and Finance |
|
|
|
(Principal Financial and Accounting Officer) |
44