GENERATION INCOME PROPERTIES, INC.

Previous wording

We are an internally managed, Maryland corporation focused on acquiring retail, office and industrial real estate located in major U.S. markets. We initiated operations during the year ended December 31, 2015 and have elected to be taxed as a REIT for federal income tax purposes commencing with our taxable year ending December 31, 2021. 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

Current wording

We are an internally managed, Maryland corporation focused on acquiring retail, office and industrial real estate located in major U.S. markets. We initiated operations during the year ended December 31, 2015 and have elected to be taxed as a REIT for federal income tax purposes commencing with our taxable year ending December 31, 2021. 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, 2025 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.

Previous wording

Creditworthy Tenants. Approximately 60% of our portfolio’s annualized base rent ("ABR") as of September 30, 2024 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better. Our largest tenants are the General Service Administration, Dollar General, EXP Services, and Kohl’s Corporation, PRA Holdings, and City of San Antonio contributed approximately 69% of our portfolio’s annualized base rent.

Current wording

Creditworthy Tenants. Approximately 65% of our portfolio’s annualized base rent ("ABR") as of March 31, 2025 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better. Our largest tenants are the General Service Administration, City of San Antonio (Prek-K), and Dollar General, and contributed approximately 36% of our portfolio’s annualized base rent.

Previous wording

% Leased. Our portfolio is 89% leased and occupied.

Current wording

% Leased. Our portfolio is 93% leased and occupied.

Previous wording

Average Effective Annual Rental per Square Foot. Average effective annual rental per square foot is $14.75.

Current wording

Average Effective Annual Rental per Square Foot. Average effective annual rental per square foot is 15.24.

Previous wording

From inception through September 30, 2024, we have distributed $5,031,549 to common stockholders. On July 3, 2024, 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.

Current wording

From inception through March 31, 2025, we have distributed $5,024,622 to common stockholders.

Previous wording

Operating results for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Current wording

Operating results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

Previous wording

During the three and nine months ended September 30, 2024, total revenue from operations were 2,400,282 and $7,092,690, respectively, as compared to $1,844,148 and 4,510,065 for the three and nine months ended September 30, 2023, respectively. Revenue increased by $556,134 and $2,582,625 during the three and nine months ended September 30, 2024, respectively, compared with the three and nine months ended September 30, 2023. The overall revenue increase was driven by the integration of the 13 property portfolio acquired from Modiv in August 2023.

Current wording

During the three months ended March 31, 2025, total revenue from operations was $2,381,595 as compared to $2,433,173 for the three months ended March 31, 2024.

Previous wording

During the three and nine months ended September 30, 2024, we incurred total operating expenses of $3,769,715 and $11,133,386 respectively, as compared to $3,060,715 and $7,082,645, respectively, for the three and nine months ended September 30, 2023. Operating expenses increased overall by $709,578 and $4,050,740, respectively, as follows:

Current wording

During the three months ended March 31, 2025, we incurred total operating expenses of $3,857,376 as compared to $3,633,825 for the three months ended March 31, 2024. Operating expenses increased by $223,551 as follows:

Previous wording

Compensation costs decreased by $49,798 and $163,598, respectively, primarily due to savings in salary expense and for accounting and administrative staff.

Current wording

Compensation costs decreased by $41,270, year-over-year, due to savings in salary expense and for accounting and administrative staff.

Previous wording

During the three and nine months ended September 30, 2024 and 2023, we generated a net loss of $2,103,549 and $1,213,265 and $5,444,133 and 3,156,015, respectively.

Current wording

During the three months ended March 31, 2025 and 2024, we generated a net loss of $1,797,460 and $1,879,096, respectively.

Previous wording

During the three and nine months ended September 30, 2024 and 2023, net income attributable to non-controlling interest was $866,047 and $425,637 and $2,612,405 and $681,916, respectively. The variance is attributable to additional redeemable non-controlling interests established during the second half of fiscal year 2023 to facilitate acquisitions, namely the acquisition of the 13 property Modiv portfolio in August 2023.

Current wording

During the three months ended March 31, 2025 and 2024, net income attributable to non-controlling interest was $934,399 and $946,124, respectively.

Previous wording

During the three and nine months ended September 30, 2024 and 2023, we generated a net loss attributable to our shareholders of $2,969,596 and $1,828,902 and $8,151,537 and 4,027,931, respectively.

Current wording

During the three months ended March 31, 2025 and 2024, we generated a net loss attributable to our shareholders of $2,731,859 and $2,920,220, respectively.

Previous wording

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 and borrowings under credit facilities. As of September 30, 2024, we had total cash (unrestricted and restricted) of $1,581,610, properties with a gross cost basis of $102,307,436 and outstanding mortgage loans with a principal balance of $59,707,772, excluding assets held for sale for $5.75 million.

Current wording

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 and borrowings under credit facilities. As of March 31, 2025, we had total cash (unrestricted and restricted) of $665,057, properties with a gross cost basis of $109,801,194 and outstanding mortgage loans with a principal balance of $66,184,027.

Previous wording

Our President and CEO has also personally guaranteed the repayment of the $10.6 million due under the 7-11 - Washington, DC; Starbucks - South Tampa, FL; and vacant - Huntsville, AL loan as well as the $1.3 million loan secured by the Company's Sherwin-Williams - Tampa, FL property. In addition, our President and CEO has also provided a guaranty of the Company’s nonrecourse carveout liabilities and obligations in favor of the lender for the GSA and PRA Holdings, Inc. - Norfolk, VA mortgage loans ("Bayport loans") with an aggregate principal amount of $11.6 million.

Current wording

Sherwin-Williams - Tampa, FL property. In addition, our President and CEO has also provided a guaranty of the Company’s nonrecourse carveout liabilities and obligations in favor of the lender for the GSA and PRA Holdings, Inc. - Norfolk, VA mortgage loans ("Bayport loans") with an aggregate principal amount of $11.5 million.

Previous wording

During the three and nine months ended September 30, 2024, we incurred a guaranty fee expense to our President and CEO of $102,023 and $304,245, respectively, recorded to interest expense. A guaranty fee expense of $81,022 and $196,304 was incurred during the three and six months ended September 30, 2023, respectively.

Current wording

During the three months ended March 31, 2025, we incurred a guaranty fee expense to our President and CEO of $97,692 recorded to interest expense. A guaranty fee expense of $97,898 incurred during the three months ended March 31, 2024.

Previous wording

On August 9, 2022, we entered a Redemption Agreement with a unit holder. As such, we recorded another payable - related party in the amount of $2,912,300 upon execution of the Redemption Agreement entered into July 20, 2022 and has since made installment payments of $2,007,380 to date with a remaining balance of $904,920 outstanding as of September 30, 2024.

Current wording

On August 9, 2022, we entered a Redemption Agreement with a unit holder. As such, we recorded an other payable - related party in the amount of $2,912,300 upon execution of the Redemption Agreement entered into July 20, 2022 and has paid the note in full as of March 31, 2025. Remaining balances of $0 and $1,357,380 outstanding as of March 31, 2025 and 2024, respectively.

Previous wording

On October 14, 2022, we 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 $1.5 million that is due on October 14, 2024, and bears a fixed interest rate of 9% with simple interest payable monthly. On July 21, 2023, the Company amended and restated the promissory note to reflect an increase in the loan to $5.5 million and extend the maturity date thereof from October 14, 2024 to October 14, 2026. Except for the increase in the amount of the Loan and Note and the extension of the maturity date thereof, no changes were made to the original note. The loan may be repaid without penalty at any time. The loan is secured by the Operating Partnership’s equity interest in its current direct subsidiaries that hold real estate assets pursuant to the terms of a security agreement between the Operating Partnership and Brown Family Enterprises, LLC.

Current wording

On October 14, 2022, we 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 $1.5 million that is due on October 14, 2024, and bears a fixed interest rate of 9%, simple interest. Interest is payable monthly. On July 21, 2023, the Company amended and restated the promissory note to reflect an increase in the loan to $5.5 million and extend the maturity date thereof from October 14, 2024 to October 14, 2026. Except for the increase in the amount of the Loan and Note and the extension of the maturity date thereof, no changes were made to the original note. The loan may be repaid without penalty at any time. The loan is secured by the Operating Partnership’s equity interest in its current direct subsidiaries that hold real estate assets pursuant to the terms of a security agreement between the Operating Partnership and Brown Family Enterprises, LLC.

Previous wording

For the nine months ended September 30, 2024, the Company generated positive operating cash flows of $783,511 and had cash on hand of $1.58 million as of September 30, 2024. As a result of our recurring losses, our projected cash needs, and our current liquidity, substantial doubt exists about the Company’s ability to continue as a going concern one year after the date that these financial statements are issued. In August 2024 the Company modified terms for two secured mortgage loans set to expire in September 2024 and October 2024. As of September 30, 2024, the principal balances of the modified secured loans were $7.2 million and $4.4 million at 6.15% annual interest with maturity dates extended to August 2029. The Company’s ability to continue as a going concern is contingent upon continued successful execution of management’s plan to improve the Company’s liquidity and profitability.

Current wording

As a result of our recurring losses, our projected cash needs, and our current liquidity, substantial doubt exists about the Company’s ability to continue as a going concern one year after the date that these financial statements are issued. The Company’s ability to continue as a going concern is contingent upon successful execution of management’s plan to improve the Company’s liquidity and profitability. Our current and anticipated liquidity is less than the principal balance of these obligations. As a result of our recurring losses, our projected cash needs, and our current liquidity, substantial doubt exists about the Company’s ability to provide sufficient liquidity to meet future funding commitments for at least the next 12 months.

Previous wording

We amortized debt issuance costs during the three and nine months ended September 30, 2024 and 2023 to interest expense of approximately $60,532 and $46,260 and $156,091 and $103,990, respectively. The Company paid debt issuance costs of $0 and $376,877 during the three and nine months ended September 30, 2024 and 2023.

Current wording

We amortized debt issuance costs during the three months ended March 31, 2025 and 2024 to interest expense of approximately $42,533 and $47,780, respectively. The Company did not pay any debt issuance costs during the three months ended March 31, 2025 and 2024.

Previous wording

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 September 30, 2024, we were in compliance with all covenants.

Current wording

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, 2025, the Company was in compliance with all covenants, with the exception of one project level debt service coverage ratio ("DSCR") covenant for PNC for 15091 SW Alabama 20, LLC. In January 2024, Pratt and Whitney Automation vacated the property at the end of their lease and the property remained vacant for six months, thereafter. In August 2024, the Company entered into a lease with Auburn University for approximately 50 percent of the property's leasable space. During the six months of physical and economic vacancy, the property's mortgage DSCR was below the required 1.25 threshold resulting in a covenant deviation. According to the governing loan documents, failing to meet DSCR coverage requirements is a technical default triggering the risk of forfeiture of the property, accelerating the repayment of the remaining outstanding balance of the loan at the lender's discretion. In January 2025, the Company executed a PSA to sell the property for $7.2 million with the transaction expected to close in June 2025.

Previous wording

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 September 30, 2024.

Current wording

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. 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, 2025.

Previous wording

Due to the redemption right, the Preferred Interest is presented as temporary equity at redemption value of $14,100,000 plus accrued but unpaid preferred interest of $2,280,471 as of September 30, 2024.

Current wording

Due to the redemption right, the Preferred Interest is presented as temporary equity at redemption value of $14,100,000 plus accrued but unpaid preferred interest of $3,403,728 as of March 31, 2025.

Previous wording

Net cash provided by operating activities was $783,511 and net cash provided by operating activities was $18,537 for the nine months ended September 30, 2024 and 2023, respectively. The change is due to the doubling of the number of the Company's income generating assets through the 13 property Modiv acquisition.

Current wording

Net cash provided by operating activities was $718,214 and net cash provided by operating activities was $25,977 for the three months ended March 31, 2025 and 2024, respectively. The change is due to the doubling of the number of the Company's income generating assets through the 13 property Modiv acquisition.

Previous wording

Net cash used in investing activities during the three and nine months ended September 30, 2024 was $5,960,893. Net cash used in investing activities was $33,314,973 during the nine months ended September 30, 2023 related to an escrow deposit for a property purchase.

Current wording

Net cash used in investing activities during the three months ended March 31, 2025 and 2024 was $0 and $0 , respectively.

Previous wording

Net cash provided by financing activities was $3,607,045 and $33,916,112 for the nine months ended September 30, 2024 and 2023, respectively. The change is due to several factors comprising the increase of mortgage principal repayments driven by the Modiv acquisition in August 2023, the increase in distributions to non-controlling interests, and dividend payments on both preferred and common stock.

Current wording

Net cash used in financing activities was $700,596 and $1,487,603 for the three months ended March 31, 2025 and 2024, respectively. The change is due to several factors comprising the pause of dividends payable to common and preferred stock holders and the timing of related party payables.

Previous wording

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.

Current wording

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 non-recurring or extraordinary items (as defined by GAAP), net gains from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets, and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries. 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.