Gladstone Land Corporation (NASDAQ:LAND) Q2 2022 Earnings Conference Call August 10, 2022 8:30 AM ET Company Participants David Gladstone - Chief Executive Officer & President Michael LiCalsi - General Counsel & Secretary Lewis Parrish - Chief Financial Officer Conference Call Participants Rob Stevenson - Janney Edward Riley - EF Hutton John Massocca - Ladenburg Thalmann Operator Greetings, and welcome to the Gladstone Land Second Quarter Earnings and Webcast Conference Call. At this time, all participants ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) For the six months ended June 30, 2022, total assets increased to $1.41 billion, operating revenues grew 22.2% to $40.2 million, and net income reached $1.8 million, significantly improving from the prior year [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2022, total assets increased to $1.41 billion, primarily due to a $32.8 million rise in real estate assets, while total equity grew by $62.9 million to $651.9 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total real estate, net** | $1,300,940 | $1,283,798 | | **Cash and cash equivalents** | $48,444 | $16,708 | | **Total Assets** | **$1,410,321** | **$1,351,550** | | **Notes and bonds payable, net** | $661,846 | $667,882 | | **Total Liabilities** | **$758,389** | **$762,484** | | **Total Equity** | **$651,932** | **$589,066** | | **Total Liabilities and Equity** | **$1,410,321** | **$1,351,550** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For Q2 2022, lease revenue grew 20.1% to $20.3 million, resulting in net income of $0.6 million, while for the six-month period, lease revenue increased 22.2% to $40.2 million, with net income reaching $1.8 million Statement of Operations Highlights (in thousands) | Metric | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Lease revenue, net** | $20,293 | $16,893 | $40,236 | $32,927 | | **Total operating expenses** | $12,160 | $9,495 | $25,525 | $19,402 | | **Net Income (Loss) Attributable to the Company** | $616 | $(530) | $1,794 | $23 | | **Net Loss Attributable to Common Stockholders** | $(3,873) | $(3,469) | $(6,610) | $(5,679) | | **Loss Per Common Share (Basic and diluted)** | $(0.11) | $(0.12) | $(0.19) | $(0.20) | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity increased from $589.1 million to $651.9 million, primarily driven by net proceeds from Series C Preferred Stock and common stock issuances, alongside comprehensive income - Key drivers for the increase in total equity during the first six months of 2022 include net proceeds from the issuance of **Series C Preferred Stock ($69.0 million)** and **common stock ($10.3 million)**[25](index=25&type=chunk) - Net income for the six months ended June 30, 2022 was **$1.8 million**, while dividends on preferred stock and distributions on common stock totaled **$8.4 million** and **$9.4 million**, respectively[25](index=25&type=chunk) - Accumulated other comprehensive income improved significantly from a loss of **$(1.0) million** to a gain of **$6.3 million**, primarily due to a **$7.3 million** change in fair value of interest rate hedging instruments[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash from operating activities was $19.4 million, investing activities used $35.1 million, and financing activities provided $47.5 million, resulting in a net cash increase of $31.7 million Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $19,355 | $16,965 | | **Net cash used in investing activities** | $(35,147) | $(84,950) | | **Net cash provided by financing activities** | $47,528 | $125,556 | | **Net increase in cash and cash equivalents** | $31,736 | $57,571 | | **Cash and cash equivalents at end of period** | $48,444 | $66,789 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's portfolio of 165 farms, $662 million in borrowings including a new MetLife facility, and significant capital raises from Series C Preferred Stock and ATM program, with subsequent acquisitions and loan repayments [NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS](index=13&type=section&id=NOTE%203.%20REAL%20ESTATE%20AND%20INTANGIBLE%20ASSETS) As of June 30, 2022, the company owned 165 farms totaling 113,931 acres with a net cost basis of $1.34 billion, primarily concentrated in California and Florida, and acquired two properties for $24.6 million in H1 2022 - As of June 30, 2022, the company owned **165 farms** with a total net cost basis of approximately **$1.34 billion**[45](index=45&type=chunk) - Farms in California and Florida accounted for **66.5%** and **17.9%** of total lease revenue, respectively, for the six months ended June 30, 2022[63](index=63&type=chunk) - During the first six months of 2022, the company acquired two properties in Florida and California for a total purchase price of **$24.6 million**[53](index=53&type=chunk) [NOTE 4. BORROWINGS](index=17&type=section&id=NOTE%204.%20BORROWINGS) As of June 30, 2022, total borrowings were $661.9 million with a 3.73% weighted-average interest rate, including a new $100 million MetLife term note and $2.8 million in interest patronage from Farm Credit borrowings Borrowings Summary (in thousands) | Borrowing Type | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Fixed-rate notes payable | $583,114 | $582,665 | | Fixed-rate bonds payable | $81,342 | $86,052 | | **Total notes and bonds payable, net** | **$661,846** | **$667,882** | - In February 2022, the company amended its credit facility with MetLife, adding a new **$100.0 million** long-term note payable, bringing the total facility size to **$250.0 million**[67](index=67&type=chunk) - During Q1 2022, the company recorded interest patronage of approximately **$2.8 million** from its Farm Credit borrowings, which related to interest accrued in 2021[73](index=73&type=chunk) [NOTE 6. RELATED-PARTY TRANSACTIONS](index=21&type=section&id=NOTE%206.%20RELATED-PARTY%20TRANSACTIONS) For the six months ended June 30, 2022, fees to the Adviser totaled $5.2 million, administration fees were $0.9 million, and Gladstone Securities received $6.2 million in commissions and fees Related-Party Fees for Six Months Ended June 30 (in thousands) | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | **Total fees to our Adviser, net** | $5,210 | $3,908 | | **Administration fee** | $926 | $703 | | **Total fees to Gladstone Securities** | $6,163 | $2,004 | - The advisory agreement was amended effective July 1, 2021, increasing the base management fee from an annual rate of **0.50%** to **0.60%** of the prior quarter's Gross Tangible Real Estate[86](index=86&type=chunk)[87](index=87&type=chunk) [NOTE 8. EQUITY](index=24&type=section&id=NOTE%208.%20EQUITY) The company raised $68.9 million in net proceeds from Series C Preferred Stock and $10.3 million from common stock via its ATM program, while also redeeming $7.7 million in OP Units and declaring regular distributions Equity Issuances for Six Months Ended June 30, 2022 (in thousands) | Issuance | Shares Sold | Net Proceeds | | :--- | :--- | :--- | | **Series C Preferred Stock** | 3,028,475 | $68,898 | | **Common Stock (ATM Program)** | 310,055 | $10,327 | - During the six months ended June 30, 2022, the company redeemed all **204,778** outstanding OP Units with a cash payment of approximately **$7.7 million**[108](index=108&type=chunk) [NOTE 11. SUBSEQUENT EVENTS](index=27&type=section&id=NOTE%2011.%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2022, the company acquired four new farms for $37.4 million, repaid $16.9 million in loans, and continued equity raising with $35.9 million in Series C Preferred Stock net proceeds - Acquired four new farms for a total purchase price of **$37.4 million**[114](index=114&type=chunk)[115](index=115&type=chunk) - Repaid approximately **$16.9 million** of maturing loans that had a weighted-average effective interest rate of **2.89%**[116](index=116&type=chunk) - Sold approximately **1.6 million** shares of Series C Preferred Stock for net proceeds of **$35.9 million**[118](index=118&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports owning 169 farms, with H1 2022 operating revenue up 22.2% to $40.2 million and operating income up 8.8% to $14.7 million, maintaining strong liquidity of $133.3 million and a NAV per common share of $15.60 [Overview](index=29&type=section&id=Overview) The company is an externally-managed agricultural REIT owning 169 diversified farms across 15 states, primarily with triple-net leases, and anticipates renewing the single agricultural lease expiring in the next six months - As of the filing date, the company owns **169 farms** comprised of **115,288 acres** in **15 states**, leased to **90 different tenants**[125](index=125&type=chunk)[126](index=126&type=chunk) - Geographic diversification is led by California (**66.5%** of lease revenue) and Florida (**17.9%** of lease revenue) for the six months ended June 30, 2022[128](index=128&type=chunk) - Only one agricultural lease is scheduled to expire within the next six months, and the company anticipates renewing it at a rate flat to the existing lease[132](index=132&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2022, total operating revenues increased 22.2% to $40.2 million, driven by acquisitions, while total operating expenses rose 31.6% to $25.5 million, resulting in an 8.8% increase in operating income to $14.7 million Operating Results for the Six Months Ended June 30 (in thousands) | Metric | 2022 | 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $40,236 | $32,927 | $7,309 | 22.2% | | **Total operating expenses** | $25,525 | $19,402 | $6,123 | 31.6% | | **Operating income** | $14,711 | $13,525 | $1,186 | 8.8% | - The increase in lease revenue was primarily driven by properties acquired after December 31, 2020, which contributed an additional **$7.4 million** in revenue for H1 2022 compared to H1 2021[157](index=157&type=chunk)[159](index=159&type=chunk) - Related-party fees to the Adviser increased due to additional assets acquired and an increase in the base management fee rate from **0.50%** to **0.60%** effective July 1, 2021[169](index=169&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains $133.3 million in available liquidity, with over 99% of borrowings at fixed rates, and primarily sources capital from operations, debt facilities, and equity issuances through its ATM program and Series C Preferred Stock offering - Current available liquidity is approximately **$133.3 million**, consisting of **$21.0 million** in cash and **$112.3 million** of availability under the MetLife credit facility[175](index=175&type=chunk) - Over **99%** of the company's borrowings are at fixed rates, with a weighted-average effective interest rate of **3.26%** for a term of over five years, providing protection against interest rate increases[175](index=175&type=chunk) - Since January 1, 2022, the company has raised approximately **$104.8 million** in net proceeds from its Series C Preferred Stock offering and **$10.3 million** from its common stock ATM program[189](index=189&type=chunk)[190](index=190&type=chunk) [Non-GAAP Financial Information](index=43&type=section&id=Non-GAAP%20Financial%20Information) The company uses FFO, CFFO, and AFFO to measure performance, with Diluted AFFO per share at $0.13 for Q2 2022 and $0.31 for the six-month period, and an estimated NAV per common share of $15.60 as of June 30, 2022 Non-GAAP Metrics Per Share | Metric per Share | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Diluted FFO** | $0.14 | $0.13 | $0.33 | $0.30 | | **Diluted CFFO** | $0.14 | $0.13 | $0.33 | $0.31 | | **Diluted AFFO** | $0.13 | $0.13 | $0.31 | $0.30 | Estimated NAV per Common Share Roll-Forward | Description | Per Share Amount | | :--- | :--- | | **NAV as of March 31, 2022** | **$15.54** | | Net loss attributable to common stockholders | $(0.11) | | Net change in unrealized fair value of portfolio | $0.53 | | Distributions on common stock | $(0.14) | | Net dilutive effect of equity issuances | $(0.22) | | **NAV as of June 30, 2022** | **$15.60** | [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - This item is not applicable to smaller reporting companies[212](index=212&type=chunk) [Controls and Procedures](index=50&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2022[213](index=213&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[214](index=214&type=chunk) [PART II - OTHER INFORMATION](index=51&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=51&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - The company is not currently subject to any material legal proceedings, nor are any known to be threatened[216](index=216&type=chunk) [Risk Factors](index=51&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - There have been no material changes to risks associated with the business from those previously set forth in the Annual Report on Form 10-K for the year ended December 31, 2021[217](index=217&type=chunk) [Other Items (Items 2-6)](index=51&type=section&id=Other%20Items) Items 2-5 are reported as 'None' or 'Not applicable', while Item 6 provides a list of exhibits filed with the report - Items 2, 3, 4, and 5 are reported as 'None' or 'Not applicable'[218](index=218&type=chunk) - Item 6 lists the exhibits filed with the Form 10-Q, including certifications and XBRL data[220](index=220&type=chunk)

Gladstone Land Corporation (NASDAQ:LAND) Q1 2022 Earnings Conference Call May 11, 2022 8:30 AM ET Company Participants David Gladstone - Chief Executive Officer & President Michael LiCals - General Counsel & Secretary & President, Gladstone Administration Lewis Parrish - Chief Financial Officer Conference Call Participants John Massocca - Ladenburg Thalmann Edward Riley - EF Hutton Craig Kucera - B. Riley Securities Barry Oxford - Colliers Operator Greetings and welcome to Gladstone Land Corporation First Q ...

Gladstone Land Corporation (NASDAQ:LAND) Q4 2021 Earnings Conference Call February 23, 2022 8:30 AM ET Company Participants David Gladstone - Chief Executive Officer & President Michael LiCals - General Counsel & Secretary & President, Gladstone Administration Lewis Parrish - Chief Financial Officer Conference Call Participants Edward Riley - EF Hutton Craig Kucera - B. Riley Securities James Villard - Ladenburg Thalmann Operator Greetings and welcome to Gladstone Land Fourth Quarter and Year End Earnings ...

Gladstone Land Corporation (NASDAQ:LAND) Q3 2021 Earnings Conference Call November 10, 2021 8:30 AM ET Company Participants David Gladstone - Chief Executive Officer and President Erich Hellmold - Deputy General Counsel Lewis Parrish - Chief Financial Officer Conference Call Participants Rob Stevenson - Janney Montgomery Scott Eddie Reilly - EF Hutton Eric Borden - Berenberg Capital James Villard - Ladenburg Thalmann Operator Greetings and welcome to Gladstone Land Third Quarter Earnings Call. At this time ...

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29%3A) This section presents Gladstone Land Corporation's unaudited condensed consolidated financial statements for periods ending September 30, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20September%2030%2C%202021%2C%20and%20December%2031%2C%202020) Total assets increased to $1.26 billion by September 30, 2021, driven by real estate growth, with liabilities and equity also rising Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total real estate, net** | $1,156,928 | $1,046,203 | | **Cash and cash equivalents** | $66,491 | $9,218 | | **TOTAL ASSETS** | **$1,261,836** | **$1,067,289** | | **Notes and bonds payable, net** | $645,967 | $623,961 | | **Total liabilities** | $736,389 | $683,499 | | **Total equity** | $525,447 | $383,790 | | **TOTAL LIABILITIES AND EQUITY** | **$1,261,836** | **$1,067,289** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202021%20and%202020) Q3 2021 operating revenues increased to $19.6 million, with net income slightly down and net loss attributable to common stockholders widening Statement of Operations Highlights (in thousands, except per-share data) | Metric | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $19,591 | $13,989 | $52,518 | $41,907 | | **Total operating expenses** | $11,207 | $6,858 | $30,609 | $21,395 | | **Net income** | $1,503 | $1,581 | $1,526 | $4,864 | | **Net loss attributable to common stockholders** | $(1,639) | $(837) | $(7,319) | $(1,981) | | **Loss per common share (Basic and diluted)** | $(0.05) | $(0.04) | $(0.25) | $(0.09) | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202021%20and%202020) Total equity increased to $525.4 million by September 30, 2021, driven by common and preferred stock issuances, partially offset by distributions - Total stockholders' equity increased from **$479.3 million** at June 30, 2021, to **$523.3 million** at September 30, 2021[26](index=26&type=chunk) - For the nine months ended September 30, 2021, net proceeds from the issuance of Series C Preferred Stock were **$34.6 million**, and net proceeds from common stock issuance were **$122.1 million**[29](index=29&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20nine%20months%20ended%20September%2030%2C%202021%20and%202020) Operating cash flow increased, investing activities used more cash, and financing activities surged, leading to a net increase in cash Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $20,356 | $11,593 | | **Net cash used in investing activities** | $(149,501) | $(75,620) | | **Net cash provided by financing activities** | $186,418 | $56,794 | | **Net increase (decrease) in cash** | $57,273 | $(7,233) | | **Cash at end of period** | $66,491 | $6,455 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details the company's accounting policies and financial results, including real estate, debt, equity, and related-party transactions [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operations, liquidity, and capital resources, covering portfolio growth, leasing, and non-GAAP measures [Overview](index=32&type=section&id=Overview) The company, an agricultural REIT, owns 160 diversified farms across 14 states, totaling 108,301 acres, leased to 82 tenants - As of the report date, the company owns **160 farms** comprised of **108,301 acres** in **14 states**, leased to **82 different, unrelated third-party tenants**[135](index=135&type=chunk)[136](index=136&type=chunk) Geographic Diversity by Lease Revenue (Nine Months Ended Sep 30, 2021) | State | % of Total Lease Revenue | | :--- | :--- | | California | 64.1% | | Florida | 19.4% | | Colorado | 3.8% | | Washington | 3.4% | | Arizona | 2.8% | | Other | 6.5% | - Most leases are **triple-net** with terms of **3-10 years** for row crops and **7-15 years** for permanent crops; **40 farms** include a variable rent component (participation rents)[139](index=139&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q3 2021 operating revenue increased 40.0% to $19.6 million due to acquisitions, while operating expenses grew 63.4% to $11.2 million Comparison of Operating Results (in thousands) | Metric | Q3 2021 | Q3 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $19,591 | $13,989 | $5,602 | 40.0% | | **Total operating expenses** | $11,207 | $6,858 | $4,349 | 63.4% | | **Operating income** | $8,384 | $7,131 | $1,253 | 17.6% | Lease Revenue Breakdown (in thousands) | Revenue Source | YTD 2021 | YTD 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Same-property basis** | $38,500 | $40,658 | $(2,158) | (5.3)% | | **Properties acquired** | $13,952 | $808 | $13,144 | 1,626.7% | | **Total Lease revenues** | $52,518 | $41,907 | $10,611 | 25.3% | - The base management fee paid to the Adviser **increased** due to asset growth and a fee rate increase from **0.50% to 0.60%** of Gross Tangible Real Estate, effective July 1, 2021[182](index=182&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Available liquidity is approximately $135.7 million, with capital used for distributions, operations, debt service, and acquisitions, funded by equity and debt - Current available liquidity is approximately **$135.7 million**, consisting of **$85.7 million** in cash and about **$50.0 million** of availability under the MetLife facility[191](index=191&type=chunk) - The company has **several properties under signed purchase agreements or non-binding letters of intent** and expects to consummate them in the coming months[192](index=192&type=chunk) Net Cash Flow Changes (in thousands) | Activity | YTD 2021 | YTD 2020 | $ Change | | :--- | :--- | :--- | :--- | | Operating activities | $20,356 | $11,593 | $8,763 | | Investing activities | $(149,501) | $(75,620) | $(73,881) | | Financing activities | $186,418 | $56,794 | $129,624 | [Non-GAAP Financial Information](index=48&type=section&id=NON-GAAP%20FINANCIAL%20INFORMATION) This section details non-GAAP metrics like FFO, CFFO, and AFFO, with Q3 2021 Diluted AFFO per share at $0.17, used to assess operational performance Non-GAAP Financial Metrics Per Share | Metric (Diluted, per share) | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | **FFO** | $0.17 | $0.15 | $0.47 | $0.50 | | **CFFO** | $0.17 | $0.15 | $0.48 | $0.51 | | **AFFO** | $0.17 | $0.14 | $0.47 | $0.50 | - Management uses **FFO, CFFO, and AFFO** to assess overall performance, make decisions on acquisitions and equity raises, and determine common stock distributions[205](index=205&type=chunk) [Net Asset Value](index=51&type=section&id=Net%20Asset%20Value) The estimated Net Asset Value (NAV) per common share increased to $13.80 as of September 30, 2021, driven by equity issuances and farmland appreciation Estimated NAV per Common Share Calculation (as of Sep 30, 2021) | Item | Amount (in thousands) | | :--- | :--- | | Total equity per balance sheet | $525,447 | | Net fair value adjustment for real estate | $136,049 | | Net fair value adjustment for long-term debt | $2,230 | | **Estimated NAV** | **$663,726** | | Less: Fair value of preferred stock | $(218,681) | | **NAV available to common stockholders** | **$445,045** | | Total common shares and OP Units outstanding | 32,248,767 | | **Estimated NAV per common share** | **$13.80** | NAV per Share Roll-Forward (Q3 2021) | Description | Per Share Amount | | :--- | :--- | | **NAV at June 30, 2021** | **$13.16** | | Net loss attributable to common stockholders | $(0.05) | | Net change in valuations | $0.33 | | Distributions on common stock | $(0.14) | | Net accretive effect of equity issuances | $0.50 | | **NAV at September 30, 2021** | **$13.80** | [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - This section is **not applicable** to smaller reporting companies[223](index=223&type=chunk) [Controls and Procedures](index=55&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control - Management concluded that disclosure controls and procedures were **effective** as of September 30, 2021[224](index=224&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that **materially affected**, or are reasonably likely to materially affect, internal controls[225](index=225&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, nor is it aware of any threatened material legal proceedings - The company is **not currently subject to any material legal proceedings**[227](index=227&type=chunk) [Risk Factors](index=56&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020 - There have been **no material changes** to the risk factors from those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[228](index=228&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no issuer purchases of equity securities during the period - There were **no unregistered sales** of equity securities or **no issuer purchases** of equity securities[229](index=229&type=chunk) [Defaults Upon Senior Securities](index=56&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable [Mine Safety Disclosures](index=56&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable [Other Information](index=56&type=section&id=ITEM%205.%20Other%20Information) The company reported no other information for this item [Exhibits](index=57&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the report, including articles of incorporation, material agreements, and CEO/CFO certifications - Key exhibits filed include the **Fifth Amended and Restated Investment Advisory Agreement (Exhibit 10.1)**, **CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2)**, and the **Estimated Value Methodology for Series C Preferred Stock (Exhibit 99.1)**[231](index=231&type=chunk)

Financial Data and Key Metrics Changes - Total assets increased by approximately $67 million due to new acquisitions, with no new borrowings incurred during the quarter [20] - Net loss for the second quarter was about $531,000, with a net loss to common shareholders of $3.5 million or $11.07 per common share [21] - Adjusted FFO for the second quarter was approximately $3.7 million compared to about $4.7 million in the first quarter, with AFFO per share decreasing from $17.04 to $12.06 [21] Business Line Data and Key Metrics Changes - Fixed base cash rents increased by about $830,000 or 5% quarter-over-quarter, primarily driven by additional revenues from recent acquisitions [22] - The overall initial net cash yield on new investments was about 5.1%, with lease renewals expected to result in an operating income increase of about $168,000, approximately 10% over prior leases [10][11] Market Data and Key Metrics Changes - The company currently owns 105,000 acres of farmland valued at about $1.3 billion, with farms located in 14 different states and leased to 79 different tenants [8] - The demand for products grown on the farms remains high, particularly for berries, vegetables, and nuts, which contribute to a stable revenue stream [9][30] Company Strategy and Development Direction - The company plans to continue acquiring farmland and has a pipeline of properties under signed PSAs totaling over $100 million, aiming for $250 million to $300 million in acquisitions for the year [51] - The focus on organic and non-GMO crops aligns with market trends towards healthier food options, with 40% of fresh produce acreage being organic or transitioning to organic [30][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of income from farms, with only three leases scheduled to expire over the next six months, representing about 2% of total annualized lease revenue [12] - The company is actively monitoring the impact of drought conditions in the Western U.S. but reported that all farms currently have sufficient water resources [12][14] Other Important Information - The company raised its common dividend to $4.51 per share per month, marking a 50.3% increase in monthly distributions over the past 26 quarters [27] - The company is working on developing formal ESG policies and expects to meet new board diversity standards set by NASDAQ [17] Q&A Session Summary Question: How significant are any of the participating rents likely to be this year? - Management indicated that indications will be clearer in the third quarter, with more definitive numbers expected in the fourth quarter and first quarter of the following year [38] Question: Where have the biggest increases in NAV occurred over the past year? - California has seen the most significant increases, followed by Oregon and Florida, while Washington and Arizona are experiencing slower appreciation [42][44] Question: Can you provide additional color on the current acquisition pipeline? - The company has completed about $85 million in acquisitions so far and is on pace to surpass the previous year's target, with several properties under signed PSAs [51] Question: What are the potential tax implications with the loss of the 1031 exchange? - Management is promoting the up-REIT structure to farmers, but adoption has been slow due to conservative attitudes within the farming community [56][58] Question: Can you elaborate on the water rights purchased? - The company acquired actual water rather than rights, with valuation tied to market indices, and any decrease in value would be treated similarly to real estate impairments [62][63]