Generation me Properties(US:GIPR)2023-11-13 16:00Financial Performance - Total revenue from operations for the three months ended September 30, 2023, was $1,844,148, an increase of 25% compared to $1,474,085 for the same period in 2022 [160]. - Total operating expenses for the three months ended September 30, 2023, were $3,060,136, up 56% from $1,957,293 in the prior year [161]. - Net loss for the three months ended September 30, 2023, was $1,213,265, compared to a net loss of $512,117 for the same period in 2022 [164]. - Total revenue from operations for the nine months ended September 30, 2023, was $4,510,065, a 12% increase from $4,035,123 in the same period of 2022 [168]. - Total operating expenses for the nine months ended September 30, 2023, were $7,082,645, an increase of 25.6% from $5,636,231 in the prior year [169]. - Net loss for the nine months ended September 30, 2023, was $3,156,015, compared to a net loss of $1,874,327 for the same period in 2022 [173]. - Funds From Operations (FFO) for the nine months ended September 30, 2023, was $(552,406), compared to $(323,248) for the same period in 2022, reflecting ongoing operational challenges [210]. Portfolio and Leasing - As of September 30, 2023, approximately 68% of the portfolio's annualized base rent (ABR) was derived from tenants with an investment grade credit rating of "BBB-" or better [145]. - The portfolio is 96% leased, indicating strong occupancy rates [148]. - Approximately 84% of the leases in the current portfolio provide for increases in contractual base rent during future years [148]. - The average effective annual rental per square foot is $16.02 [148]. - The largest tenants contributing to the portfolio's ABR include the General Service Administration, Dollar General, City of San Antonio (Pre-K), and Kohl's Corporation, accounting for approximately 49% of the total ABR [146]. Cash and Financing Activities - As of September 30, 2023, the company had total cash of $4,372,672 and outstanding mortgage loans with a principal balance of $58,452,166 [177]. - The company announced a monthly cash distribution of $0.0396 per share for shareholders of record as of October 15, 2023, November 15, 2023, and December 15, 2023 [156]. - The company entered into a loan agreement with Valley National Bank for $21.0 million, secured by 21 properties, with a fixed interest rate of 7.47% [30]. - The company completed the acquisition of a tenant-in-common interest for $1.3 million and made an additional capital contribution of $2.1 million on September 11, 2023 [155]. - The company incurred a guarantee fee expense to the CEO of $196,304 for the nine months ended September 30, 2023, compared to $57,641 for the same period in 2022 [184]. - Net cash provided by operating activities was $18,537 for the nine months ended September 30, 2023, compared to $275,717 for the same period in 2022, indicating a significant decrease [199]. - Net cash used in investing activities increased to $33,314,973 for the nine months ended September 30, 2023, from $13,279,054 in 2022, primarily due to property acquisitions [200]. - Net cash provided by financing activities was $33,916,112 for the nine months ended September 30, 2023, a substantial increase from $5,001,430 in the same period of 2022, driven by debt and equity financing for property acquisitions [202]. Debt and Liabilities - The company has outstanding mortgage loans totaling approximately $60.55 million as of September 30, 2023 [191]. - As of September 30, 2023, total current liabilities amounted to $1,531,077, an increase from $714,354 as of December 31, 2022 [190]. - The company has a minimum debt-service coverage ratio requirement of 1.50:1, which will be tested as of December 31, 2024, and annually thereafter [182]. - The company is in compliance with all covenants related to its promissory notes and mortgage loans as of September 30, 2023 [193]. - Debt issuance costs amortized during the nine months ended September 30, 2023, amounted to $103,990, compared to $89,364 for the same period in 2022 [192]. Acquisitions and Investments - On August 10, 2023, the company purchased a portfolio of 13 properties for a total purchase price of $42.0 million, funded by $30.0 million in cash and 2,400,000 shares of Series A Redeemable Preferred Stock [151]. - The cash portion of the purchase was funded through a combination of cash on hand, $21.0 million in new secured mortgage debt, and a $12.0 million preferred equity investment [152]. - The Series A Preferred Stock issued has a cumulative cash dividend rate of 9.5% per annum, increasing to 12.0% starting September 15, 2024 [152]. - The company has no material off-balance sheet arrangements that could significantly affect its financial condition [203]. Taxation and Compliance - The company has elected to be taxed as a REIT for federal income tax purposes starting with the taxable year ending December 31, 2021 [143]. - The non-controlling interest related to the preferred equity member is presented as temporary equity at an aggregated redemption value of $3,000,000 as of September 30, 2023 [195]. - The company aims to maintain financial flexibility through retained cash flows, long-term debt, and preferred stock to finance growth [198].