10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to

Commission file number: 001- 36405

FARMLAND PARTNERS INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	46-3769850
(State of Organization)	(IRS Employer Identification No.)
4600 South Syracuse Street, Suite 1450 Denver, Colorado	80237-2766
(Address of Principal Executive Offices)	(Zip Code)

(720) 452-3100

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ☒  Yes   ☐ No

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).   ☒  Yes   ☐  No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒  (Do not check if a smaller reporting company)	Smaller reporting company	☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ☐  Yes   ☒  No

As of November 11, 2015,  11,982,689  shares of the Registrant’s common stock were outstanding.

1

Farmland Partners Inc.

FORM 10-Q FOR THE QUARTER ENDED

September 30, 2015

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements
	Combined Consolidated Financial Statements
	Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014	3
	Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (unaudited)	4
	Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (unaudited)	5
	Notes to Combined Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	55
Item 4.	Controls and Procedures	55
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	56

2

Farmland Partners Inc.

Combined Consolidated Balance Sheets

As of September 30, 2015 and December 31, 2014

(Unaudited)

	September 30,		December 31,
		2015		2014
ASSETS
Land, at cost	$	281,315,286	$	152,294,899
Grain facilities		4,259,511		2,650,607
Groundwater		6,332,784		5,004,942
Irrigation improvements		11,130,016		5,188,459
Drainage improvements		1,530,998		783,475
Permanent plantings		1,168,493		—
Other		932,692		570,574
Construction in progress		215,914		—
Real estate, at cost		306,885,694		166,492,956
Less accumulated depreciation		(1,390,697)		(777,469)
Total real estate, net		305,494,997		165,715,487
Deposits		226,912		419,548
Cash		42,504,514		33,736,166
Note and interest receivable, net		1,805,674		—
Deferred offering costs		285,780		—
Accounts receivable		744,240		336,919
Accounts receivable, related party		396,540		182,763
Inventory		199,364		—
Other		432,370		267,431
TOTAL ASSETS	$	352,090,391	$	200,658,314
LIABILITIES AND EQUITY
LIABILITIES
Mortgage notes and bonds payable, net	$	190,060,807	$	113,513,407
Dividends payable		2,060,127		1,122,504
Accrued interest		1,457,065		238,933
Accrued property taxes		564,821		241,221
Deferred revenue (See Note 2)		7,383,186		1,364,737
Accrued expenses		1,338,162		651,672
Total liabilities		202,864,168		117,132,474
Commitments and contingencies (See Note 8)
Redeemable non-controlling interest in operating partnership		9,558,272		—
EQUITY
Common stock, $0.01 par value, 500,000,000 shares authorized; 11,982,689 and 11,980,559 shares issued and outstanding at September 30, 2015, respectively, and 7,731,755 shares issued and outstanding at December 31, 2014		117,634		75,175
Additional paid in capital		114,795,891		68,980,437
Retained earnings (deficit)		6,311		(568,192)
Cumulative dividends		(5,661,014)		(2,130,218)
Non-controlling interests in operating partnership		30,409,129		17,168,638
Total equity		139,667,951		83,525,840
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST IN OPERATING PARTNERSHIP AND EQUITY	$	352,090,391	$	200,658,314

3

See accompanying notes.

Farmland Partners Inc.

Combined Consolidated Statements of Operations

For the three and nine months ended September 30, 2015 and 2014

(Unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2015		2014		2015		2014
OPERATING REVENUES:
Rental income (See Note 2)	$	4,047,223	$	1,189,366	$	8,865,534	$	2,526,185
Tenant reimbursements		104,002		61,283		272,902		188,910
Other revenue		17,926		11,405		17,926		19,008
Total operating revenues		4,169,151		1,262,054		9,156,362		2,734,103
OPERATING EXPENSES
Depreciation and depletion		237,241		100,208		613,381		209,472
Property operating expenses		337,902		65,069		797,525		174,598
Acquisition and due diligence costs		111,908		42,602		179,468		103,525
General and administrative expenses		1,111,586		645,962		2,975,628		1,466,263
Legal and accounting		216,090		87,192		646,632		243,192
Total operating expenses		2,014,727		941,033		5,212,634		2,197,050
OPERATING INCOME		2,154,424		321,021		3,943,728		537,053
OTHER (INCOME) EXPENSE:
Other income		(98,366)		—		(98,366)		—
Interest expense		1,390,880		286,216		3,232,094		909,326
Total other expense		1,292,514		286,216		3,133,728		909,326
Net income (loss) before income tax expense		861,910		34,805		810,000		(372,273)
Income tax expense		4,400		—		4,400		—
NET INCOME (LOSS)		857,510		34,805		805,600		(372,273)
Net (income) loss attributable to non-controlling interests in operating partnership		(184,215)		(7,154)		(177,980)		41,641
Net income attributable to redeemable non-controlling interests in operating partnership		(49,428)		—		(53,117)		—
Net income (loss) attributable to the Company	$	623,867	$	27,651	$	574,503	$	(330,632)
Nonforfeitable dividends allocated to unvested restricted shares		(18,727)		(22,500)		(61,935)		(45,000)
Dividends on redeemable non-controlling interests in operating partnership		(112,675)		—		(225,350)		—
Net income (loss) available to common stockholders of Farmland Partners Inc.	$	492,465	$	5,151	$	287,218	$	(375,632)
Basic and diluted per common share data:
Basic net income (loss) available to common stockholders	$	0.04	$	0.00	$	0.03	$	(0.12)
Diluted net income (loss) available to common stockholders	$	0.04	$	0.00	$	0.03	$	(0.12)
Basic weighted average common shares outstanding		11,154,127		6,305,253		8,872,279		3,168,803
Diluted weighted average common shares outstanding		11,158,280		6,309,584		8,882,102		3,168,803

See accompanying notes.

4

Farmland Partners Inc.

Combined Consolidated Statements of Cash Flows

For the nine months ended September 30, 2015 and 2014

(Unaudited)

5
	For the Nine Months Ended September 30,
	2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	805,600	$	(372,273)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and depletion		613,381		209,472
Amortization of discounts/premiums on debt		128,403		97,987
Amortization of net origination fees related to note receivable		(3,126)		—
Amortization of below market leases		(121,885)		—
Stock based compensation		708,703		446,460
Loss on disposition of assets		3,785		7,419
Changes in operating assets and liabilities:
Increase in accounts receivable		(514,198)		(174,592)
Increase in interest receivable		(14,800)		—
Increase in other assets		(144,464)		(99,020)
Increase in inventory		(188,936)		—
Increase (decrease) in accrued interest		1,218,132		(44,576)
Decrease in accrued expenses		(20,907)		(314,643)
Increase in deferred revenue		5,910,737		1,753,410
Increase in accrued property taxes		273,290		156,440
Net cash provided by operating activities		8,653,715		1,666,084
CASH FLOWS FROM INVESTING ACTIVITIES
Real estate acquisitions		(98,910,034)		(36,891,656)
Real estate improvements		(6,347,542)		(46,128)
Issuance of note receivable		(1,800,000)		—
Origination fees on note receivable		40,000		—
Payment of direct costs related to note receivable		(18,000)		—
Net cash used in investing activities		(107,035,576)		(36,937,784)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from mortgage notes payable		82,475,000		20,700,000
Repayments on mortgage notes payable		(6,128,300)		(12,311,237)
Proceeds from initial public offering		—		49,476,000
Proceeds from underwritten public offering		35,112,000		44,144,980
Common stock repurchased		(20,932)		(1,000)
Payment of offering costs		(479,852)		(2,255,090)
Payment of debt issuance costs		(223,703)		(216,014)
Refund on outstanding debt		300,000		—
Dividends on common stock		(2,900,159)		(625,725)
Contributions from member		—		1,178,107
Distributions to member		—		(16,765)
Distributions to non-controlling interests in operating partnership		(983,845)		(1,071,592)
Net cash provided by financing activities		107,150,209		99,001,664
NET INCREASE IN CASH		8,768,348		63,729,964
CASH, BEGINNING OF PERIOD		33,736,166		17,805
CASH, END OF PERIOD	$	42,504,514	$	63,747,769
Cash paid during period for interest	$	1,886,772	$	853,008
Cash paid during period for taxes	$	4,400	$	—
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Additions to construction in progress included in accrued expenses	$	406,779	$	—
Financing fees included in accrued expenses	$	4,000	$	—
Direct costs related to note receivable included in accrued expenses	$	9,748	$	—
Real estate acquisition costs included in accrued expenses	$	11,348	$	—
Capitalization of deferred offering costs related to at-the-market offering	$	265,092	$	—
Capitalization of deferred offering costs as a result of pending financing transaction	$	—	$	699,013
Dividends payable	$	2,060,127	$	1,016,059
Property tax liability assumed in acquisitions	$	50,310	$	21,959
Issuance of equity and contributions from redeemable non-controlling interests and non-controlling interests in operating partnership in conjunction with acquisitions	$	34,387,828	$	—
Below market lease acquired in acquisitions	$	229,597	$	—
Cash acquired in business combination	$	—	$	(1,000)
Accounts receivable acquired in business combination	$	(106,900)	$	(30,000)
Other assets acquired in business combination	$	(32,500)	$	—
Distribution of accounts receivable to Pittman Hough Farms	$	—	$	(450,833)

See accompanying notes.

5

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements

(Unaudited)

Note 1—Organization and Significant Accounting Policies

Organization

Farmland Partners Inc., collectively with its subsidiaries, (the “Company”), is an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. The Company was incorporated in Maryland on September 27, 2013. The Company is the sole member of the general partner of Farmland Partners Operating Partnership, LP (the “Operating Partnership”), which was formed in Delaware on September 27, 2013. As of September 30, 2015, the Company owned a portfolio of 121 farms, as well as eight grain storage facilities, which are consolidated in these financial statements. All of the Company’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of September 30, 2015, the Company owned 74.1% of the units of limited partnership interest in the Operating Partnership (“OP units”) (see “Note 9—Stockholders’ Equity and Non-controlling Interests” for additional discussion regarding OP units).

The Company and the Operating Partnership commenced operations upon completion of the underwritten initial public offering of shares of the Company’s common stock (the “IPO”) on April 16, 2014 (see “Note 9—Stockholders’ Equity and Non-controlling Interests”). Concurrently with the completion of the IPO, the Company’s predecessor, FP Land LLC, a Delaware limited liability company (“FP Land”), merged with and into the Operating Partnership, with the Operating Partnership surviving (the “FP Land Merger”). As a result of the FP Land Merger, the Operating Partnership succeeded to the business and operations of FP Land, including FP Land’s 100% fee simple interest in a portfolio of 38 farms and three grain storage facilities (the “Contributed Properties”).  

The Company has elected to be taxed as a real estate investment trust, or REIT, under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, (the “Code”), effective with its short taxable year ended December 31, 2014.

On March 16, 2015, the Company formed FPI Agribusiness Inc., a wholly owned subsidiary, as a taxable REIT subsidiary (the “TRS” or “FPI Agribusiness”).  The TRS was formed to provide purchasing services to the Company’s tenants and also to operate a small scale custom farming business on 563 acres of farmland owned by the Company and located in Nebraska.

Principles of Combination and Consolidation

The accompanying combined consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. Upon completion of the IPO and the related formation transactions, the Company succeeded to the operations of FP Land.  FP Land was an entity under the common control of Paul A. Pittman, the Company’s Executive Chairman, President and Chief Executive Officer, and was organized to hold the equity interests of PH Farms LLC, an Illinois limited liability company, and Cottonwood Valley Land, LLC, a Nebraska limited liability company, both of which are engaged in the ownership of farmland and property related to farming in agricultural markets in Illinois, Nebraska and Colorado.  These financial statements retroactively reflect the consolidated equity ownership structure of the Company and the formation transactions.  The formation transactions were accounted for at historical cost due to the existence of common control.

The Company’s financial condition as of September 30, 2015 and December 31, 2014 and the results of operations for the three and nine months ended September 30, 2015 and the three months ended September 30, 2014, reflect the financial condition and results of operations of the Company.  Due to the timing of the IPO and the formation transactions, the results of operations for the nine months ended September 30, 2014 reflect the combined results of operations of FP Land, together with the Company, for the period prior to April 16, 2014 and the consolidated results of the Company for the period from April 16, 2014 through September 30, 2014.

6

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Interim Financial Information

The information in the Company’s combined consolidated financial statements for the three and nine months ended September 30, 2015 and 2014 is unaudited.  All significant inter-company balances and transactions have been eliminated in consolidation.  The accompanying financial statements for the three and nine months ended September 30, 2015 and 2014 include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods.  The financial information should be read in conjunction with the combined consolidated financial statements for the year ended December 31, 2014, included in the Company’s Annual Report on Form 10-K, which the Company filed with the SEC on March 3, 2015.  Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of actual operating results for the entire year ending December 31, 2015.

The combined consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements.  Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

Reclassifications

Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income (loss), equity or cash flows from operations.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 materially differ from those estimates.

Real Estate Acquisitions

The Company accounts for all acquisitions in accordance with the business combinations standard. When the Company acquires farmland that was previously operated as a rental property, the Company evaluates whether a lease is in place or a crop is being produced at the time of closing of the acquisition.  If a lease is in place or a crop is being produced, the Company accounts for the transaction as a business combination and charges the costs associated with the acquisition to acquisition and due diligence costs on the statement of operations, as incurred. Otherwise, acquisitions with no lease in place or crops being produced at the time of acquisition are accounted for as asset acquisitions.  When the Company acquires farmland in a sale-lease back transaction, the Company accounts for the transaction as an asset acquisition and capitalizes the transaction costs incurred in connection with the acquisition.

Upon acquisition of real estate, the Company allocates the purchase price of the real estate based upon the fair value of the assets and liabilities acquired, which historically have consisted of land, drainage improvements, irrigation improvements, groundwater, permanent plantings (bushes, shrubs, vines, and perennial crops) and grain facilities, and may also consist of intangible assets including in-place leases, above market and below market leases, and tenant relationships. The Company allocates the purchase price to the fair value of the tangible assets of acquired real estate by valuing the land as if it were unimproved. The Company values improvements, including permanent plantings and grain facilities, at replacement cost as new, adjusted for depreciation. Management’s estimates of land and groundwater value are made using a comparable sales analysis. Factors considered by management in its analysis of land value include soil types and water availability, the sales prices of comparable farms, and the replacement cost and residual useful life of land improvements. Management’s estimates of groundwater value are made using historical information obtained regarding the applicable aquifer.Factors considered by management in its analysis of groundwater value are related to the location of the aquifer and whether or not the aquifer is a

7

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

depletable resource or a replenishing resource.  If the aquifer is a replenishing resource, no value is allocated to the groundwater.  The Company includes an estimate of property taxes in the purchase price allocation of acquisitions to account for the expected liability that was acquired.

When above or below market leases are acquired, the Company values the intangible assets based on the present value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above market leases and the initial term plus the term of any below market fixed rate renewal options for below market leases that are considered bargain renewal options. The above market lease values will be amortized as a reduction of rental income over the remaining term of the respective leases. The fair value of acquired below market leases, included in deferred revenue on the accompanying combined consolidated balance sheets, is amortized as an increase of rental income on a straight-line basis over the remaining non-cancelable terms of the respective leases, plus the terms of any below market fixed rate renewal options that are considered bargain renewal options of the respective leases.  As of September 30, 2015, the aggregate gross amount of below market leases was $229,597 and the total accumulated amortization was $121,885.  Total amortization related to below market leases was $64,627 and $121,885 for the three and nine months ended September 30, 2015, respectively. 

As of September 30, 2015 and December 31, 2014, the Company did not have any in-place lease or tenant relationship intangibles. The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired, based on the Company’s evaluation of the specific characteristics of each tenant’s lease, availability of replacement tenants, probability of lease renewal, estimated down time and its overall relationship with the tenant. The value of in-place lease intangibles and tenant relationships will be included as an intangible asset, and will be amortized over the remaining lease term (and expected renewal periods of the respective leases for tenant relationships) as amortization expense. If a tenant terminates its lease prior to its stated expiration, any unamortized amounts relating to that lease, including (i) above and below market leases, (ii) in-place lease values, and (iii) tenant relationships, would be recorded to revenue or expense as appropriate.

Using information available at the time acquisition or due diligence costs are incurred, the Company capitalizes acquisition costs for expected asset acquisitions.  If the asset acquisition is abandoned, the capitalized asset acquisition costs will be charged to acquisition and due diligence costs in the period of abandonment.

Total consideration may include a combination of cash and equity securities.  When equity securities are issued, the Company determines the fair value of the equity securities issued based on the number of shares of common stock or OP units issued multiplied by the stock price on the date of closing.

Using information available at the time of acquisition, the Company allocates the total consideration to tangible assets and liabilities and identified intangible assets and liabilities. The Company may adjust the preliminary purchase price allocations after obtaining more information about assets acquired and liabilities assumed at the date of acquisition.

Real Estate

The Company’s real estate consists of land, groundwater and improvements made to the land consisting of permanent plantings, grain facilities, irrigation improvements, drainage improvements and other improvements. The Company records real estate at cost and capitalizes improvements and replacements when they extend the useful life or improve the efficiency of the asset.  Construction in progress includes the costs to build new grain storage facilities and install new pivots and wells on newly acquired farms.  The Company begins depreciating assets when the asset is ready for its intended use.

8

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

The Company expenses costs of repairs and maintenance as such costs are incurred. The Company computes depreciation and depletion for assets classified as improvements using the straight-line method over their estimated useful lives as follows:

	Years
Grain facilities	10	-	40
Irrigation improvements	2	-	40
Drainage improvements	27	-	65
Groundwater	3	-	50
Permanent plantings			23
Other	5	-	40

The Company periodically evaluates the estimated useful lives for groundwater based on current state water regulations and depletion levels of the aquifers.

When a sale occurs, the Company recognizes the associated gain when all consideration has been transferred, the sale has closed and there is no material continuing involvement. If a sale is expected to generate a loss, the Company first assesses it through the impairment evaluation process—see “Impairment of Real Estate Assets” below.

Impairment of Real Estate Assets

The Company evaluates its tangible and identifiable intangible real estate assets for impairment indicators whenever events such as declines in a property’s operating performance, deteriorating market conditions or environmental or legal concerns bring recoverability of the carrying value of one or more assets into question. If such events are present, the Company projects the total undiscounted cash flows of the asset, including proceeds from disposition, and compares them to the net book value of the asset. If this evaluation indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. There have been no impairments recognized on real estate assets in the accompanying financial statements.

Cash

The Company’s cash at September 30, 2015 and December 31, 2014 was held in the custody of two financial institutions, and the Company’s balance at any given financial institution may at times exceed federally insurable limits. The Company monitors balances with individual financial institutions to mitigate risks relating to balances exceeding such limits.

Debt Issuance Costs

Costs incurred by the Company or its predecessor in obtaining debt are deducted from the face amount of mortgage notes and bonds payable.  During the nine-month period ended September 30, 2015, $227,703 in costs were incurred in conjunction with the issuance of five bonds under the Farmer Mac Facility (as defined below).  During the year ended December 31, 2014, $135,340 and $234,188 in costs were incurred in conjunction with the modification of the First Midwest Bank debt on April 16, 2014 and the issuance of five bonds under the Farmer Mac Facility, respectively. Debt issuance costs are amortized using the straight-line method, which approximates the effective interest method, over the terms of the related indebtedness. Any unamortized amounts upon early repayment of mortgage notes payable are written off in the period in which repayment occurs. Fully amortized debt issuance costs are removed from the books upon maturity or repayment of the underlying debt. The Company wrote off $12,300 in debt issuance costs in conjunction with the early repayment of debt during the nine months ended September 30, 2015, and no costs were written off during the three months ended September 30, 2015. Accumulated amortization of debt issuance costs was $253,301 and $97,439 as of September 30, 2015 and December 31, 2014, respectively.

9

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Note and Interest Receivable

The note receivable is stated at its unpaid principal balance, and includes unamortized direct origination costs and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points. 

Management determines the appropriate classification of debt securities at the time of issuance and reevaluates such designation as of each statement of financial position date.  As of September 30, 2015, the Company has designated the note receivable as held-to-maturity based on the Company’s positive intent and ability to hold the security until maturity.  Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method.  Such amortization, including interest, is included in other revenue within our combined consolidated statements of operations.

Allowance for Note and Interest Receivable

A note is placed on nonaccrual status when management determines, after considering economic and business conditions and collection efforts, that the note is impaired or collection of interest is doubtful.  The accrual of interest on the instrument ceases when there is concern as to the ultimate collection of principal or interest due according to the note agreement will not be realized.  Any payment received on such non-accrual notes are recorded as interest income when the payment is received.  The note is reclassified as accrual-basis once interest and principal payments become current.  The Company periodically reviews the value of the underlying collateral of farm real estate for the note receivable and evaluates whether the value of the collateral continues to provide adequate security for the note.  Should the value of the underlying collateral become less than the outstanding principal and interest, the Company will determine whether there is a requirement to record an allowance.  Any uncollectible interest previously accrued is also charged off, or an allowance is established by a charge to interest income.  As of September 30, 2015, we believe the value of the underlying collateral to be sufficient and in excess of the outstanding principal and accrued interest.

Deferred Offering Costs

Deferred offering costs include incremental direct costs incurred by the Company in conjunction with proposed or actual offering of securities.  At the completion of the offering, the deferred offering costs are charged ratably as a reduction of the gross proceeds of equity as stock is issued.  If an offering is abandoned, the previously deferred offering costs will be charged to operations in the period in which the abandonment occurs.  The Company incurred $370,493 and $756,970 in deferred offering costs in the three and nine months ended September 30, 2015, respectively.  As of September 30, 2015 and December 31, 2014, the Company had $285,780 and $0, respectively, in deferred offering costs related to regulatory, legal, accounting and professional service costs associated with proposed or actual offering of securities.

Accounts Receivable

Accounts receivable are presented at face value, net of the allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income and is maintained at a level believed adequate by management to absorb estimated bad debts based on historical experience and current economic conditions. The allowance for doubtful accounts was $0 as of September 30, 2015 and December 31, 2014.

Inventory

The costs of growing crop are accumulated until the time of harvest at the lower of cost or market value and are included in inventory in our combined consolidated financial statements.  Costs are allocated to growing crops based on a percentage of the total costs of production and total operating costs that are attributable to the portion of the crops that remain in inventory at the end of the year.  Growing crop consists primarily of land preparation, cultivation, irrigation and fertilization costs incurred by FPI Agribusiness. Growing crop inventory is charged to cost of products sold when the related crop is harvested and sold. 

10

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Harvested crop inventory includes costs accumulated during the growing phase plus harvesting costs and are stated at the lower of those costs or the estimated net realizable value, which is the market price, based upon the nearest market in the geographic region, less any cost of disposition.  Cost of disposition includes broker’s commissions, freight and other marketing costs.   

Other inventory such as fertilizer and pesticides are valued at the lower of cost or market.

Inventory consisted of the following:

	September 30, 2015
Growing crop	$	193,278
Fertilizer and pesticides		6,086
	$	199,364

Revenue Recognition

Rental income includes rents that each tenant pays in accordance with the terms of its lease. Minimum rents pursuant to leases are recognized as revenue on a straight-line basis over the lease term. Deferred revenue includes the cumulative difference between the rental revenue recorded on a straight-line basis and the cash rent received from tenants in accordance with the lease terms.  Acquired below market leases are included in deferred revenue on the accompanying combined consolidated financial statements, which are amortized into rental income over the life of the respective leases, plus the terms of the below market renewal options, if any.

Leases in place as of September 30, 2015 had terms ranging from one to five years.  As of September 30, 2015, the Company had 17 leases with renewal options and one lease with rent escalations.  The majority of the Company’s leases provide for a fixed cash rent payment.  Tenant leases on acquired farms generally require the tenant to pay the Company rent for the entire initial year regardless of the date of acquisition, if the acquisition is closed prior to, or shortly after, planting of crops.  If the acquisition is closed later in the year, the Company typically receives a partial rent payment or no rent payment at all.

Certain of the Company’s leases provide for a rent payment determined as a percentage of the gross farm proceeds or a percentage of harvested crops.  As of September 30, 2015, all such leases provided for a rent payment determined as a percentage of the gross farm proceeds.  Revenue under leases providing for a payment equal to a percentage of the harvested crop or a percentage of the gross farm proceeds is recognized upon notification from the grain facility that grain has been delivered in the Company’s name or when the tenant has notified the Company of the total amount of gross farm proceeds.

Certain of the Company’s leases provide for minimum cash rent plus a bonus based on gross farm proceeds.  Revenue under this type of lease is recognized on a straight-line basis over the lease term based on the minimum cash rent.  Bonus rent is recognized upon notification from the tenant of the gross farm proceeds for the year.

Tenant reimbursements include reimbursements for real estate taxes that each tenant pays in accordance with the terms of its lease. When leases require that the tenant reimburse the Company for property taxes paid by the Company, the reimbursement is reflected as tenant reimbursement revenue on the statement of operations, as earned, and the related property tax as property operating expense, as incurred.  When a lease requires that the tenant pay the taxing authority, directly, the Company does not incur this cost.  When it becomes probable that a tenant will not be able to bear the property related costs the Company will accrue the estimated expense.

The Company records revenue from the sale of harvested crops when the harvested crop has been delivered to a grain facility

11

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

and title has transferred.  Harvested crops delivered under marketing contracts are recorded using the fixed price of the marketing contract at the time of delivery to a grain facility.  Harvested crops delivered without a marketing contract are recorded using the market price at the date the harvested crop is delivered to the grain facility and title has transferred.

The Company recognizes interest income on notes receivable on an accrual basis over the life of the note.  Direct origination costs are netted against loan origination fees and are amortized over the life of the note using the straight-line method, which approximates the effective interest method, as an adjustment to interest income which is included in operating revenue as a component of other income in the Company’s Combined Consolidated Statements of Operations for the three and nine months ended September 30, 2015.

Income Taxes

As a REIT, the Company is permitted to deduct dividends paid to its stockholders, thereby eliminating the U.S. federal taxation of income represented by such distributions at the Company level, provided certain requirements are met. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates. 

The Operating Partnership leases certain of its farms to the TRS, which is subject to federal and state income taxes.  The TRS accounts for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective income tax bases and for operating loss, capital loss and tax credit carryforwards based on enacted income tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.  At September 30, 2015, the Company did not have any deferred tax assets or liabilities.

The Company performs an annual review for any uncertain tax positions and, if necessary, will record future tax consequences of uncertain tax positions in the financial statements.  At September 30, 2015, the Company did not identify any uncertain tax positions.

When the Company acquires a property in a business combination, the Company evaluates such acquisition for any related deferred tax assets or liabilities and determines if a deferred tax asset or liability should be recorded in conjunction with the purchase price allocation.  If a built-in gain is acquired, the Company evaluates the required holding period (generally 5 - 10 years) and determines if it has the ability and intent to hold the underlying assets for the necessary holding period.  If the Company has the ability to hold the underlying assets for the required holding period, no deferred tax liability is recorded with respect to the built-in gain.

Derivatives and Hedge Accounting

The Company enters into marketing contracts to sell commodities.  Derivatives and hedge accounting guidance requires a company to evaluate these contracts to determine whether the contracts are derivatives.  Certain contracts that meet the definition of a derivative may be exempt from derivative accounting if designated as normal purchase or normal sales.  The Company evaluates all contracts at inception to determine if they are derivatives and if they meet the normal purchase and normal sale designation requirements.  All contracts entered into in the three and nine months ended September 30, 2015 met the criteria to be exempt from derivative accounting and have been designated as normal purchase and sales exceptions for hedge accounting.

12

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Segment Reporting

The Company’s chief operating decision maker does not evaluate performance on a farm-specific or transactional basis and does not distinguish the Company’s principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP.

Earnings Per Share

Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the weighted average number of unvested restricted shares (“participating securities” as defined in Note 9).  Diluted earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities such as stock grants or shares that would be issued in the event that OP units are redeemed for shares of common stock of the Company.  No adjustment is made for shares that are anti-dilutive during a period.

Non-controlling Interests

The Company’s non-controlling interests are interests in the Operating Partnership not owned by the Company.  The Company evaluates whether non-controlling interests are subject to redemption features outside of its control. The Company classifies non-controlling interests that are contingently redeemable solely for cash (unless shareholder approval is obtained to redeem for shares of common stock) one year after issuance or deemed probable to eventually become redeemable and which have redemption features outside of our control, as redeemable non-controlling interests in the mezzanine section of its combined consolidated balance sheets.  The Company has elected to accrete the change in redemption value subsequent to issuance and during the respective twelve-month holding period, after which point the units will be marked to redemption value at each reporting period. The majority of the Company’s non-controlling interests, which are redeemable for cash or shares of the Company’s common stock, at the Company’s option, are reported in the equity section of the Company’s combined consolidated balance sheets. The amounts reported for non-controlling interests on the Company’s combined consolidated statements of operations represent the portion of income or losses not attributable to the Company.

Stock Based Compensation

From time to time, the Company may award non-vested shares under the Company’s Amended and Restated 2014 Equity Incentive Plan as compensation to officers, employees, non-employee directors and non-employee consultants (see “Note 9 – Stockholders’ Equity and Non-controlling Interests”).  The shares issued to officers, employees, and non-employee directors vest over a period of time as determined by the Board of Directors at the date of grant.  The Company recognizes compensation expense for non-vested shares granted to officers, employees and non-employee directors on a straight-line basis over the requisite service period based upon the fair market value of the shares on the date of grant, as adjusted for forfeitures.  When an unvested award is forfeited, the Company recognizes compensation expense for dividends paid on the unvested award.  The Company recognizes expense related to non-vested shares granted to non-employee consultants over the period that services are received.  The change in fair value of the shares to be issued upon vesting is remeasured at each reporting period and is recorded in general and administrative expenses on the combined consolidated statement of operations.  During the nine months ended September 30, 2015, the Company recorded a decrease in stock based compensation related to non-employee share awards of $31,739, as a result of a change in fair value of the unvested shares.

New or Revised Accounting Standards Not Yet Effective

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2015-03,Simplifying the Presentation of Debt Issuance Costs.  ASU 2015-03 requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge asset. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2015-03.  The Company had unamortized deferred financing fees of $424,434 and $364,893 as of September

13

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

30, 2015 and December 31, 2014, respectively.  These costs have been reclassified from deferred financing fees to mortgage notes and bonds payable.  All periods presented have been retroactively adjusted.

The following table summarizes the retroactive adjustment and the overall impact on the previously reported combined consolidated financial statements:

	December 31, 2014
	As previously reported		Retroactive Application
Deferred finance fees, net	$	364,893	$	—
Mortgage notes and bonds payable, net	$	113,878,300	$	113,513,407

In August 2015, the FASB issued ASU No. 2015-15,Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements— Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting which clarified that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement.  We have assessed the impact of ASU 2015-15 and it does not have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-15 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted.

In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, pertaining to entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Any adjustments should be calculated as if the accounting had been completed at the acquisition date. We are currently assessing the impact of ASU 2015-16 and do not expect it to have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-16 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted.

Note 2—Revenue Recognition

The Company typically receives one lease payment per year from tenants either during the first quarter of the year or at the time of acquisition of the related farm.  As such, the rental income received is recorded on a straight-line basis over the lease term.  Payments received in advance are included in deferred revenue until they are earned.  As of September 30, 2015, the Company had $7,383,186 in deferred revenue, $3,475,965 of which will be recognized during the remainder of the fiscal year ending December 31, 2015, as a result of straight-lining advance payments.  Unamortized below market leases as of September 30, 2015 were $107,712 and are included in deferred revenue. As of December 31, 2014, the Company had $1,364,737 in deferred revenue. 

14

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

The following represents a summary of the cash rent received during the three and nine months ended September 30, 2015 and 2014 and the rental income recognized for the three and nine months ended September 30, 2015 and 2014:

	Cash rent received								Rental income recognized
	For the three months ended				For the nine months ended				For the three months ended				For the nine months ended
	September 30,				September 30,				September 30,				September 30,
	2015		2014		2015		2014		2015		2014		2015		2014
Leases in effect at the beginning of the year	$	—	$	42,537	$	5,505,082	$	2,551,664	$	1,776,734	$	678,391	$	5,363,933	$	1,950,098
Leases entered into during the year		763,820		65,000		8,542,662		1,677,847		2,270,489		510,975		3,501,601		576,087
	$	763,820	$	107,537	$	14,047,744	$	4,229,511	$	4,047,223	$	1,189,366	$	8,865,534	$	2,526,185

Future minimum lease payments from tenants under all non-cancelable leases in place as of September 30, 2015, including lease advances, when contractually due, but excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues, for the remainder of 2015 and each of the next four years as of September 30, 2015 are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	7,242,070
2016		10,618,111
2017		5,838,791
2018		4,068,190
2019		15,441
	$	27,782,603

Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only.

On November 6, 2015, the Company amended two leases with its largest tenant to modify the payment schedule for certain rental payments and increase the tenant rent due for the 2016 calendar year.  See Note 10 for additional information regarding the lease amendment and the impact on future cash rents.

15

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Note 3—Concentration Risk

Credit Risk

For the three and nine months ended September 30, 2015 and 2014, the Company had certain tenant concentrations as set forth in the table below.  Astoria Farms and Hough Farms are related parties (see ‘‘Note 4—Related Party Transactions’’).  If a significant tenant, representing a tenant concentration, fails to make rental payments to the Company or elects to terminate its leases, and the land cannot be re-leased on satisfactory terms, there would be a material adverse effect on the Company’s financial performance and the Company’s ability to continue operations.  Rental income received is recorded on a straight-line basis over the applicable lease term.  The following is a summary of the Company’s significant tenants:

	Rental income recognized
	For the three months ended								For the nine months ended
	September 30,								September 30,
	2015				2014				2015				2014
Astoria Farms	$	551,563	13.6	%	$	545,035	45.8	%	$	1,645,315	18.6	%	$	1,635,104	64.7	%
Hough Farms		133,442	3.3	%		73,675	6.2	%		390,437	4.4	%		221,025	8.7	%
Justice Family Farms LLC (1)		1,379,887	34.1	%		—	—	%		2,128,990	24.0	%		—	—	%
Hudye Farms tenant A (2)		201,740	5.0	%		201,740	17.0	%		605,221	6.8	%		217,174	8.6	%
	$	2,266,632			$	820,450			$	4,769,963			$	2,073,303

	Cash rent received
	For the three months ended								For the nine months ended
	September 30,								September 30,
	2015				2014				2015				2014
Astoria Farms	$	9,375	1.2	%	$	—	—	%	$	2,196,878	15.6	%	$	2,180,139	51.5	%
Hough Farms		—	—	%		—	—	%		528,824	3.8	%		294,700	7.0	%
Justice Family Farms LLC (1)		—	—	%		—	—	%		6,037,065	43.0	%		—	—	%
Hudye Farms tenant A (2)		—	—	%		—	—	%		677,612	4.8	%		677,612	16.0	%
	$	9,375			$	—			$	9,440,379			$	3,152,451

(1) The Justice farms were acquired in two separate transactions that closed on December 22, 2014 and June 2, 2015.

(2) Hudye Farms was acquired on June 12, 2014.

16

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Geographic Risk

The following table summarizes the percentage of approximate total acres owned as of September 30, 2015 and 2014 and rental income recorded by the Company for the three and nine months ended September 30, 2015 and 2014 by location of the farm (unaudited):

					Rental income
	Approximate % of total acres				For the three months ended				For the nine months ended
	as of September 30,				September 30,				September 30,
Location of Farm	2015		2014		2015		2014		2015		2014
Illinois	8.3	%	23.6	%	14.3	%	47.3	%	19.3	%	66.8	%
Colorado	27.9	%	65.6	%	14.3	%	41.6	%	18.8	%	22.1	%
South Carolina	13.9	%	—	%	14.8	%	—	%	16.2	%	—	%
North Carolina	15.6	%	—	%	23.5	%	—	%	14.0	%	—	%
Nebraska	7.9	%	5.2	%	10.0	%	7.7	%	10.9	%	9.4	%
Arkansas	14.6	%	2.8	%	10.0	%	—	%	8.8	%	—	%
Mississippi	6.0	%	—	%	6.9	%	—	%	6.0	%	—	%
Louisiana	2.8	%	—	%	2.6	%	—	%	3.5	%	—	%
Virginia	1.7	%	—	%	2.6	%	—	%	1.6	%	—	%
Kansas	1.0	%	2.8	%	0.5	%	3.4	%	0.7	%	1.7	%
Michigan	0.3	%	—	%	0.5	%	—	%	0.2	%	—	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Note 4—Related Party Transactions

See Note 5 for related party acquisition of the Tomasek farm.

As of September 30, 2015, 11% of the acres in the Company’s farm portfolio was rented to and operated by Astoria Farms or Hough Farms, both of which are related parties. Astoria Farms is a partnership in which Pittman Hough Farms LLC (“Pittman Hough Farms”), which is 75% owned by Mr. Pittman, has a 33.34% interest. The balance of Astoria Farms is held by limited partnerships in which Mr. Pittman is the general partner. Hough Farms is a partnership in which Pittman Hough Farms has a 25% interest. The aggregate rent recognized by the Company for these entities for the three and nine months ended September 30, 2015 was $685,005 and $2,035,752, respectively, and was $618,710 and $1,856,129 for the three and nine months ended September 30, 2014, respectively. As of September 30, 2015 and December 31, 2014, the Company had accounts receivable from these entities of $380,122 and $182,763, respectively.

For the three and nine months ended September 30, 2014, Pittman Hough Farms incurred $0 and $219,597, respectively, in professional fees on behalf of the Company.  No such amounts were incurred for the three and nine months ended September 30, 2015.

American Agriculture Corporation (‘‘American Agriculture’’) is a Colorado corporation that is 75% owned by Mr. Pittman and 25% owned by Jesse J. Hough, who provides consulting services to the Company. On April 16, 2014, the Company entered into a shared services agreement with American Agriculture pursuant to which the Company paid American Agriculture an annual fee of $175,000 in equal quarterly installments in exchange for management and accounting services.  The agreement was terminated effective as of December 31, 2014, by mutual agreement of both parties.

The Company reimbursed American Agriculture $1,328 and $20,489 for general and administrative expenses during the three and nine months ended September 30, 2015, respectively, which are included in general and administrative expenses in the combined consolidated statements of operations.  As of September 30, 2015 and December 31, 2014, the Company had

17

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

outstanding payables to American Agriculture of $0 and $49,160, respectively, included in accrued expenses in the combined consolidated balance sheets.  As of September 30, 2015, the Company had outstanding receivables from American Agriculture of $16,418.

On July 21, 2015, the Company entered into a lease agreement with American Agriculture Aviation LLC (“American Ag Aviation”) for the use of a private plane.  American Ag Aviation is a Colorado limited liability company that is owned by Mr. Pittman and Pittman Hough Farms.  During the three and nine months ended September 30, 2015, the Company incurred costs of $50,460 and $79,410 from American Ag Aviation, for use of the aircraft and in accordance with the lease agreement.  These costs were recognized based on the nature of the associated use, as follows: (i) general and administrative: expensed as general and administrative expenses within the Company’s combined consolidated statements of operations; (ii) land acquisition (accounted for as an asset acquisition): allocated to the acquired real estate assets within the Company’s combined consolidated balance sheets, and (iii) land acquisition (accounted for as a business combination): expensed as acquisition and due diligence costs within the Company’s combined consolidated statements of operations.  As of September 30, 2015 and December 31, 2014, the Company had outstanding payables to American Ag Aviation of $50,460 and $0, respectively, included in accrued expenses in the combined consolidated balance sheets.

On April 1, 2015, the TRS and Hough Farms entered into a custom farming arrangement, pursuant to which Hough Farms will perform custom farming on 563 acres.  During the three and nine months ended September 30, 2015, the Company incurred $7,440 and $20,289, respectively, in custom farming costs, which are included in inventory in the combined consolidated balance sheets.  As of September 30, 2015, the Company owed Hough Farms $7,440 for irrigation related costs, which are included in accrued expenses in the combined consolidated balance sheet.

On March 21, 2014 and April 16, 2014, the Company and FP Land entered into reimbursement agreements with Pittman Hough Farms to reimburse Pittman Hough Farms for costs incurred to complete the IPO and the FP Land Merger. The amount of the costs that were reimbursed was reduced by interest expense of $78,603 related to outstanding debt at the time of the FP Land Merger, which was accrued by FP Land as of December 31, 2013.  The aggregate net reimbursable amount under the agreements was $1,361,321.  On June 9, 2014, the Company and the Operating Partnership entered into an additional reimbursement agreement with Pittman Hough Farms for $51,537 in professional fees incurred prior to the IPO.

18

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Note 5—Real Estate

As of September 30, 2015, the Company owned 121 separate farms, as well as eight grain storage facilities.

During the nine months ended September 30, 2015, the Company acquired the following farms:

			Total
		Date	approximate	Purchase		Acquisition
Acquisition / Farm	County	acquired	acres	price		costs		Type of acquisition
Swarek	Quitman, MS	1/14/2015	850	$	3,511,919	$	5,819	Asset acquisition
Stonington Bass	Baca, CO	2/18/2015	997		2,079,000		1,277	Business combination
Benda Butler	Butler, NE	2/24/2015	73		605,799		1,393	Asset acquisition
Benda Polk	Polk, NE	2/24/2015	123		860,998		1,748	Asset acquisition
Timmerman (1)	Phillips, CO	3/13/2015	315		2,026,220		477	Asset acquisition
Cypress Bay	Bamberg, SC	3/13/2015	502		2,303,573		3,573	Asset acquisition
Nebraska Battle Creek farms (5 farms) (2)	Madison, NE	4/10/2015	1,117		9,022,595		19,776	Business combination
Northeast Nebraska farms (6 farms) (3)	Pierce, NE	4/10/2015	1,160		8,981,209		19,761	Business combination
Drury	Yuma, CO	4/10/2015	160		950,000		396	Business combination
Sutter	Yuma, CO	4/17/2015	322		2,000,056		56	Asset acquisition
Bobcat	St. Francis, AR	4/30/2015	934		3,024,750		11,642	Business combination
Swindoll Darby	Tunica, MS	5/14/2015	359		1,468,457		2,207	Asset acquisition
Abraham	Fulton, IL	5/29/2015	110		761,844		2,191	Asset acquisition
Justice farms (8 farms) (4)	(5)	6/2/2015	14,935		80,913,167		198,533	Asset acquisition
Tomasek (6)	McDonough, IL	6/30/2015	58		690,463		2,162	Business combination
Purdy	Crittenden & Mississippi, AR	7/2/2015	1,383		6,167,992		21,342	Asset acquisition
Matthews	Tunica & DeSoto, MS	7/10/2015	1,130		5,576,210		21,810	Asset acquisition
Riccioni	Van Buren, MI	9/15/2015	181		2,557,595		13,595	Asset acquisition
			24,709	$	133,501,847	$	327,758

(1) On March 13, 2015, the Company issued 63,581 shares of common stock (with a fair value of $712,743 as of the date of closing) as partial consideration for the acquisition of the Timmerman farm.

(2) On April 10, 2015, the Company issued 118,634 OP units (with a fair value of $1,372,595 as of the date of closing) as partial consideration for the acquisition of the Nebraska Battle Creek farms.

(3) On April 10, 2015, the Company issued 119,953 OP units (with a fair value of $1,387,856 as of the date of closing) as partial consideration for the acquisition of the Northeast Nebraska farms.

(4) On June 2, 2015, the Company issued 824,398 shares of common stock and 1,993,709 OP units, of which 883,724 are redeemable for cash, (with an aggregate fair value of $30,914,634, as of the date of closing) as partial consideration for the acquisition of the Justice farms.

(5) The Justice farms are located in Beaufort, Currituck, Pamlico, Pasquotank and Perquimans counties, NC; Marlboro County, SC; and Chesapeake, VA.

(6) On June 30, 2015, the Company acquired the Tomasek property from Mr. Pittman. The purchase price of the property approximated fair value.  In conjunction with the acquisition, the Company assumed a two year lease with Astoria Farms with annual rents of $18,749.

19

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

During the nine months ended September 30, 2014, the Company acquired the following farms:

			Total
		Date	approximate	Purchase		Acquisition
Acquisition / Farm	County	acquired	acres	price		costs		Type of acquisition
Erker (5 farms)	Kit Carson, CO	5/30/2014	3,171	$	7,644,339	$	5,017	Asset acquisition
Hudye (11 farms) (1)	Kit Carson and Cheyenne, CO and Sherman and Logan, KS	6/12/2014	12,500		24,500,000		63,836	Businesscombination
Broadwater	Morrill, NE	7/1/2014	640		1,040,666		666	Asset acquisition
Ruder	Yell, AR	9/24/2014	667		2,705,800		9,180	Business combination
			16,978	$	35,890,805	$	78,699

(1) On June 12, 2014, the Company acquired all of the outstanding stock in Hudye Farms U.S., Inc. (“HFUSI”), which owned an approximately 12,500-acre farm (referred to as the Hudye farm) located primarily in eastern Colorado, for $24.5 million, excluding related acquisition costs of $63,836.  The Company funded this business combination with cash available from the IPO.  All tenant leases were terminated by the previous owner prior to the closing of the acquisition.  On June 20, 2014, HFUSI was merged with and into FPI Burlington Farms LLC, a wholly owned subsidiary of the Company, with FPI Burlington Farms LLC surviving. FPI Burlington Farms LLC entered into new leases with tenants on June 23, 2014.  The new leases provide for aggregate annual cash rent of $1.2 million. Rent for 2014 was paid at lease execution in its entirety, without proration. In conjunction with the business combination, the Company acquired a tax built-in gain of $17.8 million.  No deferred tax liability was recorded with respect to the tax built-in gain as the Company has the ability and intent to hold the property for the required holding period.

The preliminary allocation of purchase price for the farms acquired during the nine months ended September 30, 2015 are as follows:

	Land		Groundwater		Irrigation improvements		Permanent plantings & other		Timber		Accounts receivable		Below market lease		Accrued property taxes		Total
Swarek	$	3,470,706	$	—	$	41,213	$	—	$	—	$	—	$	—	$	—	$	3,511,919
Stonington Bass		1,994,800		—		79,600		4,600		—		—		—		—		2,079,000
Benda Butler		606,566		—		—		—		—		—		—		(767)		605,799
Benda Polk		861,714		—		—		—		—		—		—		(716)		860,998
Timmerman		1,365,403		625,900		36,600		—		—		—		—		(1,683)		2,026,220
Cypress Bay		1,959,173		—		276,000		68,400		—		—		—		—		2,303,573
Nebraska Battle Creek farms (5 farms)		8,756,895		—		339,000		—		—		37,375		(88,950)		(21,725)		9,022,595
Northeast Nebraska farms (6 farms)		8,872,203		—		235,800		—		—		29,933		(140,647)		(16,080)		8,981,209
Drury		808,975		106,925		34,100		—		—		—		—		—		950,000
Sutter		1,300,739		595,017		104,300		—		—		—		—		—		2,000,056
Bobcat		2,808,131		—		183,500		—		—		30,217		—		2,902		3,024,750
Swindoll Darby		1,436,989		—		32,600		—		—		—		—		(1,132)		1,468,457
Abraham		761,894		—		—		—		—		—		—		(50)		761,844
Justice farms (8 farms)		80,758,395		—		95,831		37,500		32,500		—		—		(11,059)		80,913,167
Tomasek		681,088		—		—		—		—		9,375		—		—		690,463
Purdy		5,923,605		—		244,387		—		—		—		—		—		6,167,992
Matthews		5,337,735		—		77,475		161,000		—		—		—		—		5,576,210
Riccioni		903,810		—		286,292		1,367,493		—		—		—		—		2,557,595
	$	128,608,821	$	1,327,842	$	2,066,698	$	1,638,993	$	32,500	$	106,900	$	(229,597)	$	(50,310)	$	133,501,847

The allocation of the purchase price for the farms acquired during the nine months ended September 30, 2015 is preliminary and may change during the measurement period if the Company obtains new information regarding the assets acquired or liabilities assumed at the acquisition date.

20

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

The allocation of purchase price for the farms acquired during the nine months ended September 30, 2014 are as follows:

	Land		Groundwater		Irrigation improvements		Other		Cash		Accounts receivable		Accrued property taxes		Total
Erker (5 farms)	$	6,350,958	$	1,012,000	$	284,672	$	—	$	—	$	—	$	(3,291)	$	7,644,339
Hudye (11 farms)		23,466,271		730,550		246,109		70,000		1,000		—		(13,930)		24,500,000
Broadwater		848,077		—		179,100		18,000		—		—		(4,511)		1,040,666
Ruder		2,645,176		—		40,050		—		—		20,800		(226)		2,705,800
	$	33,310,482	$	1,742,550	$	749,931	$	88,000	$	1,000	$	20,800	$	(21,958)	$	35,890,805

The Company has included the results of operations for the acquired real estate in the combined consolidated statements of operations from the dates of acquisition.  The real estate acquired in business combinations during the nine months ended September 30, 2015 contributed an aggregate of $284,012 and $524,811 to total revenue and $231,681 and $363,849 to the net income (loss) (including related real estate acquisition costs of $0 and $55,014) for the three and nine months ended September 30, 2015, respectively.  The real estate acquired in business combinations during the nine months ended September 30, 2014 contributed an aggregate $390,620 and $447,441 to total revenue and $342,022 and $322,631 to net income (including related real estate acquisition costs of $9,180 and $73,016) for the three and nine months ended September 30, 2014, respectively.

The unaudited pro forma information presented below does not purport to represent what the actual results of operations of the Company would have been had the business combinations outlined above occurred as of the beginning of the periods presented, nor does it purport to predict the results of operations of future periods.

The unaudited pro forma information is presented below as if the real estate acquired in business combinations during the nine months ended September 30, 2015 had been acquired on January 1, 2014.  The following table does not include the pro forma financial information for the Stonington Bass, Drury and Bobcat farms, as historical results for the farms were not available.  The unaudited pro forma information is presented below as if the Hudye and Ruder farms acquired during the nine months ended September 30, 2014 had been acquired on January 1, 2013.

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Pro forma
Total operating revenues	$	4,102,300	$	1,402,790	$	9,210,664	$	3,899,326
Net income (loss)	$	788,304	$	141,798	$	842,369	$	671,112
Earnings per share basic and diluted
Income (loss) per basic share attributable to common stockholders	$	0.04	$	0.01	$	0.04	$	0.17
Income (loss) per diluted share attributable to common stockholders	$	0.04	$	0.01	$	0.04	$	0.17
Weighted-average number of common shares - basic		11,154,127		6,305,253		8,872,279		3,168,803
Weighted-average number of common shares - diluted		11,158,280		6,309,584		8,882,102		3,168,803

Note 6—Note Receivable

In August 2015, the Company announced the launch of the FPI Loan Program, an agricultural lending product aimed at farmers, as a complement to the Company's current business of acquiring and owning farmland and leasing it to farmers.  Under the FPI Loan Program, the Company intends to make loans to third-party farmers (both tenant and non-tenant) to provide partial financing for working capital requirements and operational farming activities, farming infrastructure projects, and for other farming and agricultural real estate related projects. These loans are expected to be collateralized by farm real estate and are

21

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

expected to be in principal amounts ranging from $500,000 to $5,000,000 at fixed interest rates with maturities of up to three years. The Company expects the borrower to repay the loans in accordance with the loan agreements based on farming operations and access to other forms of capital, as permitted.

On August 24, 2015, the Company entered into a promissory note agreement with a third-party non-tenant farmer to provide up to $2,000,000 in the form of a term note.  As of September 30, 2015, $1,800,000 has been funded with the remaining $200,000 of funding subject to the satisfaction of customary lending requirements, including finalization and issuance of the title research and appraisal report.  The note has a fixed annual interest rate with principal and all accrued interest due at maturity on January 15, 2016.  Upfront commitment and origination fees of $40,000 were paid by the borrower, offset by $27,748 of origination costs incurred by the Company, and the net amount will be amortized over the life of the note.  The note is secured by a first mortgage on farm real estate.  As of September 30, 2015, the carrying value of the note receivable was $1,805,674, which was comprised of $1,800,000 of principal and $14,800 of accrued interest, and $9,126 of net origination fees. As of September 30, 2015, management considers the note receivable to be fully collectible; therefore, no allowance or reserve has been reflected in the financial statements.

Fair Value

The Company determined that the significant inputs used to value its note receivable fall within Level 2 of the fair value hierarchy. As of September 30, 2015, the Company believes the carrying amount of the note receivable approximates fair value because of the short-term maturity and market interest rate of the instrument.

22

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Note 7—Mortgage Notes and Bonds Payable

As of September 30, 2015 and December 31, 2014, the Company had the following indebtedness outstanding:

											Book
			Annual								Value of
			Interest								Collateral
			Rate as of	Principal Outstanding as of							as of
Loan	Payment Terms	Interest Rate Terms	September 30, 2015	September 30, 2015			December 31, 2014			Maturity	September 30, 2015
First Midwest Bank	Annual principal / quarterly interest	Greater of LIBOR + 2.59%  and 2.80%	2.80%	$	650,000	(1)	$	754,000	(1)	June 2016	$	1,143,333	(2)
First Midwest Bank	Annual principal / quarterly interest	Greater of LIBOR + 2.59%  and 2.80%	2.80%		26,000,000	(1)		30,000,000	(1)	March 2016		24,020,052	(3)
Farmer Mac Bond #1	Semi-annual interest only	2.40%	2.40%		20,700,000			20,700,000		September 2017		30,315,923
Farmer Mac Bond #2	Semi-annual interest only	2.35%	2.35%		5,460,000			5,460,000		October 2017		9,005,272
Farmer Mac Bond #3	Semi-annual interest only	2.50%	2.50%		10,680,000			10,680,000		November 2017		10,703,039
Farmer Mac Bond #4	Semi-annual interest only	2.50%	2.50%		13,400,000			13,400,000		December 2017		23,553,538
Farmer Mac Bond #5	Semi-annual interest only	2.56%	2.56%		30,860,000			30,860,000		December 2017		52,800,877
Farmer Mac Bond #6	Semi-annual interest only	3.69%	3.69%		14,915,000			—		April 2025		20,100,764
Farmer Mac Bond #7	Semi-annual interest only	3.68%	3.68%		11,160,000			—		April 2025		18,188,079
Farmer Mac Bond #8A	Semi-annual interest only	3.20%	3.20%		41,700,000			—		June 2020		80,889,774	(4)
Farmer Mac Bond #8B	(5)	Libor + 1.80%	2.00%		8,100,000			—		May 2016		—	(4)
Farmer Mac Bond #9	Semi-annual interest only	3.35%	3.35%		6,600,000			—		July 2020		8,745,401
Tindall	Principal at maturity	0.00%	—		—			1,180,800		January 2015		—
Tindall	Principal at maturity	0.00%	—		—			563,500		January 2015		—
Beck	Principal at maturity	0.00%	—		—			280,000		January 2015		—
Total outstanding principal					190,225,000			113,878,300			$	279,466,052
Debt issuance costs					(424,434)			(364,893)
Unamortized premium					260,241			—
Total mortgage notes and bonds payable, net				$	190,060,807		$	113,513,407

(1) Messrs. Pittman and Hough unconditionally agreed to jointly and severally guarantee $11,000,000.

(2) The book value of collateral as of December 31, 2014 was $1,073,167.

(3) The book value of collateral as of December 31, 2014 was $26,410,132.

(4) The $8,100,000 bond is cross collateralized with the $41,700,000 bond.

(5) Bond is an amortizing loan with monthly principal payments that commenced on October 2, 2015 and monthly interest payments that commenced on July 2, 2015 with all remaining principal and outstanding interest due at maturity.

First Midwest Bank Indebtedness

On April 16, 2014, the Company repaid $6,529,237 of secured mortgage debt and made a partial repayment of the First Midwest Bank debt of $4,749,900 with a portion of the net proceeds from the IPO.  On March 24, 2014, Pittman Hough Farms made a contractual debt payment of $766,000 on the First Midwest Bank debt, which the Company reimbursed on April 16, 2014 with a portion of the net proceeds from the IPO.  The Company did not incur any early termination fees or fees related to the partial repayment.  In conjunction with the repayments, the Company wrote off $26,929 in unamortized debt issuance costs.

On April 16, 2014, the Operating Partnership, as borrower, and First Midwest Bank, as lender, entered into the Amended and Restated Business Loan Agreement (as amended, the “Loan Agreement”), which provides for loans in the aggregate principal amount of approximately $30,780,000. The Company incurred $135,340 in debt issuance costs related to the modification of the loan.  In connection with the Loan Agreement, PH Farms LLC and Cottonwood Valley Land, LLC, which are wholly owned subsidiaries of the Operating Partnership, unconditionally agreed to guarantee all of the obligations of the Operating Partnership

23

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

under the Loan Agreement. In addition, Messrs. Pittman and Hough unconditionally agreed to jointly and severally guarantee $11,000,000 of the Operating Partnership’s obligations under the Loan Agreement.  In conjunction with the modification, other than combining the two First Midwest Bank notes into one master note with two tranches, no other material terms were modified.

On February 24, 2015, the Company amended the Loan Agreement to revise the financial covenants under the Loan Agreement and repaid $3,078,000 of the First Midwest Bank debt.  The Company did not incur any prepayment penalties in conjunction with the repayment.

The collateral for the Company’s indebtedness under the Loan Agreement consists of real estate and related farm rents, including farms, grain facilities and any other improvements present on such real estate.

The Loan Agreement includes standard acceleration clauses triggered by default under certain provisions of the note.

Under the Loan Agreement, the Company is subject to ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including a maximum leverage ratio of 0.60 to 1.00 and a minimum fixed charge coverage ratio of 1.5 to 1.00.  Each covenant is measured annually as of December 31st of each year.  Additionally, the Company is required to maintain a minimum cash account balance of $500,000 during the term of the agreement.   The Company was in compliance with all applicable covenants at September 30, 2015.

Farmer Mac Facility

The Company and the Operating Partnership are parties to a bond purchase agreement (as amended or amended and restated from time to time, the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of Farmer Mac, as bond purchaser (the “Purchaser”), regarding a secured note purchase facility (the “Farmer Mac Facility”) that has a maximum borrowing capacity of $165,000,000.  Pursuant to the Bond Purchase Agreement, the Operating Partnership may, from time to time, issue one or more bonds to the Purchaser that will be secured by pools of mortgage loans, which will, in turn, be secured by first liens on agricultural real estate owned by the Company. The mortgage loans may have effective loan-to-value ratios of up to 60%, after giving effect to the overcollateralization obligations described below.  Prepayment of each bond issuance is not permitted unless otherwise agreed upon by all parties to the Bond Purchase Agreement.

As of September 30, 2015, the Operating Partnership had $163,575,000 outstanding under the Farmer Mac Facility and had $1,425,000 of remaining capacity, subject to availability of qualifying collateral.  As of September 30, 2015, the Operating Partnership had $17,980,500 in real property valued according to the criteria set forth in the agreement with Farmer Mac, which could be collateralized against the Farmer Mac Facility, resulting in $1,425,000 in available borrowing capacity based on an effective loan to value of 60%.

The Operating Partnership’s ability to borrow under the Farmer Mac Facility is subject to the Company’s ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including: a maximum leverage ratio of not more than 60%; a minimum fixed charge coverage ratio of 1.5 to 1.00; and a minimum tangible net worth of $96,312,017. The Company was in compliance with all applicable covenants at September 30, 2015.

In connection with the Bond Purchase Agreement, on August 22, 2014, the Company and the Operating Partnership also entered into a pledge and security agreement (as amended and restated, the “Pledge Agreement”) in favor of the Purchaser and Farmer Mac, pursuant to which the Company and the Operating Partnership agreed to pledge, as collateral for the Farmer Mac Facility, all of their respective right, title and interest in (i) mortgage loans with a value at least equal to 100% of the aggregate principal amount of the outstanding bonds held by the Purchaser and (ii) such additional collateral as necessary to have total collateral with a value at least equal to 110% of the outstanding bonds held by the Purchaser. In addition, the Company agreed to guarantee the full performance of the Operating Partnership’s duties and obligations under the Pledge Agreement.

24

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.

On June 2, 2015, Farmer Mac issued a refund under the bonds issued during 2014 of $300,000.  The refund is being accounted for as a debt premium and is being amortized using the straight-line method over the remaining terms of the underlying bonds issued in 2014.

On July 1, 2015, the Operating Partnership issued a $6,600,000, interest-only bond under the Farmer Mac Facility. The bond has a five-year term and has a fixed interest rate of 3.35%.

Aggregate Maturities

As of September 30, 2015, aggregate maturities of long-term debt for the succeeding years are as follows:

Year Ending December 31,	Future Maturities
Remaining 3 months in 2015	$	3,000,000
2016		31,750,000
2017		81,100,000
2020		48,300,000
Thereafter		26,075,000
	$	190,225,000

Fair Value

FASB ASC 820-10 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

· Level 1—Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

· Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable or can be substantially corroborated for the asset or liability, either directly or indirectly.

· Level 3—Inputs to the valuation methodology are unobservable, supported by little or no market activity and are significant to the fair value measurement.

The fair value of the mortgage notes payable is valued using Level 3 inputs under the hierarchy established by GAAP and is calculated based on a discounted cash flow analysis, using interest rates based on management’s estimates of market interest rates on long-term debt with comparable terms whenever the interest rates on the mortgage notes payable are deemed not to be at market rates. As of September 30, 2015 and December 31, 2014, the fair value of the mortgage notes payable was $190,251,936 and $113,649,531, respectively.

25

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Note 8—Commitments and Contingencies

The Company is not currently subject to any known material contingencies arising from its business operations, nor to any material known or threatened litigation.

In April 2015, FPI Agribusiness entered into a marketing contract to sell 25,000 bushels of corn at $3.98 per bushel, in the fourth quarter of 2015, to protect against the commodity pricing exposure from farming operations.  The contracts are accounted for using the normal purchase and sales exception for hedge accounting.

In April 2015, the Company entered into a lease agreement for office space.  The lease expires July 31, 2019.  The lease commenced June 1, 2015 and has an initial monthly payment of $10,032.  As of September 30, 2015, future minimum lease payments are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	30,098
2016		121,560
2017		123,567
2018		125,574
2019		74,073
	$	474,872

A sale of any of the Contributed Properties that would not provide continued tax deferral to Pittman Hough Farms is contractually restricted until the fifth (with respect to certain properties) or seventh (with respect to certain other properties) anniversary of the completion of the formation transactions. Furthermore, if any such sale or defeasance is foreseeable, the Company is required to notify Pittman Hough Farms and to cooperate with it in considering strategies to defer or mitigate the recognition of gain under the Code by any of the equity interest holders of the recipient of the OP units.

On August 24, 2015, the Company entered into a promissory note agreement with a third-party non-tenant farmer to provide up to $2,000,000 in the form of a term note.  As of September 30, 2015, $1,800,000 has been funded with the remaining $200,000 of funding subject to the satisfaction of customary lending requirements, including finalization and issuance of the title research and appraisal report.

During the third quarter of 2015, the Company entered into purchase agreements with unrelated third-parties to acquire the following farms, which had not closed as of September 30, 2015:

		Total
		approximate
Farm Name	County	acres	Purchase price
Herrmann	Polk, NE	160	$	1,288,000
Mobley	Telfair, GA	1,069		3,698,775
		1,229	$	4,986,775

Subsequent to September 30, 2015, the Company completed the Herrmann and Mobley farm acquisitions for cash. The Company will account for both acquisitions as business combinations.  The initial accounting for the Herrmann and Mobley farms are not yet complete, making certain disclosures unavailable at this time.

26

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Note 9—Stockholders’ Equity and Non-controlling Interests

The following table summarizes the changes in our stockholders’ equity for the nine months ended September 30, 2015:

	Stockholders’ Equity
	Common Stock									Non-controlling
				Additional		Retained		Distributions		Interest in		Total
				Paid-in		Earnings		in Excess of		Operating		Stockholders’
	Shares	Par Value		Capital		(Deficit)		Earnings		Partnership		Equity
Balance at December 31, 2014	7,731,755	$	75,175	$	68,980,437	$	(568,192)	$	(2,130,218)	$	17,168,638	$	83,525,840
Net income	—		—		—		574,503		—		177,980		752,483
Proceeds from underwritten public offering, net of offering costs of $471,189 and underwriters discount of $1,848,000	3,360,000		33,600		34,607,211		—		—		—		34,640,811
Share repurchase and cancellation	(2,130)		(21)		(20,911)		—		—		—		(20,932)
Grant of unvested restricted stock	6,169		—		—		—		—		—		—
Forfeiture of unvested restricted stock	(3,214)		—		(9,773)		—		—		—		(9,773)
Stock based compensation	—		—		718,476		—		—		—		718,476
Dividends accrued or paid	—		—		—		—		(3,530,796)		(1,065,481)		(4,596,277)
Issuance of stock as consideration in real estate acquisition	887,979		8,880		9,747,509		—		—		—		9,756,389
Issuance of OP units as consideration in real estate acquisition	—		—		—		—		—		14,936,987		14,936,987
Adjustment to arrive at redemption value of redeemable non-controlling interest	—		—		(36,053)		—		—		—		(36,053)
Allocation of non-controlling interest in Operating Partnership	—		—		808,995		—		—		(808,995)		—
Balance at September 30, 2015	11,980,559	$	117,634	$	114,795,891	$	6,311	$	(5,661,014)	$	30,409,129	$	139,667,951

On July 21, 2015, the Company completed an underwritten public offering, pursuant to which the Company sold 3,000,000 shares of common stock, and upon the underwriter’s exercise of their over-allotment option, issued an additional 360,000shares at a price per share of $11.00 and generated gross proceeds of $36,960,000.  The aggregate net proceeds to the Company, after deducting the underwriting discount and commissions and expenses payable by the Company, were $34,640,811.

On September 15, 2015, the Company filed a prospectus supplement under which it may sell shares of common stock having an aggregate gross sales price of up to $25,000,000 through an “at-the-market” equity offering program.  The offering is made pursuant to a shelf registration statement on Form S-3 that was declared effective by the Securities and Exchange Commission on May 14, 2015.  As of September 30, 2015, no shares had been issued under the program.

As of September 30, 2015, the Company had16,157,855fully diluted outstanding shares, including OP units, redeemable OP units and restricted shares of common stock.

Non-controlling Interests in Operating Partnership

The Company consolidates its Operating Partnership, a majority owned partnership. As of September 30, 2015, the Company owned 74.1% of the outstanding OP units and the remaining 25.9% of the OP units are included in non-controlling interest in Operating Partnership on the balance sheet.

27

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

On or after 12 months after becoming a holder of OP units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for a cash amount equal to the number of tendered units multiplied by the fair market value of a share of the Company’s common stock (determined in accordance with, and subject to adjustment under, the terms of the partnership agreement of the Operating Partnership), unless the terms of such units or a separate agreement entered into between the Operating Partnership and the holder of such units provide that they do not have a right of redemption or provide for a shorter or longer period before such holder may exercise such right of redemption or impose conditions on the exercise of such right of redemption. On or before the close of business on the tenth business day after the Company receives a notice of redemption, the Company may, as the parent of the general partner, in its sole and absolute discretion, but subject to the restrictions on the ownership of common stock imposed under the Company’s charter and the transfer restrictions and other limitations thereof, elect to acquire some or all of the tendered units in exchange for cash or shares of the Company’s common stock, based on an exchange ratio of one share of common stock for each OP unit (subject to anti-dilution adjustments provided in the partnership agreement).  As of September 30, 2015, there were 1,945,000 outstanding OP units eligible for redemption.

If the Company gives the limited partners notice of its intention to make an extraordinary distribution of cash or property to its stockholders or effect a merger, a sale of all or substantially all of its assets, or any other similar extraordinary transaction, each limited partner may exercise its right to redeem its OP units, regardless of the length of time such limited partner has held its OP units.

Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP units for shares of common stock.  When a unitholder redeems an OP unit, non-controlling interest in the Operating Partnership is reduced and stockholders’ equity is increased.

The Operating Partnership intends to make distributions on each OP unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP units held by the Company being utilized to make distributions to the Company’s common stockholders.

Pursuant to the consolidation accounting standard with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions.  The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent.  Accordingly, as a result of the issuance of stock compensation, common stock and OP units issued as partial consideration for certain acquisitions, which caused changes in the ownership percentages between the Company’s stockholders’ equity and non-controlling interest in the Operating Partnership which occurred during the nine months ended September 30, 2015, the Company has decreased non-controlling interests in the Operating Partnership and increased additional paid in capital by $808,995 during the nine months ended September 30, 2015.

Redeemable Non-controlling Interest in Operating Partnership

On June 2, 2015, the Company issued 1,993,709 OP units in conjunction with an asset acquisition.  Beginning twelve months after issuance, the OP units may be tendered for redemption for cash, or at the Company’s option, into shares of common stock on a one for one basis up to a maximum of 1,109,985 shares of common stock.  The remaining 883,724 OP units (the “Excess Units”) may be redeemed only for cash, unless the Company obtains stockholder approval to redeem such Excess Units with shares of its common stock.

As the tender for redemption of the Excess Units for cash is outside of the control of the Company, these units are accounted for as temporary equity on the combined consolidated balance sheets.  The Company has elected to accrete the change in redemption value subsequent to issuance and during the respective twelve-month holding period, after which point the units will be marked to redemption value at each reporting period.   The Company recorded the initial redemption value of the Excess Units on date of issue as $9,694,452.  The redemption value of the Excess Units at September 30, 2015 was $9,279,102.

28

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

The following table summarizes the changes in our redeemable non-controlling interest in the Operating Partnership for the nine months ended September 30, 2015:

	Redeemable OP units	Redeemable non-controlling interests
Balance at December 31, 2014	—	$	—
Net income	—		53,117
Dividends accrued or paid	—		(225,350)
Issuance of redeemable OP units as partial consideration for asset acquisition	883,724		9,694,452
Adjustment to arrive at redemption value of redeemable non-controlling interest	—		36,053
Balance at September 30, 2015	883,724	$	9,558,272

Distributions

The Company’s Board of Directors declared and paid the following distributions to common stockholders and holders of OP units for the year ended December 31, 2014 and the nine months ended September 30, 2015:

Fiscal Year	Declaration Date	Record Date	Payment Date	Distribution per Common Share/OP unit
2014	May 14, 2014	July 1, 2014	July 15, 2014	$	0.1050
	August 5, 2014	October 1, 2014	October 15, 2014		0.1050
	November 20, 2014	January 2, 2015	January 15, 2015		0.1160
				$	0.3260
2015	February 25, 2015	April 1, 2015	April 15, 2015	$	0.1160
	June 2, 2015	July 1, 2015	July 15, 2015		0.1275
	August 12, 2015	October 1, 2015	October 15, 2015		0.1275
				$	0.3710

In general, common stock cash dividends declared by the Company will be considered ordinary income to stockholders for income tax purposes.  From time to time, a portion of our dividends may be characterized as capital gains or return of capital.

Stock Repurchase Plan

On October 29, 2014, the Company announced that the Board of Directors approved a program to repurchase up to $10,000,000 in shares of the Company’s common stock.  Repurchases under this program may be made from time to time, in amounts and prices as the Company deems appropriate.  Repurchases may be made in open market or privately negotiated transactions in compliance with Rule 10b-18, under the Securities Exchange Act of 1934, subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy, and other relevant factors.  This share repurchase plan does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company's discretion.  The Company expects to fund repurchases under the program using cash on its balance sheet.  The Company repurchased 2,130 shares of its common stock on August 26, 2015, at an average price of $9.81, plus commissions, and are authorized to repurchase up to an additional $9,979,068 of its common stock under the program.

29

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Equity Incentive Plan

On May 5, 2015, the Company’s stockholders approved the Amended and Restated 2014 Equity Incentive Plan (as amended and restated, the “Plan”), which increased the aggregate number of shares of the Company’s common stock reserved for issuance under the Plan to 615,070 shares (including the 217,238 shares of restricted common stock that have been granted to the Company’s executive officers, certain of the Company’s employees, the Company’s non-executive directors and Jesse J. Hough, the Company’s consultant). As of September 30, 2015, there were 397,832 of shares available for future grant under the Plan.

The Company may issue equity-based awards to officers, employees, independent contractors and other eligible persons under the Plan. The Plan provides for the grant of stock options, share awards (including restricted stock and restricted stock units), stock appreciation rights, dividend equivalent rights, performance awards, annual incentive cash awards and other equity based awards, including LTIP units, which are convertible on a one-for-one basis into OP units.  The terms of each grant are determined by the compensation committee of the Board of Directors. 

From time to time, the Company may award non-vested shares under the Plan, as compensation to officers, employees, non-employee directors and non-employee contractors. The shares vest over a period of time as determined by the Compensation Committee of the Board of Directors at the date of grant. The Company recognizes compensation expense for awards issued to officers, employees and non-employee directors for non-vested shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures.  The Company recognizes compensation expense for awards issued to non-employee consultants in the same period and in the same manner as if the Company paid cash for the underlying services.

On February 25, 2015, the Company granted 3,214 restricted shares of common stock, having an aggregate grant date fair value of $35,836, to a newly appointed independent director.  The restricted shares vest ratably over a three-year vesting period, subject to continued service as a director.

On February 25, 2015, 3,214 restricted shares of common stock were forfeited by an independent director who resigned from the Company’s Board of Directors.  The Company had recorded $10,820 in stock based compensation and paid $1,047 in dividends with respect to such restricted shares.  In conjunction with the forfeiture of restricted shares, the Company reversed $9,773 in previously recorded compensation, net of the dividends paid to the director.

On September 14, 2015, the Company granted 2,955 restricted shares of common stock, having an aggregate grant date fair value of $29,993, to an employee. The restricted shares vest ratably over a three-year vesting period, subject to continued employment.

A summary of the non-vested shares as of September 30, 2015 is as follows:

		Weighted
	Number of	average grant
	shares	date fair value
Unvested at January 1, 2015	214,283	$	14.00
Granted	6,169		10.67
Vested	(70,356)		(14.00)
Forfeited	(3,214)		(14.00)
Unvested at September 30, 2015	146,882	$	13.86

For the three and nine months ended September 30, 2015, the Company recognized $228,508 and $708,703, respectively, of stock-based compensation expense related to these restricted stock awards.  For the three and nine months ended September

30

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

30, 2014, the Company recognized $240,981 and $446,460, respectively, of stock-based compensation expense related to these restricted stock awards.  As of September 30, 2015, there was $1,487,654 of total unrecognized compensation costs related to non-vested stock awards which are expected to be recognized over a weighted-average period of 1.6 years.

Earnings per Share

The computation of basic and diluted earnings per share is as follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Numerator:
Net income (loss) attributable to Farmland Partners Inc.	$	623,867	$	27,651	$	574,503	$	(330,632)
Less: Dividends paid on unvested restricted shares		(18,727)		(22,500)		(61,935)		(45,000)
Less: Dividends paid on redeemable non-controlling interest		(112,675)		—		(225,350)		—
Net income (loss) attributable to common stockholders	$	492,465	$	5,151	$	287,218	$	(375,632)
Denominator:
Weighted-average number of common shares - basic and diluted		11,154,127		6,305,253		8,872,279		3,168,803
Unvested restricted shares (1)		4,153		4,331		9,823		—
Redeemable non-controlling interest (2)		—		—		—		—
Weighted-average number of common shares - diluted		11,158,280		6,309,584		8,882,102		3,168,803
Income (loss) per share attributable to common stockholders - basic	$	0.04	$	0.00	$	0.03	$	(0.12)
Income (loss) per share attributable to common stockholders - diluted	$	0.04	$	0.00	$	0.03	$	(0.12)

(1) Anti-dilutive for the nine months ended September 30, 2014.

(2) Anti-dilutive for the three and nine months ended September 30, 2015 and September 30, 2014.

Redeemable non-controlling interest includes 883,724 OP units which are redeemable solely for cash, unless shareholder approval is obtained to redeem for shares of common stock.  The OP units and any unvested restricted shares are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share.

The limited partners’ outstanding OP units (which may be redeemed for shares of common stock) and Excess Units have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested restricted shares (participating securities) have been excluded, as applicable, from net income or loss attributable to common stockholders utilized in the basic and diluted earnings per share calculations. Net income or loss figures are presented net of noncontrolling interests in the earnings per share calculations.  The weighted average number of OP units held by the noncontrolling interest was 3,293,572 and 2,584,098 for the three and nine months ended September 30, 2015, respectively.  The weighted average number of OP units held by the noncontrolling interest was 1,945,000 and 1,189,799 for the three and nine months ended September 30, 2014, respectively.  The weighted average number of Excess Units held by the noncontrolling interest was 883,724 and 388,450 for the three and nine months ended September 30, 2015, respectively.

For the three and nine months ended September 30, 2015 and 2014, diluted weighted average common shares do not include

31

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

the impact of certain unvested compensation-related shares because the effect of these items on diluted earnings per share would be anti-dilutive.  Anti-dilutive compensation-related shares outstanding were 142,729 and 137,059 for the three and nine months ended September 30, 2015, respectively, and 209,952 and 214,283 for the three and nine months ended September 30, 2014.

Note 10—Subsequent Events

See Note 8 for subsequent real estate acquisitions.

Subsequent to September 30, 2015, we entered into purchase agreements with unrelated third parties to acquire the following farms:

		Total
		approximate	Purchase
Farm Name	Location	acres	price
Knowles	Telfair, GA	608	$	1,200,000
Erker Wallace (2 farms)	Wallace, KS & Kit Carson, CO	1,217		1,915,200
Selph	Telfair, GA	116		526,300
Kosch	Butler, NE	80		726,710
Forsythe (120 farms) (2)	(1)	22,300		197,000,000
Howe	McDonough, IL	78		811,861
		24,399	$	202,180,071

(1) The Forsythe farms are located in Edgar, Clark, Coles, Crawford, Douglas, Vermilion & Cumberland counties, IL.

(2) Purchase price is estimated and consists of (a) $50,000,000 in cash, (b) an aggregate of 2,608,695 of OP units and shares of the Company’s common stock to be issued to the seller at closing at a value of $11.50 per OP Unit or share of Common Stock, and (c) 117,000 Series A Preferred units of limited partnership interest in the Operating Partnership, which will be issued at closing.

The above acquisitions are expected to close in the fourth quarter of 2015 and the first quarter of 2016, subject to the satisfaction of certain customary closing conditions.  There can be no assurance that these conditions will be satisfied or that the pending acquisitions will be consummated on the terms described herein, or at all.

On November 6, 2015, the Company amended two leases with its largest tenant to provide the following adjustments to the lease agreements: (i) modify the payment schedule for a prepayment of a portion of future rents for the calendar years 2016-2019, which was originally due in September 2015, and is now due under a revised payment schedule with the final payment due in April 2017, and (ii) to modify the payment schedule for the payment of the remaining calendar year rent due for 2016, which was originally due in December 2015, and is now due under a revised payment schedule with the final payment due in July 2016.  In addition to modifying the payment schedules under the two leases as noted above, we also increased the tenant rent due for the 2016 calendar year, which is included in the modified payment schedules.  

32

Farmland Partners Inc.

Notes to Combined Consolidated Financial Statements (Continued)

(Unaudited)

Adjusting for the impact of the above lease amendments, future minimum lease payments from tenants under all non-cancelable leases in place as of September 30, 2015, including lease advances, when contractually due, but excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues, for the remainder of 2015 and each of the next four years as of September 30, 2015 are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	5,471,084
2016		12,055,346
2017		6,285,216
2018		4,068,190
2019		15,441
	$	27,895,277

Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only.

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Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of our financial condition and results of operationsshould be read in conjunction with our combined consolidated financial statements and the notes included elsewhere in this Quarterly Report, as well as the information contained in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities Exchange Commission (“SEC”) on March 3, 2015 (the “Annual Report”), which is accessible on the SEC’s website at www.sec.gov.  The terms “Company,” “we,” “our” and “us” refer to Farmland Partners Inc. and its consolidated subsidiaries except where the context otherwise requires.

Note Regarding Forward-Looking Statements

We make statements in this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements include, without limitation, statements concerning projections, predictions, expectations, estimates, or forecasts as to our business, financial and operational results, future economic performance, crop yields and prices and future rental rates for our properties, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” or similar expressions or their negatives, as well as statements in future tense, we intend to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements.  Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of our common stock, changes in our business strategy, availability, terms and deployment of capital, availability of qualified personnel, changes in our industry, interest rates or the general economy, the degree and nature of our competition, our ability to identify new acquisitions and close on pending acquisitions, the ability of our tenants to make rental payments to us in accordance with our lease agreements, and the other factors described in the risk factors described in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014 and in other documents that we file from time to time with the SEC. Given these uncertainties, undue reliance should not be placed on such statements.  We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by law.

Overview and Background

We are an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. As of November 9, 2015, we own or have under contract 249 farms in Illinois, Nebraska, Colorado, Arkansas, Louisiana, Kansas, Mississippi, Georgia, South Carolina, North Carolina, Virginia and Michigan totaling approximately 96,822 acres, including two farms totaling 1,229 acres acquired subsequent to September 30, 2015 and 126 farms totaling 24,399 acres under contract.  Our farms are devoted primarily to crops, such as corn, soybeans, wheat, rice and cotton, because we believe primary crop farmland is likely to provide attractive risk-adjusted returns over time through a combination of stable rental income generation and value appreciation.

We were incorporated in Maryland on September 27, 2013, and we are the sole member of the general partner of Farmland Partners Operating Partnership, LP (the “Operating Partnership”), a Delaware limited partnership that was formed on September 27, 2013. All of our assets are held by, and our operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries.  As of September 30, 2015, we owned 74.1% of the units of limited partnership interest (“OP units”) in the Operating Partnership.

We succeeded to the operations of our predecessor, FP Land LLC, a Delaware limited liability company (“FP Land” or our “Predecessor”) upon completion of the underwritten initial public offering of 3,800,000 shares of our common stock (the “IPO”) on April 16, 2014. Concurrently with the completion of the IPO, FP Land merged with and into the Operating

34

Partnership, with the Operating Partnership surviving (the “FP Land Merger”). As a result of the FP Land Merger, the Operating Partnership acquired the 38 farms and three grain storage facilities owned indirectly by our Predecessor and assumed the ownership and operation of our Predecessor’s business.

We have elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with our short taxable year ended December 31, 2014.

Taxable REIT Subsidiary

FPI Agribusiness Inc., our taxable REIT subsidiary (the “TRS” or “FPI Agribusiness”), operates 563 acres of the Company’s farmland in Nebraska.  Additionally, the TRS plans to operate a volume purchasing program for participating tenants by working with suppliers to pool tenant purchasing abilities and create cost savings through bulk orders.

Recent Developments

Completed Acquisitions

Since December 31, 2014, we have completed 20 acquisitions.  The consideration paid in the acquisition of Timmerman, Nebraska Battle Creek farms, Northeast Nebraska farms and Justice farms included 887,979 shares of common stock and 2,232,296 OP units.

		Date	Approximate	Purchase
Acquisitions	County	acquired	acres	price
Swarek	Quitman, MS	1/14/2015	850	$	3,511,919
Stonington Bass	Baca, CO	2/18/2015	997		2,079,000
Benda Butler	Butler, NE	2/24/2015	73		605,799
Benda Polk	Polk, NE	2/24/2015	123		860,998
Timmerman	Phillips, CO	3/13/2015	315		2,026,220
Cypress Bay	Bamberg, SC	3/13/2015	502		2,303,573
Nebraska Battle Creek farms (5 farms)	Madison, NE	4/10/2015	1,117		9,022,595
Northeast Nebraska farms (6 farms)	Pierce, NE	4/10/2015	1,160		8,981,209
Drury	Yuma, CO	4/10/2015	160		950,000
Sutter	Yuma, CO	4/17/2015	322		2,000,056
Bobcat	St. Francis, AR	4/30/2015	934		3,024,750
Swindoll Darby	Tunica, MS	5/14/2015	359		1,468,457
Abraham	Fulton, IL	5/29/2015	110		761,844
Justice farms (8 farms) (1)	(5)	6/2/2015	14,935		80,913,167
Tomasek	McDonough, IL	6/30/2015	58		690,463
Purdy	Crittenden & Mississippi, AR	7/2/2015	1,383		6,167,992
Matthews	Tunica & DeSoto, MS	7/10/2015	1,130		5,576,210
Riccioni	Van Buren, MI	9/15/2015	181		2,557,595
Herrmann	Polk, NE	10/1/2015	160		1,288,000
Mobley	Telfair, GA	10/9/2015	1,069		3,698,775
			25,938	$	138,488,622

(1) The Justice farms are located in Beaufort, Currituck, Pamlico, Pasquotank and Perquimans counties, NC; Marlboro County, SC; and Chesapeake, VA.

35

Properties under Contract

Subsequent to September 30, 2015, we entered into purchase agreements with unrelated third parties to acquire the following farms:

		Total
		approximate	Purchase
Acquisitions	County	acres	price
Knowles	Telfair, GA	608	$	1,200,000
Erker Wallace (2 farms)	Wallace, KS & Kit Carson, CO	1,217		1,915,200
Selph	Telfair, GA	116		526,300
Kosch	Butler, NE	80		726,710
Forsythe (120 farms) (2)	(1)	22,300		197,000,000
Howe	McDonough, IL	78		811,861
		24,399	$	202,180,071

(1) The Forsythe farms are located in Edgar, Clark, Coles, Crawford, Douglas, Vermilion & Cumberland counties, IL.

(2) Purchase price is estimated and consists of (a) $50,000,000 in cash, (b) an aggregate of 2,608,695 of OP units and shares of the Company’s common stock to be issued to the seller at closing at a value of $11.50 per OP Unit or share of Common Stock, and (c) 117,000 Series A Preferred units of limited partnership interest in the Operating Partnership, which will be issued at closing.

The acquisitions are expected to close in the fourth quarter of 2015 and the first quarter of 2016, subject to the satisfaction of certain customary closing conditions.  There can be no assurance that these conditions will be satisfied or that the pending acquisitions will be consummated on the terms described herein, or at all.

Financing Activity

The Company and the Operating Partnership are parties to a bond purchase agreement (as amended or amended and restated from time to time, the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of Farmer Mac, as bond purchaser, regarding a secured note purchase facility (the “Farmer Mac Facility”) that has a maximum borrowing capacity of $165,000,000. As of September 30, 2015, the Company had $163,575,000 outstanding under the Farmer Mac Facility. During the third quarter of 2015, the Company issued one bond totaling $6,600,000 with a five-year term and a fixed interest rate of 3.35%.   See “Liquidity and Capital Resources” for further details regarding the current year issuances.

FPI Loan Program

In August 2015, the Company announced the launch of the FPI Loan Program, an agricultural lending product aimed at farmers, as a complement to the Company's current business of acquiring and owning farmland and leasing it to farmers.  Under the FPI Loan Program, we intend to make loans to third-party farmers (both tenant and non-tenant) to provide partial financing for working capital requirements and operational farming activities, farming infrastructure projects, and for other farming and agricultural real estate related purposes. These notes are expected to be collateralized by farm real estate and are expected to be in principal amounts ranging from $500,000 to $5,000,000 at fixed interest rates and maturities of up to three years. We expect borrowers to repay the notes in accordance with the note agreements based on farming operations and access to other forms of capital, as permitted. 

On August 24, 2015, the Company entered into a promissory note agreement with a third-party non-tenant farmer to provide up to $2,000,000 in the form of a term note.  Currently, $1,800,000 has been funded with the remaining $200,000 of funding subject to the satisfaction of customary lending requirements, including finalization and issuance of the title research and appraisal report.  The note has a fixed interest rate and all principal and accrued interest due at maturity on January 15, 2016. 

36

Factors That May Influence Future Results of Operations and Farmland Values

The principal factors affecting our operating results and the value of our farmland include global demand for food relative to the global supply of food, farmland fundamentals and economic conditions in the markets in which we own farmland, and our ability to increase or maintain rental revenues while controlling expenses. Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland values overall is likely to be short-lived as global demand for food and agricultural commodities typically exceeds global supply. In addition, although prices for many annual crops experienced significant declines in 2014, we do not believe that such declines represent a trend that will continue over the long term. We believe that long-term growth trends in global population, GDP per capita and farmland availability will result in increased prices for primary crops over time.

Demand

We expect that global demand for food, driven primarily by significant increases in the global population and GDP per capita, will continue to be the key driver of farmland values. We further expect that global demand for primary crops will continue to grow to keep pace with global population growth, which we anticipate will lead to either higher prices or higher yields for primary crops and, therefore, higher rental rates on our farmland, as well as sustained growth in farmland values over the long-term. We also believe that growth in global GDP per capita, particularly in developing nations, will contribute significantly to increasing demand for primary crops. As global GDP per capita increases, the composition of daily caloric intake is expected to shift away from the direct consumption of primary crops toward animal-based proteins, which is expected to result in increased demand for primary crops as feed for livestock. According to the United Nations’ Food and Agriculture Organization (“UN FAO”), these factors are expected to require more than one billion additional tons of global annual grain production by 2050, a 45.5% increase from 2005-2007 levels and two-and-a-half times the 423 million tons of grain produced in the United States in 2012.  Furthermore, we believe that, as GDP per capita grows, a significant portion of additional household income is allocated to food and that once individuals increase consumption of, and spending on, higher quality food, they will strongly resist returning to their former dietary habits, resulting in greater inelasticity in the demand for food. As a result, we believe that, as global demand for food increases, rental rates on our farmland and the value of our farmland will increase over the long-term. Global demand for corn and soybeans as inputs in the production of biofuels such as ethanol and soy diesel also could impact the prices of corn and soybeans, which, in the long-term, could impact our rental revenues and our results of operations. However, the success of our business strategy is not dependent on growth in demand for biofuels and we do not believe that demand for corn and soybeans as inputs in the production of biofuels will materially impact our results of operations or the value of our farmland, primarily because we believe that growth in global population and GDP per capita will be more significant drivers of global demand for primary crops over the long-term.

Supply

Global supply of agricultural commodities is driven by two primary factors, the number of tillable acres available for crop production and the productivity of the acres being farmed. Although the amount of global cropland in use has gradually increased over time, growth has plateaued over the last 20 years.  Cropland area continues to increase in developing countries, but after accounting for expected continuing cropland loss, the UN FAO projects only 171 million acres will be added from 2005-2007 to 2050, a 4.3% increase. In comparison, world population is expected to grow over the same period to 9.6 billion, a 38% increase. While we expect growth in the global supply of arable land, we also expect that landowners will only put that land into production if increases in commodity prices and the value of farmland cause landowners to benefit economically from using the land for farming rather than alternative uses. We also believe that decreases in the amount of arable land in the United States and globally as a result of increasing urbanization will partially offset the impact of additional supply of farmland. The global supply of food is also impacted by the productivity per acre of tillable land. Historically, productivity gains (measured by average crop yields) have been driven by advances in seed technology, farm equipment, irrigation techniques and chemical fertilizers and pesticides. Furthermore, we expect the increasing shortage of water in many irrigated growing regions in the United States and other growing regions around the globe, often as a result of new water restrictions imposed by laws or regulations, to lead to decreased productivity growth on many acres and, in some cases, cause yields to decline on those acres.

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Conditions in Our Existing Markets

The market for farmland is dominated by buyers who are existing farm owners and operators. As a result of increasing commodity prices and the relatively low return on alternative investments, farmland values in many agricultural markets have increased in recent years and capitalization rates have decreased. Although farmland prices may show a decline from time to time, we do not expect a major long-term reduction in farmland values, and believe any reduction in land values is likely to be short-lived as global demand for food and agricultural commodities continues to outpace supply. On the other hand, we do not expect farmland values to continue to rise as rapidly as they have in recent years. We believe quality farmland in the United States has a near-zero vacancy rate as a result of the supply and demand fundamentals discussed above. We believe rental rates for farmland are a function of farmland operators’ view of the long-term profitability of farmland, and that many farm operators will continue to compete for farmland even during periods of decreased profitability due to the scarcity of farmland available to rent. In particular, we believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators, in some circumstances, will rent additional acres of farmland when it becomes available in order to allocate their fixed costs over more acres. Furthermore, because it is generally customary in the farming industry to provide the existing tenant with the opportunity to re-lease the land at the end of each lease term, we believe that many farm operators will rent additional land that becomes available in order to control the ability to farm that land in future periods when profitability is higher. As a result, in our experience, many farm operators will aggressively pursue rental opportunities in close proximity to their existing operations when they arise, even when the farmer anticipates lower current returns or short-term losses. In addition, because many farmers both own farmland and rent additional farmland from other landowners, we believe that many farmers will choose to subsidize losses on rented land during periods of lower profitability with relatively higher profits generated by land that they own and that has comparatively lower fixed costs.

Lease Expirations

Farm leases are often short-term in nature.  Our portfolio, as of September 30, 2015, had the following lease expirations as a percentage of approximate acres leased and annual minimum cash rents:

		% of				% of
	Approximate	approximate		Annual		annual
Year Ending December 31,	acres	acres		cash rents		cash rents
2015	12,585	19.4	%	$	2,304,747	15.9	%
2016	24,963	38.6	%		4,721,062	32.6	%
2017	10,879	16.8	%		2,730,429	18.9	%
2018	1,387	2.1	%		319,503	2.2	%
2019	14,935	23.1	%		4,398,433	30.4	%
	64,749	100.0	%	$	14,474,174	100.0	%

We have 5,882 acres which have lease payments based on a percentage of farming revenues and 563 acres that are leased to our taxable REIT subsidiary, which are not included in the table above.  From time to time, we may enter into recreational leases on our farms.  We currently have eight ancillary lease agreements with terms ranging from one to five years.  These leases are not included in the annual minimum cash rents within the above table.  We expect market rents in the coming year to be consistent with expiring rents.  Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future lease expirations during the initial lease term only.

Rental Revenues

Our revenues are generated from renting farmland to operators of farming businesses. Our leases have terms ranging from one to five years.  Although the majority of our leases do not provide the tenant with a contractual right to renew the lease upon its expiration, we believe it is customary to provide the existing tenant with the opportunity to renew the lease, subject to any increase in the rental rate that we may establish. If the tenant elects not to renew the lease at the end of the lease term, the land will be offered to a new tenant.

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The leases for the majority of the properties in our portfolio provide that tenants must pay us 100% of the annual rent in advance of each spring planting season.  As a result, we collect 100% of the annual rent in the first calendar quarter of each year for the majority of the farms in our portfolio.  We believe our use of leases pursuant to which 100% of the annual rent is payable in advance of each spring planting season substantially mitigates the tenant credit risk associated with the variability of farming operations that could be adversely impacted by poor crop yields, weather conditions, mismanagement, undercapitalization or other factors affecting our tenants. Prior to acquiring farmland property, we take into consideration the competitiveness of the local farm-operator tenant environment in order to enhance our ability to quickly replace a tenant that is unwilling to renew a lease or is unable to pay a rent payment when it is due.

Expenses

Substantially all of the leases for our portfolio are structured in such a way that we are responsible for major maintenance, certain insurance and taxes (which are generally reimbursed to us by our tenants), while our tenant is responsible for minor maintenance, water usage and all of the additional input costs related to farming operations on the property, such as seed, fertilizer, labor and fuel. We expect that substantially all of the leases for farmland we acquire in the future will continue to be structured in a manner consistent with substantially all of our existing leases. As the owner of the land, we generally only bear costs related to major capital improvements permanently attached to the property, such as irrigation systems, drainage tile, grain storage facilities, permanent plantings or other physical structures customary for farms. In cases where capital expenditures are necessary, we typically seek to offset, over a period of multiple years, the costs of such capital expenditures by increasing rental rates. We also incur the costs associated with maintaining liability and casualty insurance.

We incur costs associated with running a public company, including, among others, costs associated with employing our personnel and compliance costs. We incur costs associated with due diligence and acquisitions, including, among others, travel expenses, consulting fees (including fees under the consulting agreement with Jesse J. Hough) and legal and accounting fees. We also incur costs associated with managing our farmland. The management of our farmland, generally, is not labor or capital intensive because farmland generally has minimal physical structures that require routine inspection and maintenance, and our leases, generally, are structured to require the tenant to pay many of the costs associated with the property. Furthermore, we believe that our platform is scalable, and we do not expect the expenses associated with managing our portfolio of farmland to increase significantly as the number of farm properties we own increases over time. Rather, we expect that as we continue to add additional farmland to our portfolio, we will be able to achieve economies of scale, which will enable us to reduce our operating costs per acre.

Crop Prices

Our exposure to short-term crop price declines through our leases with related and third party tenants is limited. The lease agreements with some of our tenants provide for a rent determined as a percentage of the farm’s gross proceeds, but even in those cases our downside is generally limited by crop insurance, hedging arrangements or a minimum rent component. In addition, the impact of weaker crop prices is often offset to some extent, by higher crop yields that generally accompany lower crop prices.

Our exposure to short-term crop price fluctuations, related to farming operations, is generally limited by current marketing contracts or other hedging arrangements, which the Company may enter into throughout the growing season.

In April 2015, FPI Agribusiness entered into a marketing contract to sell 25,000 bushels of corn at $3.98 per bushel, in the fourth quarter of 2015 to protect against the commodity pricing exposure from farming operations.  The contract is accounted for using the normal purchase and sales exception for hedge accounting.

The value of a crop is affected by many factors that can differ on a yearly basis. Weather conditions and crop disease in major crop production regions worldwide creates a significant risk of price volatility, which may either increase or decrease the value of the crops that our tenants produce each year. Other material factors adding to the volatility of crop prices are changes in government regulations and policy, fluctuations in global prosperity, fluctuations in foreign trade and export markets and eruptions of military conflicts or civil unrest. While prices for many annual crops experienced declines in 2014 and throughout the first half of 2015, we do not believe these declines represent a trend that will continue

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over the long term.  Rather, we believe that those declines in prices for annual crops represented a correction to historical norms (adjusted for inflation) and that continued long-term growth trends in global population and GDP per capita will result in increased prices for primary crops over time. Although annual rental payments under the majority of our leases are not based expressly on the quality or profitability of our tenants’ harvests, any of these factors could adversely affect our tenants’ ability to meet their obligations to us and our ability to lease or re-lease properties on favorable terms.

Interest Rates

We expect that future changes in interest rates will impact our overall operating performance, by, among other things, increasing our borrowing costs. While we may seek to manage our exposure to future changes in rates through interest rate swap agreements or interest rate caps, portions of our overall outstanding debt will likely remain at floating rates. In addition, a sustained material increase in interest rates may cause farmland prices to decline if the rise in real interest rates (which is defined as nominal interest rates minus the inflation rate) is not accompanied by rises in the general levels of inflation. However, our business model anticipates that the value of our farmland will increase, as it has in the past, at a rate that is equal to or greater than the rate of inflation, which may in part offset the impact of rising interest rates on the value of our farmland, but there can be no guarantee that this appreciation will occur to the extent that we anticipate or at all.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts may differ significantly from these estimates and assumptions. We have provided a summary of our significant accounting policies in the notes to the historical combined consolidated financial statements included elsewhere in this filing. We have set forth below those accounting policies that we believe require material subjective or complex judgments and have the most significant impact on our financial condition and results of operations. We evaluate our estimates, assumptions and judgments on an ongoing basis, based on information that is then available to us, our experience and various matters that we believe are reasonable and appropriate for consideration under the circumstances.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 materially differ from those estimates.

Real Estate Acquisitions

We account for all acquisitions in accordance with the business combinations standard. When we acquire farmland that was previously operated as a rental property, we evaluate whether a lease is in place or a crop is being produced at the time of closing of the acquisition.  If a lease is in place or a crop is being produced at the time of acquisition, we account for the transaction as a business combination and charge the costs associated with the acquisition to acquisition and due diligence costs on the statement of operations as incurred. Otherwise, acquisitions with no lease in place or crops being produced at the time of acquisition are accounted for as asset acquisitions.  When we acquire farmland in a sale-lease back transaction with newly originated leases entered into with the seller, we account for the transaction as an asset acquisition and capitalize the transaction costs incurred in connection with the acquisition.

Upon acquisition of real estate, we allocate the purchase price of the real estate based upon the fair value of the assets and liabilities acquired, which historically have consisted of land, drainage improvements, irrigation improvements, groundwater, permanent plantings (bushes, shrubs, vines, perennials) and grain facilities and may also consist of intangible assets including in-place leases, above market and below market leases and tenant relationships. We allocate the purchase price to the fair value of the tangible assets of acquired real estate by valuing the land as if it were unimproved. We value improvements, including permanent plantings and grain facilities, at replacement cost as new adjusted for depreciation.

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Management’s estimates of land value are made using a comparable sales analysis. Factors considered by management in its analysis include soil types and water availability, the sale prices of comparable farms, and the replacement cost and residual useful life of land improvements. Management’s estimates of groundwater value are made using historical information obtained regarding the applicable aquifer.  Factors considered by management in its analysis of groundwater value are related to the location of the aquifer and whether or not the aquifer is a depletable resource or a replenishing resource.  If the aquifer is a replenishing resource, no value is allocated to the groundwater. 

When above or below market leases are acquired, we value the intangible assets based on the present value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above market leases and the initial term plus the term of any below market fixed rate renewal options for below market leases that are considered bargain renewal options. The above market lease values will be amortized as a reduction of rental income over the remaining term of the respective leases. The fair value of acquired below market leases, included in deferred revenue on the accompanying combined consolidated balance sheets, is amortized as an increase of rental income on a straight-line basis over the remaining non-cancelable terms of the respective leases, plus the terms of any below market fixed rate renewal options that are considered bargain renewal options of the respective leases.

The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired, based on our evaluation of the specific characteristics of each tenant’s lease and its overall relationship with the tenant. The value of in-place lease intangibles and tenant relationships will be included as components of deferred leasing intangibles, and will be amortized over the remaining lease term (and expected renewal periods of the respective leases for tenant relationships) as amortization expense. If a tenant terminates its lease prior to its stated expiration, any unamortized amounts relating to that lease, including (i) above and below market leases, (ii) in-place lease values, and (iii) tenant relationships, would be recorded to revenue or expense as appropriate.

Total consideration for acquisitions may include a combination of cash and equity securities.  When equity securities are issued, we determine the fair value of the equity securities issued based on the number of shares of common stock or OP units issued multiplied by the stock price on the date of closing.

Using information available at the time of acquisition, we allocate the total consideration to tangible assets and liabilities and identified intangible assets and liabilities. We may adjust the preliminary purchase price allocations after obtaining more information about asset valuations and liabilities assumed.

Real Estate

Our real estate consists of land and improvements made to the land consisting of permanent plantings, grain facilities, irrigation improvements, groundwater, other assets and drainage improvements. We record real estate at cost and capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. We expense costs of repairs and maintenance as such costs are incurred. We begin depreciating assets when the asset is ready for its intended use.  We compute depreciation and depletion for assets classified as improvements using the straight-line method over the estimated useful life of 10-40 years for grain facilities, 2-40 years for irrigation improvements, 23 years for permanent plantings, 3-50 years for groundwater, 27-65 years for drainage improvements and 5-40 years for other acquired assets. We periodically evaluate the estimated useful lives for groundwater based on current state water regulations and depletion levels of the aquifers. 

When a sale occurs, we recognize the associated gain when all consideration has been transferred, the sale has closed, and there is no material continuing involvement. If a sale is expected to generate a loss, we first assess it through the impairment evaluation process—see ‘‘Impairment of Real Estate Assets’’ below.

Impairment of Real Estate Assets

We evaluate our tangible and identifiable intangible real estate assets for impairment indicators whenever events such as declines in a property’s operating performance, deteriorating market conditions, or environmental or legal concerns bring recoverability of the carrying value of one or more assets into question. If such events are present, we project the total undiscounted cash flows of the asset, including proceeds from disposition, and compare it to the net book value of

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the asset. If this evaluation indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. There have been no impairments recognized on real estate assets in the accompanying financial statements.

Inventory

The costs of growing crop are accumulated until the time of harvest at the lower of cost or market value and are included in inventory in our combined consolidated financial statements.  Costs are allocated to growing crops based on a percentage of the total costs of production and total operating costs that are attributable to the portion of the crops that remain in inventory at the end of the year.  Growing crop consists primarily of land preparation, cultivation, irrigation and fertilization costs incurred by FPI Agribusiness. Growing crop inventory is charged to cost of products sold when the related crop is harvested and sold. 

Harvested crop inventory includes costs accumulated during the growing phase plus harvesting costs and are stated at the lower of those costs or the estimated net realizable value, which is the market price, based upon the nearest market in the geographic region, less any cost of disposition.  Cost of disposition includes broker’s commissions, freight and other marketing costs.   

Other inventory such as fertilizer and pesticides are valued at the lower of cost or market.

Revenue Recognition

Rental income includes rents that each tenant pays in accordance with the terms of its lease. Minimum rents pursuant to leases are recognized as revenue on a pro rata basis over the lease term.  Deferred revenue includes the cumulative difference between the rental revenue recorded on a straight-line basis and the cash rent received from tenants in accordance with the lease terms.  Acquired below market leases are included in deferred revenue on the accompanying combined consolidated financial statements, which are amortized into rental income over the life of the respective leases.

The leases in the period ended September 30, 2015 had terms ranging from one to five years, 17 of our leases have renewal options and one of our leases has rent escalations. The majority of our leases provide for a fixed cash rent payment.  Tenant leases on acquired farms generally require the tenant to pay us rent for the entire initial year if the acquisition is closed prior to, or shortly after, planting of crops.  If the acquisition is closed later in the year, we may receive a partial rent payment or no rent payment at all.   

Certain of our leases provide for minimum cash rent plus a bonus based on gross farm proceeds.  Revenue under this type of lease is recognized on a straight-line basis over the lease term based on the minimum cash rent.  Bonus rent is recognized upon notification from the tenant of the gross farm proceeds for the year.

Certain of our leases provide for a rent payment determined as a percentage of the gross farm proceeds or a percentage of harvested crops.  Revenue under leases providing for a payment equal to a percentage of the harvested crop or a percentage of the gross farm proceeds is recognized upon notification from the grain facility that grain has been delivered in our name or when the tenant has notified us of the total amount of gross farm proceeds.

Tenant reimbursements include reimbursements for real estate taxes that tenants pay in accordance with the terms of the lease.  Taxes paid by us and their subsequent reimbursement are recognized under property operating expenses as incurred and tenant reimbursements as earned or contractually due, respectively. 

We record revenue from the sale of harvested crops when the harvested crop has been delivered to a grain facility and title has transferred.  Harvested crops delivered under marketing contracts are recorded using the fixed price of the marketing contract at the time of delivery to a grain facility.  Harvested crops delivered without a marketing contract are recorded using the market price at the date the harvested crop is delivered to the grain facility and title has transferred.

The Company recognizes interest income on notes receivable on an accrual basis over the life of the note.  Direct origination costs are netted against loan origination fees and are amortized over the life of the note using the straight-line

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method, which approximates the effective interest method, as an adjustment to interest income which is included in operating revenue as a component of other income in the Company’s Combined Consolidated Statements of Operations for the three and nine months ended September 30, 2015.

Income Taxes

As a REIT, we are permitted to deduct dividends paid to its stockholders, thereby eliminating the U.S. federal taxation of income represented by such distributions at the Company level, provided certain requirements are met. REITs are subject to a number of organizational and operational requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates.

The Operating Partnership leases certain of its farms to the TRS, which is subject to federal and state income taxes.  We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective income tax bases and for operating loss, capital loss and tax credit carryforwards based on enacted income tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.

We perform an annual review for any uncertain tax positions and, if necessary, will record future tax consequences of uncertain tax positions in the financial statements. 

When we acquire a property in a business combination, we evaluate such acquisition for any related deferred tax assets or liabilities and determine if a deferred tax asset or liability should be recorded in conjunction with the purchase price allocation.  If a built-in gain is acquired, we evaluate the required holding period, generally 5-10 years and determine if they have the ability and intent to hold the underlying assets for the necessary holding period.  If we have the ability to hold the underlying assets for the required holding period no deferred tax liability will be recorded with respect to the built-in gain.

New or Revised Accounting Standards Not Yet Effective

In April 2015, the FASB issued ASU No. 2015-03,Simplifying the Presentation of Debt Issuance Costs.  ASU 2015-03 requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge asset. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, butearly adoption is permitted.We elected to early adopt the provisions of ASU 2015-03, as of June 30, 2015. All periods presented have been retroactively adjusted.

In August 2015, the FASB issued ASU No. 2015-15,Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements— Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting which clarified that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement.  We have assessed the impact of ASU 2015-15 and it does not have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-15 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted.

In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, pertaining to entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Any adjustments should be calculated as if the accounting had been completed at the acquisition date. We are currently assessing the impact of ASU 2015-16 and do not expect it to have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-16 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted.

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Results of Operations

Comparison of the three months ended September 30, 2015 to the three months ended September 30, 2014

	For the three months ended September 30,
	2015		2014		$ Change		% Change
OPERATING REVENUES:
Rental income	$	4,047,223	$	1,189,366	$	2,857,857	240.3	%
Tenant reimbursements		104,002		61,283		42,719	69.7	%
Other revenue		17,926		11,405		6,521	57.2	%
Total operating revenues		4,169,151		1,262,054		2,907,097	230.3	%
OPERATING EXPENSES
Depreciation and depletion		237,241		100,208		137,033	136.7	%
Property operating expenses		337,902		65,069		272,833	419.3	%
Acquisition and due diligence costs		111,908		42,602		69,306	162.7	%
General and administrative expenses		1,111,586		645,962		465,624	72.1	%
Legal and accounting		216,090		87,192		128,898	147.8	%
Total operating expenses		2,014,727		941,033		1,073,694	114.1	%
OPERATING INCOME		2,154,424		321,021		1,833,403	571.1	%
OTHER (INCOME) EXPENSE:
Other income		(98,366)		—		(98,366)	N/A
Interest expense		1,390,880		286,216		1,104,664	386.0	%
Total other expense		1,292,514		286,216		1,006,298	351.6	%
Net income before income tax expense		861,910		34,805		827,105	2,376.4	%
Income tax expense		4,400		—		4,400	N/A
NET INCOME	$	857,510	$	34,805	$	822,705	2,363.8	%

Our rental income for the period presented was impacted by the acquisitions completed in the last quarter of 2014 and the first three quarters of 2015. To highlight the effect of changes due to acquisitions, we have separately discussed the rental income for the same-property portfolio, which includes only properties owned and operated for the entirety of both periods presented. The same-property portfolio for the periods presented includes the 38 farms and three grain storage facilities contributed to us by our Predecessor at the time of the IPO and the 16 farms acquired during the second quarter of 2014.

Total rental income increased $2,857,857, or 240.3%, for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014, primarily resulting from the completion of 25 acquisitions in the last quarter of 2014 and 18 during the first three quarters of 2015.  For the three months ended September 30, 2015, the average annual cash rent for the entire portfolio increased to $216 per acre from $184 per acre for the same period in 2014 as a result of diversification of our portfolio.

Cash rental income for the same-property portfolio increased slightly to $1,063,880 for the three months ended September 30, 2015, from $1,061,847 for the three months ended September 30, 2014, as a result of average annual rent for the same-property portfolio remaining relatively flat year over year at $185 per acre. 

In 2014, leases that provide for tenant payment of property taxes required the tenant to reimburse us for the amount we will pay in 2015.  We completed 25 acquisitions in the last quarter of 2014 and 18 during the first three quarters of 2015.  As a result of the portfolio growth, tenant reimbursements increased $42,719 for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014.

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Depreciation and depletion expense increased $137,033, or 136.7%, for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014, as a result of acquiring $7,468,127 in depreciable assets in the last quarter of 2014, $5,033,532 in depreciable assets in the first three quarters of 2015 and investing $6,126,843 in improvements on acquired property in the first three quarters of 2015.

Property operating expenses increased $272,833, or 419.3%, for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014, of which $135,793 is attributable to properties acquired since September 30, 2014.  The increase in property operating expenses is primarily related to an increases in property insurance of $34,140, property taxes of $12,508, repairs of $22,199 and other tenant related expenses of $68,193, as compared to the same period in 2014.

General and administrative expenses increased $465,624, or 72.1%, for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014.  The increase in general and administrative expenses was a result largely of increased costs related to our continued growth following our IPO in 2014. During the three months ended September 30, 2015, our public company costs increased $30,604 due to increased investor relations, regulatory and compliance activity, conference attendance and travel increased $98,513, consulting fees increased $42,985, and other corporate costs increased $9,379 due to increased rent and general office expenses related to increased headcount.  During the three months ended September 30, 2015, employee compensation expenses increased $294,350, as compared with the same period in 2014, due to an increase in our employee headcount from four employees in 2014 to 12 employees as a result of our continued growth, adding of a formal bonus program during the third quarter of 2014 and increasing base compensation for our Chief Executive Officer and Chief Financial Officer in 2015.

Legal and accounting expenses increased $128,898, or 147.8%, for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014, primarily as a result of increased costs related to being a public company, general corporate matters and the growth of our portfolio.

Other income increased $98,366 for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014, due to the execution of easement and right-of-way agreements.

Interest expense increased by $1,104,664, or 386.0%, for the three months ended September 30, 2015, as compared to the three months ended September 30, 2014, as a result of an increase in our average outstanding borrowings during the quarter, which were $190,153,261 during the three months ended September 30, 2015 and $36,379,000 for the comparative period in 2014.  Our weighted average cost of borrowings during the three months ended September 30, 2015 and 2014 was 2.86% and 2.74%, respectively.  We also recognized additional interest expense of $56,955 and $32,260 during the three months ended September 30, 2015 and 2014, respectively, related to the amortization of deferred loan fees.  These increases were partially offset by the amortization of a premium on our debt of $30,230 during the three months ended September 30, 2015. 

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Comparison of the nine months ended September 30, 2015 to the nine months ended September 30, 2014

	For the nine months ended September 30,
	2015		2014		$ Change		% Change
OPERATING REVENUES:
Rental income	$	8,865,534	$	2,526,185	$	6,339,349	250.9	%
Tenant reimbursements		272,902		188,910		83,992	44.5	%
Other revenue		17,926		19,008		(1,082)	(5.7)	%
Total operating revenues		9,156,362		2,734,103		6,422,259	234.9	%
OPERATING EXPENSES
Depreciation and depletion		613,381		209,472		403,909	192.8	%
Property operating expenses		797,525		174,598		622,927	356.8	%
Acquisition and due diligence costs		179,468		103,525		75,943	73.4	%
General and administrative expenses		2,975,628		1,466,263		1,509,365	102.9	%
Legal and accounting		646,632		243,192		403,440	165.9	%
Total operating expenses		5,212,634		2,197,050		3,015,584	137.3	%
OPERATING INCOME		3,943,728		537,053		3,406,675	634.3	%
OTHER (INCOME) EXPENSE:
Other income		(98,366)		—		(98,366)	N/A
Interest expense		3,232,094		909,326		2,322,768	255.4	%
Total other expense		3,133,728		909,326		2,224,402	244.6	%
Net income (loss) before income tax expense		810,000		(372,273)		1,182,273	317.6	%
Income tax expense		4,400		—		4,400	N/A
NET INCOME (LOSS)	$	805,600	$	(372,273)	$	1,177,873	316.4	%

Our rental income for the period presented was impacted by 18 acquisitions made during the first three quarters of 2015 and 25 acquisitions completed in the fourth quarter of 2014. To highlight the effect of changes due to acquisitions, we have separately discussed the rental income for the same-property portfolio, which includes only properties owned and operated for the entirety of the both periods presented. The same-property portfolio for the periods presented includes the 38 farms and three grain storage facilities contributed to us by our Predecessor at the time of the IPO.

Total rental income increased $6,339,349, or 250.9%, for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, primarily resulting from the completion of 43 acquisitions during the fourth quarter of 2014 and the first three quarters of 2015. For the nine months ended September 30, 2015, the average annual cash rent for the entire portfolio increased to $216 per acre from $184 per acre for the same period in 2014 as a result of diversification of our portfolio to markets characterized by lower farmland purchase prices and rents per acre.

Cash rental income for the same-property portfolio increased to $1,982,004 for the nine months ended September 30, 2015, from $1,975,898 for the nine months ended September 30, 2014, as a result of average annual rent for the same-property portfolio increasing to $361 per acre for the nine months ended September 30, 2015 from $360 per acre for the same period in 2014.  The increase is a result of an increase in the average annual rent of $4 per acre for 14 farms totaling 2,097 acres whose respective leases expired at the end of 2014.

In 2014, leases that provide for tenant payment of property taxes required the tenant to reimburse us for the amount we will pay in 2015.  We completed 43 acquisitions during the last quarter of 2014 and the first three quarters of 2015.  As a result of the portfolio growth, tenant reimbursements increased $83,992 for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014.

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Depreciation and depletion expense increased $403,909, or 192.8%, for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, as a result of acquiring $7,468,127 in depreciable assets in the last quarter of 2014, $5,033,532 in depreciable assets in the first three quarters of 2015 and investing $6,126,843 in improvements on acquired property in the first three quarters of 2015.

Property operating expenses increased $622,927, or 356.8%, for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, of which $294,650 is attributable to acquired properties since September 30, 2014.  The remaining increase in property operating expenses is primarily related to increases in property insurance of $75,743, property taxes of $48,453, repairs of $43,485 and other tenant related expenses of $160,595, as compared to the same period in 2014.

General and administrative expenses increased $1,509,365, or 102.9%, for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014.  The increase in general and administrative expenses was a result largely of increased costs related to being a public company and our continued growth following our IPO in 2014. During the nine months ended September 30, 2015, our public company costs increased $195,941 due to increased investor relations, board, regulatory and compliance activity, stock based compensation increased $200,683, conference attendance and travel increased $184,001, consulting fees increased $171,060, and other corporate costs increased $34,359, due to increased rent and general office expenses related to increased headcount, as compared with the same period in 2014.  During the nine months ended September 30, 2015, employee compensation expenses increased $942,919 as compared with the same period in 2014, as we did not have any employees prior to the IPO and have since increased our staffing to 12 employees and added a formal bonus program in the third quarter of 2014. These increases were offset by $219,597 in professional fees which were incurred during the nine months ended September 30, 2014, on behalf of the Company by Pittman Hough Farms prior to the completion of the IPO.

Legal and accounting expenses increased $403,440, or 165.9%, for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, primarily as a result of being a public company, general corporate matters and growth of our portfolio.

Other income increased $98,366 for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, due to the execution of easement and right-of-way agreements.

Interest expense increased by $2,322,768, or 255.4%, for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, as a result of an increase in our average outstanding borrowings, which were $150,361,912 during the nine months ended September 30, 2015 and $37,362,639 for the comparative nine months of 2014.  Our weighted average cost of borrowings during the nine months ended September 30, 2015 and 2014 was 2.76% and 2.86%, respectively.  We also recognized additional interest expense of $168,162 and $97,987 during the nine months ended September 30, 2015 and 2014, respectively, related to the amortization of deferred loan fees.  These increases were partially offset by the amortization of a premium on our debt of $39,759 during the nine months ended September 30, 2015.   

Liquidity and Capital Resources

Overview

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay any outstanding borrowings, fund and maintain our assets and operations, make distributions to our stockholders and to the holders of OP units, and other general business needs.

Our short-term liquidity requirements consist primarily of funds necessary to acquire additional farmland and make other investments consistent with our investment strategy, make principal and interest payments on outstanding borrowings, make distributions necessary to qualify for taxation as a REIT and fund our operations. Our sources of cash primarily will be operating cash flows and borrowings, including borrowings under the Farmer Mac Facility.

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We intend to utilize the Farmer Mac Facility, which has a maximum borrowing capacity of $165,000,000, to help fund future acquisitions.  As of September 30, 2015, we had $163,575,000 outstanding under the Farmer Mac Facility and had $1,425,000 of remaining capacity, subject to availability of qualifying collateral.  As of September 30, 2015, we had $17,980,500 in real property valued according to the criteria set forth in the agreement with Farmer Mac which could be collateralized against the Farmer Mac Facility, resulting in $1,425,000 in available borrowing capacity based on an effective loan to value of 60%.

Over the next twelve months, $34,750,000 of our borrowings will mature.  To satisfy our maturing debt obligations, we intend to utilize a combination of our expected cash flow from operations, a portion of the net proceeds from our recent underwritten public equity offering and proceeds from debt refinancings with Farmer Mac or other current or prospective lenders.

In the near term, we intend to request an increase in our maximum borrowing capacity under the Farmer Mac Facility; however, we can provide no assurances that Farmer Mac will agree to increase our borrowing capacity or that we will be able to obtain alternative sources of financing necessary to fund our near-term debt maturities.  Any cash that we use to satisfy our outstanding debt obligations will reduce the amounts available to acquire additional farms, which could adversely affect our growth prospects.

In addition to utilizing current and any future available borrowings, if any, under the Farmer Mac Facility, we entered into equity distribution agreements on September 15, 2015, under which we may issue and sell from time to time, through the sales agents, shares of common stock having an aggregate gross sales price of up to $25,000,000.  This “at-the-market” equity offering program is intended to provide additional financing alternatives in the capital markets and we intend to use the net proceeds from the offering, if any, for future farmland acquisitions in accordance with our investment strategy and for general corporate purposes, which may also include originating loans to farmers under our recently announced loan program.

Our long-term liquidity needs consist primarily of funds necessary to acquire additional farmland, make other investments and certain long-term capital expenditures, make principal and interest payments on outstanding borrowings, and make distributions necessary to qualify for taxation as a REIT. We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances (including issuances of OP units), net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings, including borrowings under the Farmer Mac Facility.

Our ability to incur additional debt will depend on a number of factors, including our degree of leverage, the value of our unencumbered assets, borrowing restrictions that may be imposed by lenders and the conditions of debt markets. Our ability to access the equity capital markets will depend on a number of factors as well, including general market conditions for REITs and market perceptions about our company.

Consolidated Indebtedness

Multi-Property Loan

In connection with the IPO and our formation transactions, on April 16, 2014, the Operating Partnership, as borrower, and First Midwest Bank, as lender, entered into the Amended and Restated Business Loan Agreement (the “Loan Agreement”), which provided for loans in the initial aggregate principal amount of approximately $30,780,000 (together, the “Multi-Property Loan”). The Multi-Property Loan is secured by first mortgages and assignments of rents encumbering 24 of our farms and two of our grain storage facilities. As of September 30, 2015, we had $26,650,000 outstanding under the multi-property loan.

The Multi-Property Loan has a maturity date of March 6, 2016, with respect to $26,000,000 of thecurrently outstanding principal of theloan, and June 28, 2016, with respect to the balance.  The loan bears interest at a rate per annum equal to the one-month LIBOR plus 2.59%, but in any event not less than a rate per annum of 2.80%, and requires us to make quarterly interest payments on the 30th day of each calendar quarter and principal payments of $1,000,000 on March 6, 2016, and $26,000 on June 16, 2016.

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The Multi-Property Loan may be prepaid by us in whole or in part without any prepayment penalties unless we prepay the Multi-Property Loan with proceeds from a loan with a financial institution other than the current lender under the Multi-Property Loan or its affiliates, in which case the lender is entitled to a prepayment premium equal to approximately 1.0% of the amount by which such aggregate amount of principal prepayment exceeds 10% of the total principal balance under the loan. The Multi-Property Loan contains customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loans, defaults in payments under any other documents covering any part of the properties, and bankruptcy or other insolvency events.

In connection with the Loan Agreement, two wholly owned subsidiaries of the Operating Partnership unconditionally agreed to guarantee all of the obligations of the Operating Partnership under the Loan Agreement. In addition, Paul A. Pittman, our Executive Chairman, President and Chief Executive Officer, and Jesse J. Hough, our consultant, unconditionally agreed to jointly and severally guarantee $11,000,000 of the Operating Partnership’s obligations under the Loan Agreement.  On February 24, 2015, we amended the Loan Agreement to revise the financial covenants.

Under the Loan Agreement, we are subject to ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including a maximum leverage ratio of 0.60 to 1.00 and a minimum fixed charge coverage ratio of 1.5 to 1.00.  Each covenant is measured annually as of December 31st of each year.  Additionally, we are required to maintain a minimum cash account balance of $500,000 during the term of the agreement.  We were in compliance with all applicable covenants at September 30, 2015.  

Farmer Mac Facility

We entered into the Bond Purchase Agreement with Farmer Mac and Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of Farmer Mac, as bond purchaser (the “Purchaser”), regarding a secured bond purchase facility that has a maximum borrowing capacity of $165,000,000. Pursuant to the Bond Purchase Agreement, the Operating Partnership may, from time to time, issue one or more bonds to the Purchaser that will be secured by pools of mortgage loans, which will, in turn, be secured by first liens on agricultural real estate owned by us. The mortgage loans may have effective loan-to-value ratios of up to 60%, after giving effect to the overcollateralization obligations described below. Prepayment of each bond issuance is not permitted unless otherwise agreed upon by all parties to the Bond Purchase Agreement.

The Operating Partnership’s ability to borrow under the Farmer Mac Facility is subject to our ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including: a maximum leverage ratio of not more than 60%; a minimum fixed charge coverage ratio of 1.5 to 1.00, beginning after the second quarter of 2015; and a minimum tangible net worth. We were in compliance with all applicable covenants at September 30, 2015. On August 3, 2015, we amended the Bond Purchase Agreement in order to calculate the fixed charge coverage ratio using our Adjusted EBITDA (as defined in the Bond Purchase Agreement) rather than our EBITDA (as defined in the Bond Purchase Agreement).

In connection with the Bond Purchase Agreement, on August 22, 2014, we and the Operating Partnership also entered into a pledge and security agreement (as amended and restated, the “Pledge Agreement”) in favor of the Purchaser and Farmer Mac, pursuant to which we and the Operating Partnership agreed to pledge, as collateral for the Farmer Mac Facility, all of their respective right, title and interest in (i) mortgage loans with a value at least equal to 100% of the aggregate principal amount of the outstanding bond held by the Purchaser and (ii) such additional collateral as necessary to have total collateral with a value at least equal to 110% of the outstanding notes held by the Purchaser. In addition, we agreed to guarantee the full performance of the Operating Partnership’s duties and obligations under the Pledge Agreement.

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.  As of September 30, 2015, we had $163,575,000 outstanding under the Farmer Mac Facility.

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Sources and Uses of Cash

The following table summarizes our cash flows for the nine months ended September 30, 2015 and 2014:

	For the nine months ended September 30,
	2015		2014
Net cash provided by operating activities	$	8,653,715	$	1,666,084
Net cash used in investing activities	$	(107,035,576)	$	(36,937,784)
Net cash provided by financing activities	$	107,150,209	$	99,001,664

Comparison of the nine months ended September 30, 2015 to the nine months ended September 30, 2014

As of September 30, 2015, we had $42,504,514 of cash and cash equivalents compared to $63,747,769 at September 30, 2014.

Cash Flows from Operating Activities

Net cash provided by operating activities increased $6,987,631, primarily as a result of the following:

· Receipt of $14,047,744 in cash rents for the nine months ended September 30, 2015, as compared to receiving $4,229,511 in cash rents in the nine months ended September 30, 2014;

· Receipt of a $250,000 refund during the first quarter of 2015 of a deposit made during the fourth quarter of 2014;

· Increase of $692,628 in employee compensation paid;

· Increase of $570,635 on property operating costs;

· Additional operating costs of $858,380 directly related to becoming a public company; and

· An increase in cash paid for interest of $1,033,764 for the nine months ended September 30, 2015, as compared to the nine months ended September 30, 2014, as a result of the timing of interest payments on indebtedness, an increase in outstanding indebtedness of $142,875,000, the payoff of $12,311,237 of outstanding indebtedness in 2014 and the repayment of $4,104,000 in outstanding indebtedness in the first quarter of 2015.

Cash Flows from Investing Activities

Net cash used for investing activities increased $70,097,792 primarily as a result of the following:

· Completing 18 acquisitions in 2015 for aggregate cash consideration of $98,910,034, as compared to $36,891,656 in aggregate cash consideration for four acquisitions in 2014;

· Investment of $6,347,542 for real estate improvements during the nine months ended September 30, 2015, as compared to $46,128 in 2014;

· During the third quarter of 2015, the Company announced the FPI Loan Program and originated the first loan for $2,000,000, of which $1,800,000 has been funded to date.  In connection with the issuance of the note, we received $40,000 of direct loan origination fees and paid direct costs of $18,000 associated with issuance during the third quarter of 2015. 

Cash Flows from Financing Activities

Net cash used in financing activities increased $8,148,545 primarily as a result of the following:

· Borrowings from mortgage notes payable of $82,475,000 during the nine months ended September 30, 2015, as compared to borrowings of $20,700,000 in the nine months ended September 30, 2014;

· Debt prepayments of $3,078,000 on the First Midwest bank debt during the nine months ended September 30, 2015, as compared to $11,279,137 in the nine months ended September 30, 2014;  

· Other contractual debt payments of $3,050,300 made during the nine months ended September 30, 2015, compared to $1,032,100 in contractual debt payments made during the nine months ended September 30, 2014;

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· Proceeds from an equity offering of $35,112,000 during the nine months ended September 30, 2015, compared to total proceeds of $93,620,980 from an initial public offering and subsequent equity offering during the nine months ended September 30, 2014;

· Dividend and distribution payments of $3,884,004 to common stockholders and OP unitholders made during the nine months ended September 30, 2015, compared to dividends payments and net distributions to members of $535,975 during the nine months ended September 30, 2014;

· Payments of $479,852 in offering costs made during the nine months ended September 30, 2015, as compared to $2,255,090 in payments during the nine months ended September 30, 2014;

· Payments of $223,703 in financing fees made during the nine months ended September 30, 2015, as compared to $216,014 in payments during the nine months ended September 30, 2014;

· Receipt of $300,000 of refund related to certain of our mortgage notes payable during the nine months ended September 30, 2015;

· Repurchase and cancellation of $20,932 of common stock during the nine months ended September 30, 2015.

Off-Balance Sheet Arrangements

As of September 30, 2015, we did not have any off-balance sheet arrangements.

Non-GAAP Financial Measures

Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), and after adjustments for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure. Management presents FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from sales of depreciable operating properties, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs.

However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures necessary to maintain the operating performance of improvements on our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

We do not, however, believe that FFO is the only measure of the sustainability of our operating performance.  Changes in GAAP accounting and reporting rules that were put in effect after the establishment of NAREIT’s definition of FFO result in the inclusion of a number of items in FFO that do not correlate with the sustainability of our operating performance.  Therefore, in addition to FFO, we present AFFO and AFFO per share, fully diluted, both of which are non-GAAP measures.  Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company’s operational performance than FFO.  AFFO is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance.  Even AFFO, however, does not properly capture the timing of cash receipts, especially in connection with full-year rent payments under lease agreements entered into in connection with newly acquired farms.  Management considers AFFO per share, fully diluted to be a supplemental metric to GAAP earnings per share.  AFFO per share, fully diluted provides additional insight into

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how our operating performance could be allocated to potential shares outstanding at a specific point in time.  Management believes that AFFO is a widely recognized measure of the operations of REITs, and presenting AFFO will enable investors to assess our performance in comparison to other REITs.  However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted and, accordingly, our AFFO and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO per share amounts calculated by other REITs.  AFFO and AFFO per share, fully diluted should not be considered as an alternative to net income (loss) or earnings per share (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to net income (loss) earnings per share (determined in accordance with GAAP) as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make distributions.

AFFO is calculated by adjusting FFO to exclude or include the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below:

· Crop year adjusted revenue.  In accordance with GAAP, rental payments are recognized as income on a straight-line basis over the terms of the respective leases.  With respect to leases entered into on acquired property, crop year adjusted revenue represents the difference between the pro rata contractual cash revenue for each crop year spread equally over the quarterly periods of ownership (without regard to the date of acquisition within the quarter) and the rent recognized on a straight-line basis in accordance with GAAP.  This application results in income recognition that can differ significantly from the current GAAP accounting.  By adjusting for this item, we believe AFFO, provides useful supplemental information reflective of the realized economic impact of our leases on a crop year basis, which is useful in assessing the sustainability of our operating performance.

· Real estate related acquisition audit fees.  A portion of the audit fees we incur is directly related to acquisitions, and varies with the number and complexity of the acquisitions we evaluate and complete in a given period.  As such, these costs do not correlate with the ongoing operations of our portfolio.  We believe that excluding these costs from AFFO provides useful supplemental information reflective of the realized economic impact of our current acquisition strategy, which is useful in assessing the sustainability of our operating performance.  This exclusion also improves comparability of our results over each reporting period.

· Real estate related acquisition and due diligence costs.  Acquisition expenses are incurred for investment purposes and therefore, do not correlate with the ongoing operations of our portfolio.  We believe that excluding these costs from AFFO provides useful supplemental information reflective of the realized economic impact of our leases, which is useful in assessing the sustainability of our operating performance.  This exclusion also improves comparability of our results over each reporting period and of our company with other real estate operators.

· Stock based compensation.  Stock based compensation is a non-cash expense and therefore, does not correlate with the ongoing operations.  We believe that excluding these costs from AFFO improves comparability of our results over each reporting period and of our company with other real estate operators. 

· Indirect offering costs.  Indirect offering costs are fees for services incurred by the Company to grow and maintain an active institutional investor presence.  As we continue to acquire more farms and farmland, our ability to access capital through the equity markets will remain a critical component of our growth strategy.  As of September 30, 2015, we began excluding indirect offering costs from AFFO as we believe it improves comparability of our results over each reporting period and of our company with other real estate operators. 

· Common shares fully diluted.  In accordance with GAAP, common shares used to calculate earnings per share are presented on a weighted average basis.  Common shares on a fully diluted basis includes shares of common stock , OP units, redeemable OP units and unvested restricted stock outstanding at the end of the period on a share equivalent basis, because all shares are participating securities and thus share in the performance of the Company.

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The following table sets forth a reconciliation of net income (loss) to FFO, AFFO and net income (loss) available to common stockholders per share to AFFO per share, fully diluted, the most directly comparable GAAP equivalents, respectively, for the periods indicated below (unaudited):

	For the three months ended September 30,				For the nine months ended September 30,
	2015		2014		2015		2014
Net income (loss)	$	857,510	$	34,805	$	805,600	$	(372,273)
Depreciation and depletion		237,241		100,208		613,381		209,472
FFO		1,094,751		135,013		1,418,981		(162,801)
Crop year adjusted revenue		295,298		59,142		1,466,493		531,646
Stock based compensation		228,508		240,981		708,703		446,460
Indirect equity offering costs		10,000		—		10,000		—
Real estate acquisition related audit fees		17,000		—		87,000		25,000
Real estate related acquisition and due diligence costs		111,908		42,602		179,468		103,525
AFFO	$	1,757,465	$	477,738	$	3,870,645	$	943,830
AFFO per diluted weighted average share data:
AFFO weighted average common shares		15,475,864		8,464,536		12,016,245		4,489,745
Net loss available to common stockholders	$	0.04	$	—	$	0.03	$	(0.12)
Income available to redeemable non-controlling interest and non-controlling interest in operating partnership		0.01		—		0.04		0.03
Depreciation and depletion		0.02		0.01		0.05		0.05
Crop year adjusted revenue		0.02		0.01		0.12		0.12
Stock based compensation		0.01		0.03		0.06		0.10
Indirect equity offering costs		—		—		—		—
Real estate acquisition related audit fees		—		—		0.01		0.01
Real estate related acquisition and due diligence costs		0.01		0.01		0.01		0.02
AFFO per diluted weighted average share	$	0.11	$	0.06	$	0.32	$	0.21

The following table sets forth a reconciliation of AFFO share information to basic weighted average common shares outstanding, the most directly comparable GAAP equivalent, for the periods indicated below (unaudited):

	For the three months ended September 30,		For the nine months ended September 30,
	2015	2014	2015	2014
Basic weighted average shares outstanding	11,154,127	6,305,253	8,872,279	3,168,803
Weighted average OP units on an as if converted basis	3,293,572	1,945,000	2,584,098	1,189,799
Weighted average unvested restricted stock	144,441	214,283	171,418	131,143
Weighted average redeemable non-controlling interest	883,724	—	388,450	—
AFFO weighted average common shares	15,475,864	8,464,536	12,016,245	4,489,745

As of September 30, 2015, the Company had 16,157,855 shares of common stock outstanding on a fully diluted basis.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA

EBITDA is a key financial measure used to evaluate our operating performance but should not be construed as an alternative to operating income, cash flows from operating activities or net income, in each case as determined in accordance with GAAP. EBITDA is not a measure defined in accordance with GAAP. We believe that EBITDA is a standard performance measure commonly reported and widely used by analysts and investors in our industry. However,

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while EBITDA is a performance measure widely used across several industries, we do not believe that it correctly captures our business operating performance because it includes non-cash expenses and recurring adjustments that are necessary to better understand our business operating performance.  Therefore, in addition to EBITDA, our management uses Adjusted EBITDA, a non-GAAP measure.  A reconciliation of net income to EBITDA and Adjusted EBITDA is set forth in the table below.

We further adjust EBITDA for certain additional items such as crop year adjusted revenue, stock based compensation, indirect offering costs, real estate acquisition related audit fees and real estate related acquisition and due diligence costs (for a full discussion of these adjustments see AFFO adjustments discussed above) that we consider necessary to understand our operating performance.  As of September 30, 2015, we began excluding indirect offering costs from EBITDA as we believe it improves comparability of our results over each reporting period and of our company with other real estate operators.  We believe that Adjusted EBITDA provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and EBITDA, is beneficial to an investor’s understanding of our operating performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

· EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

· EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

· EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

· Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for these replacements; and

· Other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting the usefulness as a comparative measure.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results of operations and using EBITDA and Adjusted EBITDA only as a supplemental measure of our performance.

The following table sets forth a reconciliation of our net income (loss) to our EBITDA and Adjusted EBITDA for the periods indicated below (unaudited):

	For the three months ended September 30,				For the nine months ended September 30,
	2015		2014		2015		2014
Net income (loss)	$	857,510	$	34,805	$	805,600	$	(372,273)
Interest expense		1,390,880		286,216		3,232,094		909,326
Income tax expense		4,400		—		4,400		—
Depreciation and depletion		237,241		100,208		613,381		209,472
EBITDA	$	2,490,031	$	421,229	$	4,655,475	$	746,525
Crop year adjusted revenue		295,298		59,142		1,466,493		531,646
Stock based compensation		228,508		240,981		708,703		446,460
Indirect equity offering costs		10,000		—		10,000		—
Real estate acquisition related audit fees		17,000		—		87,000		25,000
Real estate related acquisition and due diligence costs		111,908		42,602		179,468		103,525
Adjusted EBITDA	$	3,152,745	$	763,954	$	7,107,139	$	1,853,156

54

Inflation

Leases for the farmland in our portfolio have one- to five-year terms, pursuant to which each tenant typically is responsible for substantially all of the operating expenses related to the property, including taxes, maintenance, water usage and insurance. As a result, we believe that the effect on us of inflationary increases in operating expenses may be offset in part by the operating expenses that are passed through to our tenants and by contractual rent increases because our leases will be renegotiated every one to five years. We do not believe that inflation has had a material impact on our historical financial position or results of operations.

Seasonality

Because the leases for the majority of the properties in our portfolio require payment of 100% of the annual rent in advance of each spring planting season, we expect to receive the majority of our cash rental payments in the first calendar quarter of each year, although we will recognize rental revenue from these leases on a pro rata basis over the non-cancellable term of the lease in accordance with GAAP.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market-sensitive instruments. In pursuing our business strategies, the primary market risk to which we are exposed is interest rate risk. Our primary interest rate exposure will be the daily LIBOR. We may use fixed interest rate financing to manage our exposure to fluctuations in interest rates. On a limited basis, we also may use derivative financial instruments to manage interest rate risk. We will not use such derivatives for trading or other speculative purposes.

At September 30, 2015, approximately $34,750,000, or 18.3%, of our debt had variable interest rates. Assuming no increase in the level of our variable rate debt, if interest rates increased by 1.0%, or 100 basis points, our cash flow would decrease by approximately $347,500 per year. At September 30, 2015, LIBOR was approximately 20 basis points. Assuming no increase in the level of our variable rate debt, if LIBOR were reduced to 0 basis points, our cash flow would not be impacted.

Item 4.Controls and Procedures.

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, management has evaluated, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.Legal Proceedings.

The nature of our business exposes our properties, us and the Operating Partnership to the risk of claims and litigation in the normal course of business. We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us.

55

Item 1A.Risk Factors.

As of September 30, 2015, There have been no material changes from the risk factors previously disclosed in response to “Part I - Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014.

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

Issuer Purchases of Equity Securities

Share Repurchase Program

On October 29, 2014, our Board of Directors approved a program to repurchase up to $10,000,000 in shares of our common stock. Repurchases under this program may be made from time to time, in amounts and prices as we deem appropriate.  Repurchases may be made in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, subject to market conditions, applicable legal requirements, trading restrictions under the our insider trading policy, and other relevant factors. This share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be modified or suspended at any time at our discretion. We expect to fund repurchases under the program using cash on its balance sheet. Our repurchase activity for the three months ended September 30, 2015 under the share repurchase program is presented in the following table.

				Total Number	Approximate
				of Shares	Dollar Value of
				Purchased as	Shares that May
				Part of	Yet Be
				Publically	Purchased
		Average		Announced	Under the Share
	TotalShares	Price Paid		Plans or	Repurchase
	Purchased	per Share		Programs	Program
July 1, 2015 - July 31, 2015	—	$	—	—	$	10,000,000
August 1, 2015 - August 31, 2015	2,130		9.81	2,130		9,979,068
September 1, 2015 - September 30, 2015	—		—	—		9,979,068
Total	2,130	$	9.81	2,130	$	9,979,068

Item 3.Defaults Upon Senior Securities.

None.

Item 4.Mine Safety Disclosures.

Not applicable.

Item 5.Other information.

None.

Item 6.Exhibits.

The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference (as stated therein) as part of this Quarterly Report on Form 10-Q.

56

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Farmland Partners Inc.
Dated: November 12, 2015	/s/ Paul A. Pittman
	Paul A. Pittman
	Executive Chairman, President and Chief Executive Officer
	(Principal Executive Officer)
Dated: November 12, 2015	/s/ Luca Fabbri
	Luca Fabbri
	Chief Financial Officer, Secretary and Treasurer
	(Principal Financial and Accounting Officer)

57

Exhibit Index

Exhibit Number	Description of Exhibit
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*

*    Filed herewith

58

EX-31.1

Exhibit31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul A. Pittman, certify that:

1.I have reviewed this Quarterly Report on Form10-Q of Farmland Partners Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e)and 15d-15(e)) [Language omitted in accordance with SEC Release Nos. 34-47986 and 34-54942] for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.[Language omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Ay
Date: November 12, 2015	/s/ PAUL A. PITTMAN
	Paul A. Pittman
	Executive Chairman, President and Chief Executive Officer

EX-31.2

Exhibit31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luca Fabbri, certify that:

1.I have reviewed this Quarterly Report on Form10-Q of Farmland Partners Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e)and 15d-15(e)) [Language omitted in accordance with SEC Release Nos. 34-47986 and 34-54942] for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.[Language omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2015	/s/ LUCA FABBRI
	Luca Fabbri
	Chief Financial Officer, Secretary and Treasurer

EX-32.1

Exhibit32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION1350,

AS ADOPTED PURSUANT TO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Farmland Partners Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),I, Paul A. Pittman, the Executive Chairman, President and Chief Executive Officer of the Company, and I, Luca Fabbri, the Chief Financial Officer, Secretary and Treasurer of the Company, certify, to our knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Report fully complies with the requirements of Section 13(a)or Section 15(d)of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Ay 8, 2015
Date: November  12, 2015	/s/ PAUL A. PITTMAN
	Paul A. Pittman
	Executive Chairman, President and Chief Executive Officer

Date: November 12, 2015	/s/ LUCA FABBRI
	Luca Fabbri
	Chief Financial Officer, Secretary and Treasurer

XML

Stockholders' Equity and Non-controlling Interests (Details 4) - USD ($)			3 Months Ended		9 Months Ended
	Sep. 14, 2015	Feb. 25, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	May. 05, 2015
Shareholders' Equity
Number of shares available for future grant			397,832		397,832
Weighted average grant date fair value
Share-based compensation expense				$ 240,981		$ 446,460
Dividend paid			$ 18,727	$ 22,500	$ 61,935	$ 45,000
Maximum shares of common stock to be issued							615,070
Restricted shares
Number of shares
Unvested at the beginning of the period (in shares)					214,283
Granted (in shares)		3,214			6,169
Vested (in shares)					(70,356)
Forfeited (in shares)					(3,214)
Unvested at the end of the period (in shares)			146,882		146,882
Weighted average grant date fair value
Unvested at the beginning of the period (in dollars per share)					$ 14.00
Granted (in dollars per share)					10.67
Vested (in dollars per share)					(14.00)
Forfeited (in dollars per share)					(14.00)
Unvested at the end of the period (in dollars per share)			$ 13.86		$ 13.86
Aggregate grant date fair value of shares issued		$ 35,836
Vesting period		3 years
Share-based compensation expense			$ 228,508		$ 708,703
Total unrecognized compensation costs related to non-vested stock awards			$ 1,487,654		$ 1,487,654
Weighted average period over which unrecognized compensation costs is expected to be recognized					1 year 7 months 6 days
Maximum shares of common stock to be issued							217,238
Restricted shares | Board of Directors
Number of shares
Forfeited (in shares)		(3,214)
Weighted average grant date fair value
Share-based compensation expense		$ 10,820
Dividend paid		1,047
Share-based compensation reversed		$ 9,773
Restricted shares | Employee
Number of shares
Granted (in shares)	2,955
Weighted average grant date fair value
Aggregate grant date fair value of shares issued	$ 29,993
Vesting period	3 years

XML

Note Receivable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Aug. 31, 2015	Aug. 24, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Origination fees on note receivable	$ 40,000
Offset origination costs	27,748
Carrying value of notes receivable	$ 1,805,674
FPI Loan Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Term of loan	3 years
FPI Loan Program | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal amounts		$ 500,000
FPI Loan Program | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal amounts		$ 5,000,000
Promissory Note Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal amounts	$ 1,800,000
Maximum capacity of receivables			$ 2,000,000
Remaining notes receivables	200,000
Origination fees on note receivable	40,000
Carrying value of notes receivable	1,805,674
Accrued interest	14,800
Net borrowings paid	$ 9,126

XML

Organization and Significant Accounting Policies (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($) a item	Sep. 30, 2015 USD ($) a item	Mar. 16, 2015 a	Sep. 30, 2014 a
Organization and Significant Accounting Policies
Number of farms owned	121	121
Number of grain storage facilities owned	8	8
Area of Real Estate Property | a	24,709	24,709	563	16,978
Below Market Lease
Below Market Lease, Gross | $	$ 229,597	$ 229,597
Below Market Lease, Accumulated Amortization | $	121,885	121,885
Amortization of below market leases | $	$ 64,627	$ 121,885
OP units
Organization and Significant Accounting Policies
Ownership interest (as a percent)	74.10%	74.10%
Operating Partnership | OP units
Organization and Significant Accounting Policies
Ownership interest (as a percent)	74.10%	74.10%
Operating Partnership | FP Land merger, transaction between entities under common control | Pittman Hough Farms | FP Land LLC
Organization and Significant Accounting Policies
Fee simple interest in the properties (as a percent)	100.00%	100.00%
Number of farms owned	38	38
Number of grain storage facilities owned	3	3

XML

Subsequent Events (Details)	1 Months Ended	9 Months Ended
	Oct. 31, 2015 USD ($) a item	Sep. 30, 2015 USD ($) a item $ / shares shares	Sep. 30, 2014 USD ($) a	Nov. 06, 2015 USD ($) lease	Mar. 16, 2015 a
Subsequent Events
Number of farms owned | item		121
Total approximate acres | a		24,709	16,978		563
Purchase price		$ 133,501,847	$ 35,890,805
Contractual rents
Remaining 3 months in 2015		7,242,070
2016		10,618,111
2017		5,838,791
2018		4,068,190
2019		15,441
Total		$ 27,782,603
Lease agreements
Subsequent Events
Number of leases amended | lease				2
Subsequent event | Lease agreements
Subsequent Events
Number of leases amended | lease				2
Contractual rents
Remaining 3 months in 2015				$ 5,471,084
2016				12,055,346
2017				6,285,216
2018				4,068,190
2019				15,441
Total				$ 27,895,277
Farm acquisitions | Forsythe
Subsequent Events
Aggregate OP units and shares of company's common stock | shares		2,608,695
Price of OP unit (per op unit) | $ / shares		$ 11.50
Farm acquisitions | Forsythe | 'Seried A Preferred Units
Subsequent Events
Issuance of units | shares		117,000
Farm acquisitions | Subsequent event | Erker Wallace
Subsequent Events
Number of farms owned | item	(2)
Farm acquisitions | Subsequent event | Forsythe
Subsequent Events
Consideration paid in cash	$ 50,000,000
Number of farms owned | item	(120)
Farm acquisitions | Subsequent event | Expected
Subsequent Events
Total approximate acres | a	24,399
Purchase price	$ 202,180,071
Farm acquisitions | Subsequent event | Expected | Knowles | Georgia
Subsequent Events
Total approximate acres | a	608
Purchase price	$ 1,200,000
Farm acquisitions | Subsequent event | Expected | Erker Wallace | Colorado
Subsequent Events
Total approximate acres | a	1,217
Purchase price	$ 1,915,200
Farm acquisitions | Subsequent event | Expected | Selph | Georgia
Subsequent Events
Total approximate acres | a	116
Purchase price	$ 526,300
Farm acquisitions | Subsequent event | Expected | Kosch | Nebraska
Subsequent Events
Total approximate acres | a	80
Purchase price	$ 726,710
Farm acquisitions | Subsequent event | Expected | Forsythe | Vermilion And Cumberland
Subsequent Events
Total approximate acres | a	22,300
Purchase price	$ 197,000,000
Farm acquisitions | Subsequent event | Expected | Howe | McDonough, IL
Subsequent Events
Total approximate acres | a	78
Purchase price	$ 811,861

XML

Stockholders' Equity and Non-controlling Interests (Details 2)										9 Months Ended	12 Months Ended
	Sep. 12, 2015 USD ($)	Aug. 26, 2015 USD ($) $ / shares	Aug. 12, 2015 $ / shares	Jul. 21, 2015 USD ($) $ / shares shares	Jun. 02, 2015 $ / shares	Feb. 25, 2015 $ / shares	Nov. 20, 2014 $ / shares	Aug. 05, 2014 $ / shares	May. 14, 2014 $ / shares	Sep. 30, 2015 USD ($) $ / shares shares	Dec. 31, 2014 $ / shares	Oct. 29, 2014 USD ($)
Shareholders' Equity
Number of fully diluted outstanding shares including OP units and restricted stock (in shares) | shares										16,157,855
Cash dividend declared (in dollars per share) | $ / shares			$ 0.1275		$ 0.1275	$ 0.1160	$ 0.1160	$ 0.1050	$ 0.1050	$ 0.3710	$ 0.3260
OP units
Shareholders' Equity
Parent ownership interest (as a percent)										74.10%
Share repurchase
Shareholders' Equity
Stock repurchased		$ 2,130
Average price | $ / shares		$ 9.81
Share repurchase | Maximum
Shareholders' Equity
Amount approved for share repurchase program										$ 9,979,068
Common stock
Shareholders' Equity
Common stock issued (in shares) | shares										3,360,000
Common stock | Operating Partnership | OP units
Shareholders' Equity
Ratio for conversion into common shares										1
Non-controlling interest | Operating Partnership | OP units
Shareholders' Equity
Period after becoming holder of OP Units each limited partner has right to require redemption of units										12 months
Public offering | Common stock
Shareholders' Equity
Common stock issued (in shares) | shares				3,000,000
Common stock, issue price (in dollars per share) | $ / shares				$ 11.00
Gross proceeds				$ 36,960,000
Aggregate net proceeds after deducting the underwriting discount and commissions and expenses payable				34,640,811
Gross proceeds generated from IPO	$ 25,000,000
Underwritten public offering.
Shareholders' Equity
Net Proceeds				$ 34,640,811
Underwritten public offering. | Common stock
Shareholders' Equity
Common stock issued (in shares) | shares				360,000
Pittman Hough Farms | Operating Partnership | OP units
Shareholders' Equity
Noncontrolling ownership interest (as a percent)										25.90%
Share repurchase | Maximum
Shareholders' Equity
Amount approved for share repurchase program												$ 10,000,000
Redeemable OP units
Shareholders' Equity
OP units outstanding for redemption | shares										1,945,000

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions

Related Party Transactions

Note 4—Related Party Transactions

See Note 5 for related party acquisition of the Tomasek farm.

As of September 30, 2015, 11% of the acres in the Company’s farm portfolio was rented to and operated by Astoria Farms or Hough Farms, both of which are related parties. Astoria Farms is a partnership in which Pittman Hough Farms LLC (“Pittman Hough Farms”), which is 75% owned by Mr. Pittman, has a 33.34% interest. The balance of Astoria Farms is held by limited partnerships in which Mr. Pittman is the general partner. Hough Farms is a partnership in which Pittman Hough Farms has a 25% interest. The aggregate rent recognized by the Company for these entities for the three and nine months ended September 30, 2015 was $685,005 and $2,035,752, respectively, and was $618,710 and $1,856,129 for the three and nine months ended September 30, 2014, respectively. As of September 30, 2015 and December 31, 2014, the Company had accounts receivable from these entities of $380,122 and $182,763, respectively.

For the three and nine months ended September 30, 2014, Pittman Hough Farms incurred $0 and $219,597, respectively, in professional fees on behalf of the Company.  No such amounts were incurred for the three and nine months ended September 30, 2015.

American Agriculture Corporation (‘‘American Agriculture’’) is a Colorado corporation that is 75% owned by Mr. Pittman and 25% owned by Jesse J. Hough, who provides consulting services to the Company. On April 16, 2014, the Company entered into a shared services agreement with American Agriculture pursuant to which the Company paid American Agriculture an annual fee of $175,000 in equal quarterly installments in exchange for management and accounting services.  The agreement was terminated effective as of December 31, 2014, by mutual agreement of both parties.

The Company reimbursed American Agriculture $1,328 and $20,489 for general and administrative expenses during the three and nine months ended September 30, 2015, respectively, which are included in general and administrative expenses in the combined consolidated statements of operations.  As of September 30, 2015 and December 31, 2014, the Company had outstanding payables to American Agriculture of $0and $49,160, respectively, included in accrued expenses in the combined consolidated balance sheets.  As of September 30, 2015, the Company had outstanding receivables from American Agriculture of $16,418.

On July 21, 2015, the Company entered into a lease agreement with American Agriculture Aviation LLC (“American Ag Aviation”) for the use of a private plane.  American Ag Aviation is a Colorado limited liability company that is owned by Mr. Pittman and Pittman Hough Farms.  During the three and nine months ended September 30, 2015, the Company incurred costs of $50,460 and $79,410 from American Ag Aviation, for use of the aircraft and in accordance with the lease agreement.  These costs were recognized based on the nature of the associated use, as follows: (i) general and administrative: expensed as general and administrative expenses within the Company’s combined consolidated statements of operations; (ii) land acquisition (accounted for as an asset acquisition): allocated to the acquired real estate assets within the Company’s combined consolidated balance sheets, and (iii) land acquisition (accounted for as a business combination): expensed as acquisition and due diligence costs within the Company’s combined consolidated statements of operations.  As of September 30, 2015 and December 31, 2014, the Company had outstanding payables to American Ag Aviation of $50,460 and $0, respectively, included in accrued expenses in the combined consolidated balance sheets.

On April 1, 2015, the TRS and Hough Farms entered into a custom farming arrangement, pursuant to which Hough Farms will perform custom farming on 563 acres.  During the three and nine months ended September 30, 2015, the Company incurred $7,440 and $20,289, respectively, in custom farming costs, which are included in inventory in the combined consolidated balance sheets.  As of September 30, 2015, the Company owed Hough Farms $7,440 for irrigation related costs, which are included in accrued expenses in the combined consolidated balance sheet.

On March 21, 2014 and April 16, 2014, the Company and FP Land entered into reimbursement agreements with Pittman Hough Farms to reimburse Pittman Hough Farms for costs incurred to complete the IPO and the FP Land Merger. The amount of the costs that were reimbursed was reduced by interest expense of $78,603 related to outstanding debt at the time of the FP Land Merger, which was accrued by FP Land as of December 31, 2013.  The aggregate net reimbursable amount under the agreements was $1,361,321.  On June 9, 2014, the Company and the Operating Partnership entered into an additional reimbursement agreement with Pittman Hough Farms for $51,537 in professional fees incurred prior to the IPO.

XML

Revenue Recognition (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) lease	Sep. 30, 2014 USD ($)	Nov. 06, 2015 lease	Dec. 31, 2014 USD ($)
Revenue Recognition
Number of lease payments received per year | lease			1
Deferred revenue	$ 7,383,186		$ 7,383,186			$ 1,364,737
Unamortized below market leases	107,712		107,712
Cash rent received	763,820	$ 107,537	14,047,744	$ 4,229,511
Rental income recognized	4,047,223	1,189,366	8,865,534	2,526,185
Deferred revenue to be recognized in remainder of fiscal year			3,475,965
Contractual rents
Remaining 3 months in 2015	7,242,070		7,242,070
2016	10,618,111		10,618,111
2017	5,838,791		5,838,791
2018	4,068,190		4,068,190
2019	15,441		15,441
Total	27,782,603		27,782,603
Lease agreements
Contractual rents
Number of leases amended | lease					2
Leases in effect at the beginning of the year
Revenue Recognition
Cash rent received		42,537	5,505,082	2,551,664
Rental income recognized	1,776,734	678,391	5,363,933	1,950,098
Leases entered into during the year
Revenue Recognition
Cash rent received	763,820	65,000	8,542,662	1,677,847
Rental income recognized	$ 2,270,489	$ 510,975	$ 3,501,601	$ 576,087

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Organization and Significant Accounting Policies (Details 4) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Non-employee consultant stock based compensation
Deferred financing fees, net	$ 424,434	$ 364,893
Mortgage notes and bonds payable, net	190,060,807	113,513,407
Accounting Standards Update 2015-03 [Member] | As previously reported
Non-employee consultant stock based compensation
Deferred financing fees, net		364,893
Mortgage notes and bonds payable, net		113,878,300
Accounting Standards Update 2015-03 [Member] | Retroactive Application
Non-employee consultant stock based compensation
Mortgage notes and bonds payable, net		$ 113,513,407
Non-employee consultants | Restricted shares | General and administrative expenses
Non-employee consultant stock based compensation
Stock based compensation reduction	$ 31,739

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Concentration Risk (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) item	Sep. 30, 2014 USD ($)
Concentration Risk
Rental income	$ 4,047,223	$ 1,189,366	$ 8,865,534	$ 2,526,185
Cash rent received	763,820	107,537	$ 14,047,744	4,229,511
Justice Family Farms (1)
Concentration Risk
Number of transactions in which acquisition was made | item			2
Tenant concentration
Concentration Risk
Rental income	2,266,632	820,450	$ 4,769,963	2,073,303
Cash rent received	9,375		9,440,379	3,152,451
Tenant concentration | Astoria Farms
Concentration Risk
Rental income	551,563	545,035	1,645,315	1,635,104
Cash rent received	9,375		2,196,878	2,180,139
Tenant concentration | Hough Farms
Concentration Risk
Rental income	133,442	73,675	390,437	221,025
Cash rent received			528,824	294,700
Tenant concentration | Justice Family Farms (1)
Concentration Risk
Rental income	1,379,887		2,128,990
Cash rent received			6,037,065
Tenant concentration | Hudye Farms tenant A (2)
Concentration Risk
Rental income	$ 201,740	$ 201,740	605,221	217,174
Cash rent received			$ 677,612	$ 677,612
Rental income | Tenant concentration | Astoria Farms
Concentration Risk
Concentration risk (as a percent)	13.60%	45.80%	18.60%	64.70%
Rental income | Tenant concentration | Hough Farms
Concentration Risk
Concentration risk (as a percent)	3.30%	6.20%	4.40%	8.70%
Rental income | Tenant concentration | Justice Family Farms (1)
Concentration Risk
Concentration risk (as a percent)	34.10%		24.00%
Rental income | Tenant concentration | Hudye Farms tenant A (2)
Concentration Risk
Concentration risk (as a percent)	5.00%	17.00%	6.80%	8.60%
Rental income | Geographic concentration
Concentration Risk
Concentration risk (as a percent)	100.00%	100.00%	100.00%	100.00%
Rental income | Geographic concentration | Illinois
Concentration Risk
Concentration risk (as a percent)	14.30%	47.30%	19.30%	66.80%
Rental income | Geographic concentration | Colorado
Concentration Risk
Concentration risk (as a percent)	14.30%	41.60%	18.80%	22.10%
Rental income | Geographic concentration | South Carolina
Concentration Risk
Concentration risk (as a percent)	14.80%		16.20%
Rental income | Geographic concentration | North Carolina
Concentration Risk
Concentration risk (as a percent)	23.50%		14.00%
Rental income | Geographic concentration | Nebraska
Concentration Risk
Concentration risk (as a percent)	10.00%	7.70%	10.90%	9.40%
Rental income | Geographic concentration | Arkansas
Concentration Risk
Concentration risk (as a percent)	10.00%		8.80%
Rental income | Geographic concentration | Mississippi
Concentration Risk
Concentration risk (as a percent)	6.90%		6.00%
Rental income | Geographic concentration | Louisiana
Concentration Risk
Concentration risk (as a percent)	2.60%		3.50%
Rental income | Geographic concentration | Virginia
Concentration Risk
Concentration risk (as a percent)	2.60%		1.60%
Rental income | Geographic concentration | Kansas
Concentration Risk
Concentration risk (as a percent)	0.50%	3.40%	0.70%	1.70%
Rental income | Geographic concentration | Michigan
Concentration Risk
Concentration risk (as a percent)	0.50%		0.20%
Cash rent received | Tenant concentration | Astoria Farms
Concentration Risk
Concentration risk (as a percent)	1.20%		15.60%	51.50%
Cash rent received | Tenant concentration | Hough Farms
Concentration Risk
Concentration risk (as a percent)			3.80%	7.00%
Cash rent received | Tenant concentration | Justice Family Farms (1)
Concentration Risk
Concentration risk (as a percent)			43.00%
Cash rent received | Tenant concentration | Hudye Farms tenant A (2)
Concentration Risk
Concentration risk (as a percent)			4.80%	16.00%
Approximate total acres | Geographic concentration
Concentration Risk
Concentration risk (as a percent)			100.00%	100.00%
Approximate total acres | Geographic concentration | Illinois
Concentration Risk
Concentration risk (as a percent)			8.30%	23.60%
Approximate total acres | Geographic concentration | Colorado
Concentration Risk
Concentration risk (as a percent)			27.90%	65.60%
Approximate total acres | Geographic concentration | South Carolina
Concentration Risk
Concentration risk (as a percent)			13.90%
Approximate total acres | Geographic concentration | North Carolina
Concentration Risk
Concentration risk (as a percent)			15.60%
Approximate total acres | Geographic concentration | Nebraska
Concentration Risk
Concentration risk (as a percent)			7.90%	5.20%
Approximate total acres | Geographic concentration | Arkansas
Concentration Risk
Concentration risk (as a percent)			14.60%	2.80%
Approximate total acres | Geographic concentration | Mississippi
Concentration Risk
Concentration risk (as a percent)			6.00%
Approximate total acres | Geographic concentration | Louisiana
Concentration Risk
Concentration risk (as a percent)			2.80%
Approximate total acres | Geographic concentration | Virginia
Concentration Risk
Concentration risk (as a percent)			1.70%
Approximate total acres | Geographic concentration | Kansas
Concentration Risk
Concentration risk (as a percent)			1.00%	2.80%
Approximate total acres | Geographic concentration | Michigan
Concentration Risk
Concentration risk (as a percent)			0.30%

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Related Party Transactions (Details)			1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 09, 2014 USD ($)	Apr. 16, 2014 USD ($)	Apr. 16, 2014 USD ($)	Sep. 30, 2015 USD ($) a	Sep. 30, 2014 USD ($) a	Sep. 30, 2015 USD ($) a	Sep. 30, 2014 USD ($) a	Apr. 01, 2015 a	Mar. 16, 2015 a	Dec. 31, 2014 USD ($)
Related Party Transactions
Accounts receivable from related party				$ 396,540		$ 396,540				$ 182,763
Reduction for accrued interest						$ 1,218,132	$ (44,576)
Area of Real Estate Property | a				24,709	16,978	24,709	16,978		563
Astoria Farms and Hough Farms
Related Party Transactions
Accounts receivable from related party				$ 380,122		$ 380,122				182,763
Astoria Farms and Hough Farms | Lease agreements
Related Party Transactions
Rent from related party				685,005	$ 618,710	2,035,752	$ 1,856,129
Pittman Hough Farms | Professional fees paid on behalf of Company
Related Party Transactions
Expenses from related party				0	$ 0	0	$ 219,597
American Agriculture Corporation
Related Party Transactions
Accounts receivable from related party				16,418		16,418
Outstanding payables				0		0				49,160
American Agriculture Corporation | Shared services agreement
Related Party Transactions
Fee amount		$ 175,000
American Agriculture Corporation | Shared services agreement | General and administrative expenses
Related Party Transactions
Expenses from related party				1,328		20,489
TRS And Hough Farms
Related Party Transactions
Area of Real Estate Property | a								563
Custom farming costs incurred				7,440		20,289
Hough Farms
Related Party Transactions
Outstanding receivables				7,440		$ 7,440
Jesse J. Hough | American Agriculture Corporation
Related Party Transactions
Ownership interest (as a percent)						25.00%
American Agriculture Aviation, LLC
Related Party Transactions
Outstanding payables				50,460		$ 50,460				$ 0
American Agriculture Aviation, LLC | Lease agreements
Related Party Transactions
Fee amount				$ 50,460		$ 79,410
Pittman Hough Farms | Professional fees paid on behalf of Company | General and administrative expenses
Related Party Transactions
Expenses from related party	$ 51,537
Pittman Hough Farms | Reimbursements agreement
Related Party Transactions
Reduction for accrued interest		$ 78,603
Fee amount			$ 1,361,321
Pittman Hough Farms | Astoria Farms
Related Party Transactions
Ownership interest (as a percent)						33.34%
Pittman Hough Farms | Paul A. Pittman
Related Party Transactions
Ownership interest (as a percent)						75.00%
American Agriculture Corporation | Paul A. Pittman
Related Party Transactions
Ownership interest held by related party (as a percent)				75.00%		75.00%
American Agriculture Corporation | Jesse J. Hough
Related Party Transactions
Ownership interest held by related party (as a percent)				25.00%		25.00%
Approximate total acres | Tenant concentration | Astoria Farms and Hough Farms
Related Party Transactions
Percentage of total						11.00%

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Concentration Risk

9 Months Ended

Sep. 30, 2015

Concentration Risk

Concentration Risk

Note 3—Concentration Risk

Credit Risk

For the three and nine months ended September 30, 2015 and 2014, the Company had certain tenant concentrations as set forth in the table below.  Astoria Farms and Hough Farms are related parties (see ‘‘Note 4—Related Party Transactions’’).  If a significant tenant, representing a tenant concentration, fails to make rental payments to the Company or elects to terminate its leases, and the land cannot be re-leased on satisfactory terms, there would be a material adverse effect on the Company’s financial performance and the Company’s ability to continue operations.  Rental income received is recorded on a straight-line basis over the applicable lease term.  The following is a summary of the Company’s significant tenants:

	Rental income recognized
	For the three months ended								For the nine months ended
	September 30,								September 30,
	2015				2014				2015				2014
Astoria Farms	$	551,563	13.6	%	$	545,035	45.8	%	$	1,645,315	18.6	%	$	1,635,104	64.7	%
Hough Farms		133,442	3.3	%		73,675	6.2	%		390,437	4.4	%		221,025	8.7	%
Justice Family Farms LLC (1)		1,379,887	34.1	%		—	—	%		2,128,990	24.0	%		—	—	%
Hudye Farms tenant A (2)		201,740	5.0	%		201,740	17.0	%		605,221	6.8	%		217,174	8.6	%
	$	2,266,632			$	820,450			$	4,769,963			$	2,073,303

	Cash rent received
	For the three months ended								For the nine months ended
	September 30,								September 30,
	2015				2014				2015				2014
Astoria Farms	$	9,375	1.2	%	$	—	—	%	$	2,196,878	15.6	%	$	2,180,139	51.5	%
Hough Farms		—	—	%		—	—	%		528,824	3.8	%		294,700	7.0	%
Justice Family Farms LLC (1)		—	—	%		—	—	%		6,037,065	43.0	%		—	—	%
Hudye Farms tenant A (2)		—	—	%		—	—	%		677,612	4.8	%		677,612	16.0	%
	$	9,375			$	—			$	9,440,379			$	3,152,451

(1) The Justice farms were acquired in two separate transactions that closed on December 22, 2014 and June 2, 2015.

(2) Hudye Farms was acquired on June 12, 2014.

Geographic Risk

The following table summarizes the percentage of approximate total acres owned as of September 30, 2015 and 2014 and rental income recorded by the Company for the three and nine months ended September 30, 2015 and 2014 by location of the farm (unaudited):

					Rental income
	Approximate % of total acres				For the three months ended				For the nine months ended
	as of September 30,				September 30,				September 30,
Location of Farm	2015		2014		2015		2014		2015		2014
Illinois	8.3	%	23.6	%	14.3	%	47.3	%	19.3	%	66.8	%
Colorado	27.9	%	65.6	%	14.3	%	41.6	%	18.8	%	22.1	%
South Carolina	13.9	%	—	%	14.8	%	—	%	16.2	%	—	%
North Carolina	15.6	%	—	%	23.5	%	—	%	14.0	%	—	%
Nebraska	7.9	%	5.2	%	10.0	%	7.7	%	10.9	%	9.4	%
Arkansas	14.6	%	2.8	%	10.0	%	—	%	8.8	%	—	%
Mississippi	6.0	%	—	%	6.9	%	—	%	6.0	%	—	%
Louisiana	2.8	%	—	%	2.6	%	—	%	3.5	%	—	%
Virginia	1.7	%	—	%	2.6	%	—	%	1.6	%	—	%
Kansas	1.0	%	2.8	%	0.5	%	3.4	%	0.7	%	1.7	%
Michigan	0.3	%	—	%	0.5	%	—	%	0.2	%	—	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

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Real Estate (Details)																	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 15, 2015 USD ($) a	Jul. 10, 2015 USD ($) a	Jul. 02, 2015 USD ($) a	Jun. 30, 2015 USD ($) a	Jun. 02, 2015 USD ($) a shares	May. 29, 2015 USD ($) a	May. 14, 2015 USD ($) a	Apr. 30, 2015 USD ($) a	Apr. 17, 2015 USD ($) a	Apr. 10, 2015 USD ($) a shares	Mar. 13, 2015 USD ($) a shares	Feb. 24, 2015 USD ($) a	Feb. 18, 2015 USD ($) a	Jan. 14, 2015 USD ($) a	Jun. 20, 2014 USD ($)	Jun. 12, 2014 USD ($) a	Sep. 30, 2015 USD ($) a item $ / shares shares	Sep. 30, 2014 USD ($) a $ / shares shares	Jun. 30, 2015 USD ($) a	Sep. 30, 2015 USD ($) a item $ / shares shares	Sep. 30, 2014 USD ($) a $ / shares shares	Mar. 16, 2015 a	Jun. 23, 2014 USD ($)
Real Estate
Number of farms owned | item																	121			121
Number of grain storage facilities owned | item																	8			8
Farms acquired and allocation of purchase price
Total approximate acres | a																	24,709	16,978		24,709	16,978	563
Purchase price																				$ 133,501,847	$ 35,890,805
Acquisition costs																	$ 327,758	$ 78,699		327,758	78,699
Issuance of stock as consideration in real estate acquisition																				9,756,389
Accounts receivable																	106,900	20,800		106,900	20,800
Below market lease acquired in acquisitions																	(229,597)			(229,597)
Cash																		1,000			1,000
Accrued property taxes																	(50,310)	(21,958)		(50,310)	(21,958)
Total																		35,890,805			35,890,805
Acquisition related costs																	111,908	42,602		179,468	103,525
Pro forma financial information
Total operating revenues																	4,102,300	1,402,790		9,210,664	3,899,326
Net income (loss)																	$ 788,304	$ 141,798		$ 842,369	$ 671,112
Income (loss) per basic share attributable to common stockholders | $ / shares																	$ 0.04	$ 0.01		$ 0.04	$ 0.17
Income (loss) per diluted share attributable to common stockholders | $ / shares																	$ 0.04	$ 0.01		$ 0.04	$ 0.17
Weighted-average number of common shares - basic | shares																	11,154,127	6,305,253		8,872,279	3,168,803
Weighted-average number of common shares - diluted | shares																	11,158,280	6,309,584		8,882,102	3,168,803
OP units
Farms acquired and allocation of purchase price
Temporary Equity redeemable for cash | shares					883,724
Land
Farms acquired and allocation of purchase price
Real estate																		$ 33,310,482			$ 33,310,482
Groundwater
Farms acquired and allocation of purchase price
Real estate																	$ 1,327,842	1,742,550		$ 1,327,842	1,742,550
Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	2,066,698	749,931		2,066,698	749,931
Other
Farms acquired and allocation of purchase price
Real estate																	1,638,993	88,000		1,638,993	88,000
Timber
Farms acquired and allocation of purchase price
Real estate																	32,500			32,500
In-place lease
Farms acquired and allocation of purchase price
Below market lease acquired in acquisitions																	(229,597)			(229,597)
FPI Burlington LLC | Lease agreements
Farms acquired and allocation of purchase price
Aggregate annual cash rent																							$ 1,200,000
Erker farm
Farms acquired and allocation of purchase price
Accrued property taxes																		(3,291)			(3,291)
Total																		7,644,339			7,644,339
Erker farm | Land
Farms acquired and allocation of purchase price
Real estate																		6,350,958			6,350,958
Erker farm | Groundwater
Farms acquired and allocation of purchase price
Real estate																		1,012,000			1,012,000
Erker farm | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																		284,672			284,672
Hudye
Farms acquired and allocation of purchase price
Cash																		1,000			1,000
Accrued property taxes																		(13,930)			(13,930)
Total																		24,500,000			24,500,000
Hudye | Land
Farms acquired and allocation of purchase price
Real estate																		23,466,271			23,466,271
Hudye | Groundwater
Farms acquired and allocation of purchase price
Real estate																		730,550			730,550
Hudye | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																		246,109			246,109
Hudye | Other
Farms acquired and allocation of purchase price
Real estate																		70,000			70,000
Broadwater
Farms acquired and allocation of purchase price
Accrued property taxes																		(4,511)			(4,511)
Total																		1,040,666			1,040,666
Broadwater | Land
Farms acquired and allocation of purchase price
Real estate																		848,077			848,077
Broadwater | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																		179,100			179,100
Broadwater | Other
Farms acquired and allocation of purchase price
Real estate																		18,000			18,000
Ruder
Farms acquired and allocation of purchase price
Accounts receivable																		20,800			20,800
Accrued property taxes																		(226)			(226)
Total																		2,705,800			2,705,800
Ruder | Land
Farms acquired and allocation of purchase price
Real estate																		2,645,176			2,645,176
Ruder | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																		$ 40,050			$ 40,050
Justice
Farms acquired and allocation of purchase price
Issuance of stock as consideration in real estate acquisition (in shares) | shares					824,398
Justice | OP units
Farms acquired and allocation of purchase price
Issuance of stock as consideration in real estate acquisition					$ 30,914,634
Issuance of stock as consideration in real estate acquisition (in shares) | shares					1,993,709
Temporary Equity redeemable for cash | shares					883,724
Swarek | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	41,213			41,213
Stonington-Bass | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	79,600			79,600
Stonington-Bass | Other
Farms acquired and allocation of purchase price
Real estate																	4,600			4,600
Benda Butler
Farms acquired and allocation of purchase price
Accrued property taxes																	(767)			(767)
Benda Polk
Farms acquired and allocation of purchase price
Accrued property taxes																	(716)			(716)
Timmerman
Farms acquired and allocation of purchase price
Accrued property taxes																	(1,683)			(1,683)
Timmerman | Groundwater
Farms acquired and allocation of purchase price
Real estate																	625,900			625,900
Timmerman | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	36,600			36,600
Cypress Bay Farm | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	276,000			276,000
Cypress Bay Farm | Other
Farms acquired and allocation of purchase price
Real estate																	68,400			68,400
Nebraska Battle Creek Farms
Farms acquired and allocation of purchase price
Accounts receivable																	37,375			37,375
Accrued property taxes																	(21,725)			(21,725)
Nebraska Battle Creek Farms | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	339,000			339,000
Nebraska Battle Creek Farms | In-place lease
Farms acquired and allocation of purchase price
Below market lease acquired in acquisitions																	(88,950)			(88,950)
Northeast Nebraska Farms
Farms acquired and allocation of purchase price
Accounts receivable																	29,933			29,933
Accrued property taxes																	(16,080)			(16,080)
Northeast Nebraska Farms | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	235,800			235,800
Northeast Nebraska Farms | In-place lease
Farms acquired and allocation of purchase price
Below market lease acquired in acquisitions																	(140,647)			(140,647)
Drury Farm | Groundwater
Farms acquired and allocation of purchase price
Real estate																	106,925			106,925
Drury Farm | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	34,100			34,100
Sutter Farm | Groundwater
Farms acquired and allocation of purchase price
Real estate																	595,017			595,017
Sutter Farm | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	104,300			104,300
Bobcat Farm
Farms acquired and allocation of purchase price
Accounts receivable																	30,217			30,217
Accrued property taxes																	2,902			2,902
Bobcat Farm | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	183,500			183,500
Swindoll Darby Farm
Farms acquired and allocation of purchase price
Accrued property taxes																	(1,132)			(1,132)
Swindoll Darby Farm | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	32,600			32,600
Abraham
Farms acquired and allocation of purchase price
Accrued property taxes																	(50)			(50)
Justice Farms
Farms acquired and allocation of purchase price
Accrued property taxes																	(11,059)			(11,059)
Justice Farms | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	95,831			95,831
Justice Farms | Other
Farms acquired and allocation of purchase price
Real estate																	37,500			37,500
Justice Farms | Timber
Farms acquired and allocation of purchase price
Real estate																	32,500			32,500
Tomasek
Farms acquired and allocation of purchase price
Accounts receivable																	9,375			9,375
Purdy | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	244,387			244,387
Matthews | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	77,475			77,475
Matthews | Other
Farms acquired and allocation of purchase price
Real estate																	161,000			161,000
Riccioni | Irrigation improvements
Farms acquired and allocation of purchase price
Real estate																	286,292			286,292
Riccioni | Other
Farms acquired and allocation of purchase price
Real estate																	1,367,493			1,367,493
Farm acquisitions | Land
Farms acquired and allocation of purchase price
Real estate																	128,608,821			128,608,821
Farm acquisitions | Erker farm | Kit Carson County, CO
Farms acquired and allocation of purchase price
Acquisition date																					May 30, 2014
Total approximate acres | a																		3,171			3,171
Purchase price																					$ 7,644,339
Acquisition costs																		$ 5,017			$ 5,017
Farm acquisitions | Hudye | Kit Carson and Cheyenne, CO and Sherman and Logan, KS
Farms acquired and allocation of purchase price
Acquisition date																					Jun. 12, 2014
Total approximate acres | a																		12,500			12,500
Purchase price																					$ 24,500,000
Acquisition costs																		$ 63,836			$ 63,836
Farm acquisitions | Broadwater | Morrill County, NE
Farms acquired and allocation of purchase price
Acquisition date																					Jul. 01, 2014
Total approximate acres | a																		640			640
Purchase price																					$ 1,040,666
Acquisition costs																		$ 666			$ 666
Farm acquisitions | Ruder | Yell County, AR
Farms acquired and allocation of purchase price
Acquisition date																					Sep. 24, 2014
Total approximate acres | a																		667			667
Purchase price																					$ 2,705,800
Acquisition costs																		$ 9,180			9,180
Farm acquisitions | Smith farm | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	133,501,847			133,501,847
Farm acquisitions | Swarek | Land
Farms acquired and allocation of purchase price
Real estate																	3,470,706			3,470,706
Farm acquisitions | Swarek | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	3,511,919			3,511,919
Farm acquisitions | Swarek | Quitman, MS
Farms acquired and allocation of purchase price
Acquisition date														Jan. 14, 2015
Total approximate acres | a														850
Purchase price														$ 3,511,919
Acquisition costs														$ 5,819
Farm acquisitions | Stonington-Bass | Land
Farms acquired and allocation of purchase price
Real estate																	1,994,800			1,994,800
Farm acquisitions | Stonington-Bass | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	2,079,000			2,079,000
Farm acquisitions | Stonington-Bass | Baca, CO
Farms acquired and allocation of purchase price
Acquisition date													Feb. 18, 2015
Total approximate acres | a													997
Purchase price													$ 2,079,000
Acquisition costs													$ 1,277
Farm acquisitions | Benda Butler | Land
Farms acquired and allocation of purchase price
Real estate																	606,566			606,566
Farm acquisitions | Benda Butler | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	605,799			605,799
Farm acquisitions | Benda Butler | Butler, NE
Farms acquired and allocation of purchase price
Acquisition date												Feb. 24, 2015
Total approximate acres | a												73
Purchase price												$ 605,799
Acquisition costs												$ 1,393
Farm acquisitions | Benda Polk | Land
Farms acquired and allocation of purchase price
Real estate																	861,714			861,714
Farm acquisitions | Benda Polk | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	860,998			860,998
Farm acquisitions | Benda Polk | Polk, NE
Farms acquired and allocation of purchase price
Acquisition date												Feb. 24, 2015
Total approximate acres | a												123
Purchase price												$ 860,998
Acquisition costs												$ 1,748
Farm acquisitions | Timmerman | Land
Farms acquired and allocation of purchase price
Real estate																	1,365,403			1,365,403
Farm acquisitions | Timmerman | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	2,026,220			2,026,220
Farm acquisitions | Timmerman | Yuma, CO
Farms acquired and allocation of purchase price
Acquisition date											Mar. 13, 2015
Total approximate acres | a											315
Purchase price											$ 2,026,220
Acquisition costs											477
Issuance of stock as consideration in real estate acquisition											$ 712,743
Issuance of stock as consideration in real estate acquisition (in shares) | shares											63,581
Farm acquisitions | Cypress Bay Farm | Land
Farms acquired and allocation of purchase price
Real estate																	1,959,173			1,959,173
Farm acquisitions | Cypress Bay Farm | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	2,303,573			2,303,573
Farm acquisitions | Cypress Bay Farm | Bamberg, SC
Farms acquired and allocation of purchase price
Acquisition date											Mar. 13, 2015
Total approximate acres | a											502
Purchase price											$ 2,303,573
Acquisition costs											$ 3,573
Farm acquisitions | Nebraska Battle Creek Farms | Land
Farms acquired and allocation of purchase price
Real estate																	8,756,895			8,756,895
Farm acquisitions | Nebraska Battle Creek Farms | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	9,022,595			9,022,595
Farm acquisitions | Nebraska Battle Creek Farms | Madison, NE
Farms acquired and allocation of purchase price
Acquisition date										Apr. 10, 2015
Total approximate acres | a										1,117
Purchase price										$ 9,022,595
Acquisition costs										$ 19,776
Farm acquisitions | Northeast Nebraska Farms | Land
Farms acquired and allocation of purchase price
Real estate																	8,872,203			8,872,203
Farm acquisitions | Northeast Nebraska Farms | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	8,981,209			8,981,209
Farm acquisitions | Northeast Nebraska Farms | Pierce, NE
Farms acquired and allocation of purchase price
Acquisition date										Apr. 10, 2015
Total approximate acres | a										1,160
Purchase price										$ 8,981,209
Acquisition costs										$ 19,761
Farm acquisitions | Drury Farm | Land
Farms acquired and allocation of purchase price
Real estate																	808,975			808,975
Farm acquisitions | Drury Farm | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	950,000			950,000
Farm acquisitions | Drury Farm | Yuma, CO
Farms acquired and allocation of purchase price
Acquisition date										Apr. 10, 2015
Total approximate acres | a										160
Purchase price										$ 950,000
Acquisition costs										396
Farm acquisitions | Sutter Farm | Land
Farms acquired and allocation of purchase price
Real estate																	1,300,739			1,300,739
Farm acquisitions | Sutter Farm | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	2,000,056			2,000,056
Farm acquisitions | Sutter Farm | Yuma, CO
Farms acquired and allocation of purchase price
Acquisition date									Apr. 17, 2015
Total approximate acres | a									322
Purchase price									$ 2,000,056
Acquisition costs									$ 56
Farm acquisitions | Bobcat Farm | Land
Farms acquired and allocation of purchase price
Real estate																	2,808,131			2,808,131
Farm acquisitions | Bobcat Farm | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	3,024,750			3,024,750
Farm acquisitions | Bobcat Farm | St. Francis, AR
Farms acquired and allocation of purchase price
Acquisition date								Apr. 30, 2015
Total approximate acres | a								934
Purchase price								$ 3,024,750
Acquisition costs								$ 11,642
Farm acquisitions | Swindoll Darby Farm | Land
Farms acquired and allocation of purchase price
Real estate																	1,436,989			1,436,989
Farm acquisitions | Swindoll Darby Farm | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	1,468,457			1,468,457
Farm acquisitions | Swindoll Darby Farm | Tunica, MS
Farms acquired and allocation of purchase price
Acquisition date							May 14, 2015
Total approximate acres | a							359
Purchase price							$ 1,468,457
Acquisition costs							$ 2,207
Farm acquisitions | Abraham | Land
Farms acquired and allocation of purchase price
Real estate																	761,894			761,894
Farm acquisitions | Abraham | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	761,844			761,844
Farm acquisitions | Abraham | Fulton, IL
Farms acquired and allocation of purchase price
Acquisition date						May 29, 2015
Total approximate acres | a						110
Purchase price						$ 761,844
Acquisition costs						$ 2,191
Farm acquisitions | Justice Farms
Farms acquired and allocation of purchase price
Acquisition date					Jun. 02, 2015
Total approximate acres | a					14,935
Purchase price					$ 80,913,167
Acquisition costs					$ 198,533
Farm acquisitions | Justice Farms | Land
Farms acquired and allocation of purchase price
Real estate																	80,758,395			80,758,395
Farm acquisitions | Justice Farms | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	80,913,167			80,913,167
Farm acquisitions | Tomasek | Land
Farms acquired and allocation of purchase price
Real estate																	681,088			681,088
Farm acquisitions | Tomasek | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	690,463			690,463
Farm acquisitions | Tomasek | McDonough, IL
Farms acquired and allocation of purchase price
Acquisition date				Jun. 30, 2015
Total approximate acres | a				58															58
Purchase price				$ 690,463
Acquisition costs				$ 2,162															$ 2,162
Farm acquisitions | Purdy | Land
Farms acquired and allocation of purchase price
Real estate																	5,923,605			5,923,605
Farm acquisitions | Purdy | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	6,167,992			6,167,992
Farm acquisitions | Purdy | Crittenden / Mississippi, AR
Farms acquired and allocation of purchase price
Acquisition date			Jul. 02, 2015
Total approximate acres | a			1,383
Purchase price			$ 6,167,992
Acquisition costs			$ 21,342
Farm acquisitions | Matthews | Land
Farms acquired and allocation of purchase price
Real estate																	5,337,735			5,337,735
Farm acquisitions | Matthews | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	5,576,210			5,576,210
Farm acquisitions | Matthews | Tunica/Desoto, MS
Farms acquired and allocation of purchase price
Acquisition date		Jul. 10, 2015
Total approximate acres | a		1,130
Purchase price		$ 5,576,210
Acquisition costs		$ 21,810
Farm acquisitions | Riccioni | Land
Farms acquired and allocation of purchase price
Real estate																	903,810			903,810
Farm acquisitions | Riccioni | McDonough County, IL
Farms acquired and allocation of purchase price
Total																	2,557,595			2,557,595
Farm acquisitions | Riccioni | Van Buren, MI
Farms acquired and allocation of purchase price
Acquisition date	Sep. 15, 2015
Total approximate acres | a	181
Purchase price	$ 2,557,595
Acquisition costs	$ 13,595
HFUSI | FPI Burlington LLC
Farms acquired and allocation of purchase price
Tax built-in gain															$ 17,800,000
HFUSI | Hudye | Eastern Colorado
Farms acquired and allocation of purchase price
Total approximate acres | a																12,500
Purchase price																$ 24,500,000
Acquisition costs																$ 63,836
Business combinations
Farms acquired and allocation of purchase price
Total revenue from date of acquisition																	284,012	390,620		524,811	447,441
Net income from date of acquisition																	231,681	342,022		$ 363,849	322,631
Acquisition related costs																	$ 0	$ 9,180	$ 55,014		$ 73,016
Nebraska Battle Creek Farms | OP units
Farms acquired and allocation of purchase price
Issuance of stock as consideration in real estate acquisition										$ 1,372,595
Issuance of stock as consideration in real estate acquisition (in shares) | shares										118,634
Northeast Nebraska Farms | OP units
Farms acquired and allocation of purchase price
Issuance of stock as consideration in real estate acquisition										$ 1,387,856
Issuance of stock as consideration in real estate acquisition (in shares) | shares										119,953
Astoria Farms
Farms acquired and allocation of purchase price
Lease term																			2 years
Annual rents																			$ 18,749

XML

Stockholders' Equity and Non-controlling Interests (Details 5) - shares		3 Months Ended		9 Months Ended
	Jun. 02, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Excluded from diluted earnings per share calculation
Anti-dilutive compensation-related shares outstanding			209,952		214,283
OP units
Excluded from diluted earnings per share calculation
Temporary Equity redeemable for cash	883,724
Restricted shares
Excluded from diluted earnings per share calculation
Anti-dilutive compensation-related shares outstanding		142,729		137,059
Operating Partnership | Non-controlling interest
Excluded from diluted earnings per share calculation
Weighted average number of OP units		3,293,572	1,945,000	2,584,098	1,189,799
Operating Partnership | Non-controlling interest | Excess OP units
Excluded from diluted earnings per share calculation
Weighted average number of OP units		883,724		388,450

XML

Combined Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Land, at cost	$ 281,315,286	$ 152,294,899
Grain facilities	4,259,511	2,650,607
Groundwater	6,332,784	5,004,942
Irrigation improvements	11,130,016	5,188,459
Drainage improvements	1,530,998	783,475
Permanent plantings	1,168,493
Other	932,692	570,574
Construction in progress	215,914
Real estate, at cost	306,885,694	166,492,956
Less accumulated depreciation	(1,390,697)	(777,469)
Total real estate, net	305,494,997	165,715,487
Deposits	226,912	419,548
Cash	42,504,514	33,736,166
Note and interest receivable, net	1,805,674
Deferred offering costs	285,780	0
Accounts receivable	744,240	336,919
Accounts receivable, related party	396,540	182,763
Inventory	199,364
Other	432,370	267,431
TOTAL ASSETS	352,090,391	200,658,314
LIABILITIES
Mortgage notes and bonds payable, net	190,060,807	113,513,407
Dividends payable	2,060,127	1,122,504
Accrued interest	1,457,065	238,933
Accrued property taxes	564,821	241,221
Deferred revenue (See Note 2)	7,383,186	1,364,737
Accrued expenses	1,338,162	651,672
Total liabilities	$ 202,864,168	$ 117,132,474
Commitments and contingencies (See Note 8)
Redeemable non-controlling interest in operating partnership	$ 9,558,272
EQUITY
Common stock, $0.01 par value, 500,000,000 shares authorized; 11,982,689 and 11,980,559 shares issued and outstanding at September 30, 2015, respectively, and 7,731,755 shares issued and outstanding at December 31, 2014	117,634	$ 75,175
Additional paid in capital	114,795,891	68,980,437
Retained earnings (deficit)	6,311	(568,192)
Cumulative dividends	(5,661,014)	(2,130,218)
Non-controlling interests in operating partnership	30,409,129	17,168,638
Total equity	139,667,951	83,525,840
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST IN OPERATING PARTNERSHIP AND EQUITY	$ 352,090,391	$ 200,658,314

XML

Organization and Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Organization and Significant Accounting Policies

Organization and Significant Accounting Policies

Note 1—Organization and Significant Accounting Policies

Organization

Farmland Partners Inc., collectively with its subsidiaries, (the “Company”), is an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. The Company was incorporated in Maryland on September 27, 2013. The Company is the sole member of the general partner of Farmland Partners Operating Partnership, LP (the “Operating Partnership”), which was formed in Delaware on September 27, 2013. As of September 30, 2015, the Company owned a portfolio of 121 farms, as well as eight grain storage facilities, which are consolidated in these financial statements. All of the Company’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of September 30, 2015, the Company owned 74.1% of the units of limited partnership interest in the Operating Partnership (“OP units”) (see “Note 9—Stockholders’ Equity and Non-controlling Interests” for additional discussion regarding OP units).

The Company and the Operating Partnership commenced operations upon completion of the underwritten initial public offering of shares of the Company’s common stock (the “IPO”) on April 16, 2014 (see “Note 9—Stockholders’ Equity and Non-controlling Interests”). Concurrently with the completion of the IPO, the Company’s predecessor, FP Land LLC, a Delaware limited liability company (“FP Land”), merged with and into the Operating Partnership, with the Operating Partnership surviving (the “FP Land Merger”). As a result of the FP Land Merger, the Operating Partnership succeeded to the business and operations of FP Land, including FP Land’s 100% fee simple interest in a portfolio of 38 farms and three grain storage facilities (the “Contributed Properties”).  

The Company has elected to be taxed as a real estate investment trust, or REIT, under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, (the “Code”), effective with its short taxable year ended December 31, 2014.

On March 16, 2015, the Company formed FPI Agribusiness Inc., a wholly owned subsidiary, as a taxable REIT subsidiary (the “TRS” or “FPI Agribusiness”).  The TRS was formed to provide purchasing services to the Company’s tenants and also to operate a small scale custom farming business on 563 acres of farmland owned by the Company and located in Nebraska.

Principles of Combination and Consolidation

The accompanying combined consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. Upon completion of the IPO and the related formation transactions, the Company succeeded to the operations of FP Land.  FP Land was an entity under the common control of Paul A. Pittman, the Company’s Executive Chairman, President and Chief Executive Officer, and was organized to hold the equity interests of PH Farms LLC, an Illinois limited liability company, and Cottonwood Valley Land, LLC, a Nebraska limited liability company, both of which are engaged in the ownership of farmland and property related to farming in agricultural markets in Illinois, Nebraska and Colorado.  These financial statements retroactively reflect the consolidated equity ownership structure of the Company and the formation transactions.  The formation transactions were accounted for at historical cost due to the existence of common control.

The Company’s financial condition as of September 30, 2015 and December 31, 2014 and the results of operations for the three and nine months ended September 30, 2015 and the three months ended September 30, 2014, reflect the financial condition and results of operations of the Company.  Due to the timing of the IPO and the formation transactions, the results of operations for the nine months ended September 30, 2014 reflect the combined results of operations of FP Land, together with the Company, for the period prior to April 16, 2014 and the consolidated results of the Company for the period from April 16, 2014 through September 30, 2014.

Interim Financial Information

The information in the Company’s combined consolidated financial statements for the three and nine months ended September 30, 2015 and 2014 is unaudited.  All significant inter-company balances and transactions have been eliminated in consolidation.  The accompanying financial statements for the three and nine months ended September 30, 2015 and 2014 include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods.  The financial information should be read in conjunction with the combined consolidated financial statements for the year ended December 31, 2014, included in the Company’s Annual Report on Form 10-K, which the Company filed with the SEC on March 3, 2015.  Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of actual operating results for the entire year ending December 31, 2015.

The combined consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements.  Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

Reclassifications

Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income (loss), equity or cash flows from operations.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 materially differ from those estimates.

Real Estate Acquisitions

The Company accounts for all acquisitions in accordance with the business combinations standard. When the Company acquires farmland that was previously operated as a rental property, the Company evaluates whether a lease is in place or a crop is being produced at the time of closing of the acquisition.  If a lease is in place or a crop is being produced, the Company accounts for the transaction as a business combination and charges the costs associated with the acquisition to acquisition and due diligence costs on the statement of operations, as incurred. Otherwise, acquisitions with no lease in place or crops being produced at the time of acquisition are accounted for as asset acquisitions.  When the Company acquires farmland in a sale-lease back transaction, the Company accounts for the transaction as an asset acquisition and capitalizes the transaction costs incurred in connection with the acquisition.

Upon acquisition of real estate, the Company allocates the purchase price of the real estate based upon the fair value of the assets and liabilities acquired, which historically have consisted of land, drainage improvements, irrigation improvements, groundwater, permanent plantings (bushes, shrubs, vines, and perennial crops) and grain facilities, and may also consist of intangible assets including in-place leases, above market and below market leases, and tenant relationships. The Company allocates the purchase price to the fair value of the tangible assets of acquired real estate by valuing the land as if it were unimproved. The Company values improvements, including permanent plantings and grain facilities, at replacement cost as new, adjusted for depreciation. Management’s estimates of land and groundwater value are made using a comparable sales analysis. Factors considered by management in its analysis of land value include soil types and water availability, the sales prices of comparable farms, and the replacement cost and residual useful life of land improvements. Management’s estimates of groundwater value are made using historical information obtained regarding the applicable aquifer.Factors considered by management in its analysis of groundwater value are related to the location of the aquifer and whether or not the aquifer is a depletable resource or a replenishing resource.  If the aquifer is a replenishing resource, no value is allocated to the groundwater.  The Company includes an estimate of property taxes in the purchase price allocation of acquisitions to account for the expected liability that was acquired.

When above or below market leases are acquired, the Company values the intangible assets based on the present value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above market leases and the initial term plus the term of any below market fixed rate renewal options for below market leases that are considered bargain renewal options. The above market lease values will be amortized as a reduction of rental income over the remaining term of the respective leases. The fair value of acquired below market leases, included in deferred revenue on the accompanying combined consolidated balance sheets, is amortized as an increase of rental income on a straight-line basis over the remaining non-cancelable terms of the respective leases, plus the terms of any below market fixed rate renewal options that are considered bargain renewal options of the respective leases.  As of September 30, 2015, the aggregate gross amount of below market leases was $229,597 and the total accumulated amortization was $121,885.  Total amortization related to below market leases was $64,627 and $121,885 for the three and nine months ended September 30, 2015, respectively. 

As of September 30, 2015 and December 31, 2014, the Company did not have any in-place lease or tenant relationship intangibles. The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired, based on the Company’s evaluation of the specific characteristics of each tenant’s lease, availability of replacement tenants, probability of lease renewal, estimated down time and its overall relationship with the tenant. The value of in-place lease intangibles and tenant relationships will be included as an intangible asset, and will be amortized over the remaining lease term (and expected renewal periods of the respective leases for tenant relationships) as amortization expense. If a tenant terminates its lease prior to its stated expiration, any unamortized amounts relating to that lease, including (i) above and below market leases, (ii) in-place lease values, and (iii) tenant relationships, would be recorded to revenue or expense as appropriate.

Using information available at the time acquisition or due diligence costs are incurred, the Company capitalizes acquisition costs for expected asset acquisitions.  If the asset acquisition is abandoned, the capitalized asset acquisition costs will be charged to acquisition and due diligence costs in the period of abandonment.

Total consideration may include a combination of cash and equity securities.  When equity securities are issued, the Company determines the fair value of the equity securities issued based on the number of shares of common stock or OP units issued multiplied by the stock price on the date of closing.

Using information available at the time of acquisition, the Company allocates the total consideration to tangible assets and liabilities and identified intangible assets and liabilities. The Company may adjust the preliminary purchase price allocations after obtaining more information about assets acquired and liabilities assumed at the date of acquisition.

Real Estate

The Company’s real estate consists of land, groundwater and improvements made to the land consisting of permanent plantings, grain facilities, irrigation improvements, drainage improvements and other improvements. The Company records real estate at cost and capitalizes improvements and replacements when they extend the useful life or improve the efficiency of the asset.  Construction in progress includes the costs to build new grain storage facilities and install new pivots and wells on newly acquired farms.  The Company begins depreciating assets when the asset is ready for its intended use.

The Company expenses costs of repairs and maintenance as such costs are incurred. The Company computes depreciation and depletion for assets classified as improvements using the straight-line method over their estimated useful lives as follows:

	Years
Grain facilities	10	-	40
Irrigation improvements	2	-	40
Drainage improvements	27	-	65
Groundwater	3	-	50
Permanent plantings			23
Other	5	-	40

The Company periodically evaluates the estimated useful lives for groundwater based on current state water regulations and depletion levels of the aquifers.

When a sale occurs, the Company recognizes the associated gain when all consideration has been transferred, the sale has closed and there is no material continuing involvement. If a sale is expected to generate a loss, the Company first assesses it through the impairment evaluation process—see “Impairment of Real Estate Assets” below.

Impairment of Real Estate Assets

The Company evaluates its tangible and identifiable intangible real estate assets for impairment indicators whenever events such as declines in a property’s operating performance, deteriorating market conditions or environmental or legal concerns bring recoverability of the carrying value of one or more assets into question. If such events are present, the Company projects the total undiscounted cash flows of the asset, including proceeds from disposition, and compares them to the net book value of the asset. If this evaluation indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. There have been no impairments recognized on real estate assets in the accompanying financial statements.

Cash

The Company’s cash at September 30, 2015 and December 31, 2014 was held in the custody of two financial institutions, and the Company’s balance at any given financial institution may at times exceed federally insurable limits. The Company monitors balances with individual financial institutions to mitigate risks relating to balances exceeding such limits.

Debt Issuance Costs

Costs incurred by the Company or its predecessor in obtaining debt are deducted from the face amount of mortgage notes and bonds payable.  During the nine-month period ended September 30, 2015, $227,703 in costs were incurred in conjunction with the issuance of five bonds under the Farmer Mac Facility (as defined below).  During the year ended December 31, 2014, $135,340 and $234,188 in costs were incurred in conjunction with the modification of the First Midwest Bank debt on April 16, 2014 and the issuance of five bonds under the Farmer Mac Facility, respectively. Debt issuance costs are amortized using the straight-line method, which approximates the effective interest method, over the terms of the related indebtedness. Any unamortized amounts upon early repayment of mortgage notes payable are written off in the period in which repayment occurs. Fully amortized debt issuance costs are removed from the books upon maturity or repayment of the underlying debt. The Company wrote off $12,300 in debt issuance costs in conjunction with the early repayment of debt during the nine months ended September 30, 2015, and no costs were written off during the three months ended September 30, 2015. Accumulated amortization of debt issuance costs was $253,301 and $97,439 as of September 30, 2015 and December 31, 2014, respectively.  

Note and Interest Receivable

The note receivable is stated at its unpaid principal balance, and includes unamortized direct origination costs and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points. 

Management determines the appropriate classification of debt securities at the time of issuance and reevaluates such designation as of each statement of financial position date.  As of September 30, 2015, the Company has designated the note receivable as held-to-maturity based on the Company’s positive intent and ability to hold the security until maturity.  Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method.  Such amortization, including interest, is included in other revenue within our combined consolidated statements of operations.

Allowance for Note and Interest Receivable

A note is placed on nonaccrual status when management determines, after considering economic and business conditions and collection efforts, that the note is impaired or collection of interest is doubtful.  The accrual of interest on the instrument ceases when there is concern as to the ultimate collection of principal or interest due according to the note agreement will not be realized.  Any payment received on such non-accrual notes are recorded as interest income when the payment is received.  The note is reclassified as accrual-basis once interest and principal payments become current.  The Company periodically reviews the value of the underlying collateral of farm real estate for the note receivable and evaluates whether the value of the collateral continues to provide adequate security for the note.  Should the value of the underlying collateral become less than the outstanding principal and interest, the Company will determine whether there is a requirement to record an allowance.  Any uncollectible interest previously accrued is also charged off, or an allowance is established by a charge to interest income.  As of September 30, 2015, we believe the value of the underlying collateral to be sufficient and in excess of the outstanding principal and accrued interest.

Deferred Offering Costs

Deferred offering costs include incremental direct costs incurred by the Company in conjunction with proposed or actual offering of securities.  At the completion of the offering, the deferred offering costs are charged ratably as a reduction of the gross proceeds of equity as stock is issued.  If an offering is abandoned, the previously deferred offering costs will be charged to operations in the period in which the abandonment occurs. The Company incurred $370,493 and $756,970 in deferred offering costs in the three and nine months ended September 30, 2015, respectively.  As of September 30, 2015 and December 31, 2014, the Company had $285,780 and $0, respectively, in deferred offering costs related to regulatory, legal, accounting and professional service costs associated with proposed or actual offering of securities.

Accounts Receivable

Accounts receivable are presented at face value, net of the allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income and is maintained at a level believed adequate by management to absorb estimated bad debts based on historical experience and current economic conditions. The allowance for doubtful accounts was $0 as of September 30, 2015 and December 31, 2014.

Inventory

The costs of growing crop are accumulated until the time of harvest at the lower of cost or market value and are included in inventory in our combined consolidated financial statements.  Costs are allocated to growing crops based on a percentage of the total costs of production and total operating costs that are attributable to the portion of the crops that remain in inventory at the end of the year.  Growing crop consists primarily of land preparation, cultivation, irrigation and fertilization costs incurred by FPI Agribusiness. Growing crop inventory is charged to cost of products sold when the related crop is harvested and sold. 

Harvested crop inventory includes costs accumulated during the growing phase plus harvesting costs and are stated at the lower of those costs or the estimated net realizable value, which is the market price, based upon the nearest market in the geographic region, less any cost of disposition.  Cost of disposition includes broker’s commissions, freight and other marketing costs.   

Other inventory such as fertilizer and pesticides are valued at the lower of cost or market.

Inventory consisted of the following:

	September 30, 2015
Growing crop	$	193,278
Fertilizer and pesticides		6,086
	$	199,364

Revenue Recognition

Rental income includes rents that each tenant pays in accordance with the terms of its lease. Minimum rents pursuant to leases are recognized as revenue on a straight-line basis over the lease term. Deferred revenue includes the cumulative difference between the rental revenue recorded on a straight-line basis and the cash rent received from tenants in accordance with the lease terms.  Acquired below market leases are included in deferred revenue on the accompanying combined consolidated financial statements, which are amortized into rental income over the life of the respective leases, plus the terms of the below market renewal options, if any.

Leases in place as of September 30, 2015 had terms ranging from one to five years.  As of September 30, 2015, the Company had 17 leases with renewal options and one lease with rent escalations.  The majority of the Company’s leases provide for a fixed cash rent payment.  Tenant leases on acquired farms generally require the tenant to pay the Company rent for the entire initial year regardless of the date of acquisition, if the acquisition is closed prior to, or shortly after, planting of crops.  If the acquisition is closed later in the year, the Company typically receives a partial rent payment or no rent payment at all.

Certain of the Company’s leases provide for a rent payment determined as a percentage of the gross farm proceeds or a percentage of harvested crops.  As of September 30, 2015, all such leases provided for a rent payment determined as a percentage of the gross farm proceeds.  Revenue under leases providing for a payment equal to a percentage of the harvested crop or a percentage of the gross farm proceeds is recognized upon notification from the grain facility that grain has been delivered in the Company’s name or when the tenant has notified the Company of the total amount of gross farm proceeds.

Certain of the Company’s leases provide for minimum cash rent plus a bonus based on gross farm proceeds.  Revenue under this type of lease is recognized on a straight-line basis over the lease term based on the minimum cash rent.  Bonus rent is recognized upon notification from the tenant of the gross farm proceeds for the year.

Tenant reimbursements include reimbursements for real estate taxes that each tenant pays in accordance with the terms of its lease. When leases require that the tenant reimburse the Company for property taxes paid by the Company, the reimbursement is reflected as tenant reimbursement revenue on the statement of operations, as earned, and the related property tax as property operating expense, as incurred.  When a lease requires that the tenant pay the taxing authority, directly, the Company does not incur this cost.  When it becomes probable that a tenant will not be able to bear the property related costs the Company will accrue the estimated expense.

The Company records revenue from the sale of harvested crops when the harvested crop has been delivered to a grain facility and title has transferred.  Harvested crops delivered under marketing contracts are recorded using the fixed price of the marketing contract at the time of delivery to a grain facility.  Harvested crops delivered without a marketing contract are recorded using the market price at the date the harvested crop is delivered to the grain facility and title has transferred.

The Company recognizes interest income on notes receivable on an accrual basis over the life of the note.  Direct origination costs are netted against loan origination fees and are amortized over the life of the note using the straight-line method, which approximates the effective interest method, as an adjustment to interest income which is included in operating revenue as a component of other income in the Company’s Combined Consolidated Statements of Operations for the three and nine months ended September 30, 2015.

Income Taxes

As a REIT, the Company is permitted to deduct dividends paid to its stockholders, thereby eliminating the U.S. federal taxation of income represented by such distributions at the Company level, provided certain requirements are met. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates. 

The Operating Partnership leases certain of its farms to the TRS, which is subject to federal and state income taxes.  The TRS accounts for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective income tax bases and for operating loss, capital loss and tax credit carryforwards based on enacted income tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.  At September 30, 2015, the Company did not have any deferred tax assets or liabilities.

The Company performs an annual review for any uncertain tax positions and, if necessary, will record future tax consequences of uncertain tax positions in the financial statements.  At September 30, 2015, the Company did not identify any uncertain tax positions.

When the Company acquires a property in a business combination, the Company evaluates such acquisition for any related deferred tax assets or liabilities and determines if a deferred tax asset or liability should be recorded in conjunction with the purchase price allocation.  If a built-in gain is acquired, the Company evaluates the required holding period (generally 5-10 years) and determines if it has the ability and intent to hold the underlying assets for the necessary holding period.  If the Company has the ability to hold the underlying assets for the required holding period, no deferred tax liability is recorded with respect to the built-in gain.

Derivatives and Hedge Accounting

The Company enters into marketing contracts to sell commodities.  Derivatives and hedge accounting guidance requires a company to evaluate these contracts to determine whether the contracts are derivatives.  Certain contracts that meet the definition of a derivative may be exempt from derivative accounting if designated as normal purchase or normal sales.  The Company evaluates all contracts at inception to determine if they are derivatives and if they meet the normal purchase and normal sale designation requirements.  All contracts entered into in the three and nine months ended September 30, 2015 met the criteria to be exempt from derivative accounting and have been designated as normal purchase and sales exceptions for hedge accounting.

Segment Reporting

The Company’s chief operating decision maker does not evaluate performance on a farm-specific or transactional basis and does not distinguish the Company’s principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP.

Earnings Per Share

Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the weighted average number of unvested restricted shares (“participating securities” as defined in Note 9).  Diluted earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities such as stock grants or shares that would be issued in the event that OP units are redeemed for shares of common stock of the Company.  No adjustment is made for shares that are anti-dilutive during a period.

Non-controlling Interests

The Company’s non-controlling interests are interests in the Operating Partnership not owned by the Company.  The Company evaluates whether non-controlling interests are subject to redemption features outside of its control. The Company classifies non-controlling interests that are contingently redeemable solely for cash (unless shareholder approval is obtained to redeem for shares of common stock) one year after issuance or deemed probable to eventually become redeemable and which have redemption features outside of our control, as redeemable non-controlling interests in the mezzanine section of its combined consolidated balance sheets.  The Company has elected to accrete the change in redemption value subsequent to issuance and during the respective twelve-month holding period, after which point the units will be marked to redemption value at each reporting period. The majority of the Company’s non-controlling interests, which are redeemable for cash or shares of the Company’s common stock, at the Company’s option, are reported in the equity section of the Company’s combined consolidated balance sheets. The amounts reported for non-controlling interests on the Company’s combined consolidated statements of operations represent the portion of income or losses not attributable to the Company.

Stock Based Compensation

From time to time, the Company may award non-vested shares under the Company’s Amended and Restated 2014 Equity Incentive Plan as compensation to officers, employees, non-employee directors and non-employee consultants (see “Note 9 – Stockholders’ Equity and Non-controlling Interests”).  The shares issued to officers, employees, and non-employee directors vest over a period of time as determined by the Board of Directors at the date of grant.  The Company recognizes compensation expense for non-vested shares granted to officers, employees and non-employee directors on a straight-line basis over the requisite service period based upon the fair market value of the shares on the date of grant, as adjusted for forfeitures.  When an unvested award is forfeited, the Company recognizes compensation expense for dividends paid on the unvested award.  The Company recognizes expense related to non-vested shares granted to non-employee consultants over the period that services are received.  The change in fair value of the shares to be issued upon vesting is remeasured at each reporting period and is recorded in general and administrative expenses on the combined consolidated statement of operations.  During the nine months ended September 30, 2015, the Company recorded a decrease in stock based compensation related to non-employee share awards of $31,739, as a result of a change in fair value of the unvested shares.

New or Revised Accounting Standards Not Yet Effective

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2015-03,Simplifying the Presentation of Debt Issuance Costs.  ASU 2015-03 requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge asset. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2015-03.  The Company had unamortized deferred financing fees of $424,434 and $364,893 as of September 30, 2015 and December 31, 2014, respectively.  These costs have been reclassified from deferred financing fees to mortgage notes and bonds payable.  All periods presented have been retroactively adjusted.

The following table summarizes the retroactive adjustment and the overall impact on the previously reported combined consolidated financial statements:

	December 31, 2014
	As previously reported		Retroactive Application
Deferred finance fees, net	$	364,893	$	—
Mortgage notes and bonds payable, net	$	113,878,300	$	113,513,407

In August 2015, the FASB issued ASU No. 2015-15,Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements— Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting which clarified that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement.  We have assessed the impact of ASU 2015-15 and it does not have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-15 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted.

In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, pertaining to entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Any adjustments should be calculated as if the accounting had been completed at the acquisition date. We are currently assessing the impact of ASU 2015-16 and do not expect it to have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-16 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted.

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Commitments and Contingencies (Details)		1 Months Ended		9 Months Ended
	Jun. 02, 2015 USD ($) a	Oct. 31, 2015 USD ($) a	Apr. 30, 2015 USD ($) item $ / bu	Sep. 30, 2015 USD ($) a	Sep. 30, 2014 USD ($) a	Aug. 24, 2015 USD ($)	Mar. 16, 2015 a
Farms acquired and allocation of purchase price
Number of bushels of corn | item			25,000
Price per bushel | $ / bu			3.98
Total approximate acres | a				24,709	16,978		563
Purchase price				$ 133,501,847	$ 35,890,805
Future minimum lease payments
Initial monthly payment			$ 10,032
Remaining 3 months in 2015				30,098
2016				121,560
2017				123,567
2018				125,574
2019				74,073
Total future minimum lease payments				474,872
Promissory Note Agreement
Farms acquired and allocation of purchase price
Maximum capacity of receivables						$ 2,000,000
Principal amounts				1,800,000
Remaining notes receivables				$ 200,000
Farm acquisitions | Expected | Subsequent event
Farms acquired and allocation of purchase price
Total approximate acres | a		24,399
Purchase price		$ 202,180,071
Farm acquisitions | Justice Farms
Farms acquired and allocation of purchase price
Total approximate acres | a	14,935
Purchase price	$ 80,913,167
Purchase agreement | Subsequent event
Farms acquired and allocation of purchase price
Total approximate acres | a		1,229
Purchase price		$ 4,986,775
Purchase agreement | Herrmann | Nebraska | Subsequent event
Farms acquired and allocation of purchase price
Total approximate acres | a		160
Purchase price		$ 1,288,000
Purchase agreement | Mobley | Georgia | Subsequent event
Farms acquired and allocation of purchase price
Total approximate acres | a		1,069
Purchase price		$ 3,698,775

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies.

Schedule of future minimum lease payments

As of September 30, 2015, future minimum lease payments are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	30,098
2016		121,560
2017		123,567
2018		125,574
2019		74,073
	$	474,872

Schedule of purchase agreements

During the third quarter of 2015, the Company entered into purchase agreements with unrelated third-parties to acquire the following farms, which had not closed as of September 30, 2015:

		Total
		approximate
Farm Name	County	acres	Purchase price
Herrmann	Polk, NE	160	$	1,288,000
Mobley	Telfair, GA	1,069		3,698,775
		1,229	$	4,986,775

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Stockholders' Equity and Non-controlling Interests (Details) - USD ($)		9 Months Ended
	Jul. 21, 2015	Sep. 30, 2015
Increase (decrease) in shareholders' equity
Balance		$ 83,525,840
Net income (loss)		752,483
Proceeds from Underwritten public offering, net of offering costs of $471,189 and underwriters discount of $1,848,000.		34,640,811
Share repurchase and cancellation		(20,932)
Forfeiture of unvested restricted stock		(9,773)
Stock based compensation		718,476
Dividend accrued or paid		(4,596,277)
Issuance of stock as consideration in real estate acquisition		9,756,389
Adjustment to arrive at fair value of redeemable non-controlling interest		(36,053)
Balance		139,667,951
Operating Partnership
Increase (decrease) in shareholders' equity
Issuance of stock as consideration in real estate acquisition		14,936,987
Common stock
Increase (decrease) in shareholders' equity
Balance		$ 75,175
Balance (in shares)		7,731,755
Proceeds from Underwritten public offering, net of offering costs of $471,189 and underwriters discount of $1,848,000.		$ 33,600
Public offering (in shares)		3,360,000
Share repurchase and cancellation		$ (21)
Share repurchase and cancellation (in shares)		2,130
Grant of unvested restricted stock		6,169
Forfeiture of unvested restricted stock (in shares)		(3,214)
Issuance of stock as consideration in real estate acquisition		$ 8,880
Issuance of stock as consideration in real estate acquisition (in shares)		887,979
Balance		$ 117,634
Balance (in shares)		11,980,559
Common stock | Public offering
Increase (decrease) in shareholders' equity
Public offering (in shares)	3,000,000
Additional Paid-in Capital
Increase (decrease) in shareholders' equity
Balance		$ 68,980,437
Proceeds from Underwritten public offering, net of offering costs of $471,189 and underwriters discount of $1,848,000.		34,607,211
Share repurchase and cancellation		(20,911)
Forfeiture of unvested restricted stock		(9,773)
Stock based compensation		718,476
Issuance of stock as consideration in real estate acquisition		9,747,509
Adjustment to arrive at fair value of redeemable non-controlling interest		(36,053)
Allocation of non-controlling interest in Operating Partnership		808,995
Balance		114,795,891
Additional Paid-in Capital | Public offering
Increase (decrease) in shareholders' equity
Offering costs		471,189
Underwriters discount		1,848,000
Retained Earnings (Deficit)
Increase (decrease) in shareholders' equity
Balance		(568,192)
Net income		574,503
Balance		6,311
Distributions in Excess of Earnings
Increase (decrease) in shareholders' equity
Balance		(2,130,218)
Dividend accrued or paid		(3,530,796)
Balance		(5,661,014)
Non-controlling interest
Increase (decrease) in shareholders' equity
Balance		17,168,638
Net income		177,980
Dividend accrued or paid		(1,065,481)
Allocation of non-controlling interest in Operating Partnership		(808,995)
Balance		30,409,129
Non-controlling interest | Operating Partnership
Increase (decrease) in shareholders' equity
Issuance of stock as consideration in real estate acquisition		$ 14,936,987

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Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2015

Schedule of future minimum lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues or crops

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	7,242,070
2016		10,618,111
2017		5,838,791
2018		4,068,190
2019		15,441
	$	27,782,603

Subsequent event

Schedule of purchase agreements entered into in subsequent period

Subsequent to September 30, 2015, we entered into purchase agreements with unrelated third parties to acquire the following farms:

		Total
		approximate	Purchase
Farm Name	Location	acres	price
Knowles	Telfair, GA	608	$	1,200,000
Erker Wallace (2 farms)	Wallace, KS & Kit Carson, CO	1,217		1,915,200
Selph	Telfair, GA	116		526,300
Kosch	Butler, NE	80		726,710
Forsythe (120 farms) (2)	(1)	22,300		197,000,000
Howe	McDonough, IL	78		811,861
		24,399	$	202,180,071

(1) The Forsythe farms are located in Edgar, Clark, Coles, Crawford, Douglas, Vermilion & Cumberland counties, IL.

(2) Purchase price is estimated and consists of (a) $50,000,000 in cash, (b) an aggregate of 2,608,695 of OP units and shares of the Company’s common stock to be issued to the seller at closing at a value of $11.50 per OP Unit or share of Common Stock, and (c) 117,000 Series A Preferred units of limited partnership interest in the Operating Partnership, which will be issued at closing.

Schedule of future minimum lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues or crops

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	5,471,084
2016		12,055,346
2017		6,285,216
2018		4,068,190
2019		15,441
	$	27,895,277

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Revenue Recognition

9 Months Ended

Sep. 30, 2015

Revenue Recognition

Revenue Recognition

Note 2—Revenue Recognition

The Company typically receives one lease payment per year from tenants either during the first quarter of the year or at the time of acquisition of the related farm.  As such, the rental income received is recorded on a straight-line basis over the lease term.  Payments received in advance are included in deferred revenue until they are earned.  As of September 30, 2015, the Company had $7,383,186 in deferred revenue, $3,475,965 of which will be recognized during the remainder of the fiscal year ending December 31, 2015, as a result of straight-lining advance payments.  Unamortized below market leases as of September 30, 2015 were $107,712 and are included in deferred revenue. As of December 31, 2014, the Company had $1,364,737 in deferred revenue. 

The following represents a summary of the cash rent received during the three and nine months ended September 30, 2015 and 2014 and the rental income recognized for the three and nine months ended September 30, 2015 and 2014:

	Cash rent received								Rental income recognized
	For the three months ended				For the nine months ended				For the three months ended				For the nine months ended
	September 30,				September 30,				September 30,				September 30,
	2015		2014		2015		2014		2015		2014		2015		2014
Leases in effect at the beginning of the year	$	—	$	42,537	$	5,505,082	$	2,551,664	$	1,776,734	$	678,391	$	5,363,933	$	1,950,098
Leases entered into during the year		763,820		65,000		8,542,662		1,677,847		2,270,489		510,975		3,501,601		576,087
	$	763,820	$	107,537	$	14,047,744	$	4,229,511	$	4,047,223	$	1,189,366	$	8,865,534	$	2,526,185

Future minimum lease payments from tenants under all non-cancelable leases in place as of September 30, 2015, including lease advances, when contractually due, but excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues, for the remainder of 2015 and each of the next four years as of September 30, 2015 are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	7,242,070
2016		10,618,111
2017		5,838,791
2018		4,068,190
2019		15,441
	$	27,782,603

Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only.

On November 6, 2015, the Company amended two leases with its largest tenant to modify the payment schedule for certain rental payments and increase the tenant rent due for the 2016 calendar year.  See Note 10 for additional information regarding the lease amendment and the impact on future cash rents.

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Combined Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Combined Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	11,982,689	7,731,755
Common stock, shares outstanding	11,980,559	7,731,755

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Organization and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2015

Organization and Significant Accounting Policies

Schedule of estimated useful lives of assets classified as improvements

	Years
Grain facilities	10	-	40
Irrigation improvements	2	-	40
Drainage improvements	27	-	65
Groundwater	3	-	50
Permanent plantings			23
Other	5	-	40

Schedule of Inventory

	September 30, 2015
Growing crop	$	193,278
Fertilizer and pesticides		6,086
	$	199,364

Schedule of retroactive adjustment and the overall impact on the previously reported combined consolidated financial statements

	December 31, 2014
	As previously reported		Retroactive Application
Deferred finance fees, net	$	364,893	$	—
Mortgage notes and bonds payable, net	$	113,878,300	$	113,513,407

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 11, 2015
Document and Entity Information
Entity Registrant Name	Farmland Partners Inc.
Entity Central Index Key	0001591670
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		11,982,689
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2015

Revenue Recognition

Summary of cash rent received and rental income recognized

	Cash rent received								Rental income recognized
	For the three months ended				For the nine months ended				For the three months ended				For the nine months ended
	September 30,				September 30,				September 30,				September 30,
	2015		2014		2015		2014		2015		2014		2015		2014
Leases in effect at the beginning of the year	$	—	$	42,537	$	5,505,082	$	2,551,664	$	1,776,734	$	678,391	$	5,363,933	$	1,950,098
Leases entered into during the year		763,820		65,000		8,542,662		1,677,847		2,270,489		510,975		3,501,601		576,087
	$	763,820	$	107,537	$	14,047,744	$	4,229,511	$	4,047,223	$	1,189,366	$	8,865,534	$	2,526,185

Schedule of future minimum lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues or crops

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	7,242,070
2016		10,618,111
2017		5,838,791
2018		4,068,190
2019		15,441
	$	27,782,603

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Combined Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
OPERATING REVENUES:
Rental income (See Note 2)	$ 4,047,223	$ 1,189,366	$ 8,865,534	$ 2,526,185
Tenant reimbursements	104,002	61,283	272,902	188,910
Other revenue	17,926	11,405	17,926	19,008
Total operating revenues	4,169,151	1,262,054	9,156,362	2,734,103
OPERATING EXPENSES
Depreciation and depletion	237,241	100,208	613,381	209,472
Property operating expenses	337,902	65,069	797,525	174,598
Acquisition and due diligence costs	111,908	42,602	179,468	103,525
General and administrative expenses	1,111,586	645,962	2,975,628	1,466,263
Legal and accounting	216,090	87,192	646,632	243,192
Total operating expenses	2,014,727	941,033	5,212,634	2,197,050
OPERATING INCOME	2,154,424	321,021	3,943,728	537,053
OTHER (INCOME) EXPENSE:
Other income	(98,366)		(98,366)
Interest expense	1,390,880	286,216	3,232,094	909,326
Total other expense	1,292,514	286,216	3,133,728	909,326
Net income (loss) before income tax expense	861,910	34,805	810,000	(372,273)
Income tax expense	4,400		4,400
NET INCOME (LOSS)	857,510	34,805	805,600	(372,273)
Net (income) loss attributable to non-controlling interests in operating partnership	(184,215)	(7,154)	(177,980)	41,641
Net income attributable to redeemable non-controlling interests in operating partnership	(49,428)		(53,117)
Net income (loss) attributable to the Company	623,867	27,651	574,503	(330,632)
Nonforfeitable dividends allocated to unvested restricted shares	(18,727)	(22,500)	(61,935)	(45,000)
Dividends on redeemable non-controlling interests in operating partnership	(112,675)		(225,350)
Net income (loss) available to common stockholders of Farmland Partners Inc.	$ 492,465	$ 5,151	$ 287,218	$ (375,632)
Basic and diluted per common share data:
Basic net income (loss) available to common stockholders (in dollars per share)	$ 0.04	$ 0.00	$ 0.03	$ (0.12)
Diluted net income (loss) available to common stockholders (in dollars per share)	$ 0.04	$ 0.00	$ 0.03	$ (0.12)
Basic weighted average common shares outstanding (in shares)	11,154,127	6,305,253	8,872,279	3,168,803
Diluted weighted average common shares outstanding (in shares)	11,158,280	6,309,584	8,882,102	3,168,803

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Mortgage Notes and Bonds Payable

9 Months Ended

Sep. 30, 2015

Mortgage Notes and Bonds Payable

Mortgage Notes and Bonds Payable

Note 7—Mortgage Notes and Bonds Payable

As of September 30, 2015 and December 31, 2014, the Company had the following indebtedness outstanding:

											Book
			Annual								Value of
			Interest								Collateral
			Rate as of	Principal Outstanding as of							as of
Loan	Payment Terms	Interest Rate Terms	September 30, 2015	September 30, 2015			December 31, 2014			Maturity	September 30, 2015
First Midwest Bank	Annual principal / quarterly interest	Greater of LIBOR + 2.59%  and 2.80%	2.80%	$	650,000	(1)	$	754,000	(1)	June 2016	$	1,143,333	(2)
First Midwest Bank	Annual principal / quarterly interest	Greater of LIBOR + 2.59%  and 2.80%	2.80%		26,000,000	(1)		30,000,000	(1)	March 2016		24,020,052	(3)
Farmer Mac Bond #1	Semi-annual interest only	2.40%	2.40%		20,700,000			20,700,000		September 2017		30,315,923
Farmer Mac Bond #2	Semi-annual interest only	2.35%	2.35%		5,460,000			5,460,000		October 2017		9,005,272
Farmer Mac Bond #3	Semi-annual interest only	2.50%	2.50%		10,680,000			10,680,000		November 2017		10,703,039
Farmer Mac Bond #4	Semi-annual interest only	2.50%	2.50%		13,400,000			13,400,000		December 2017		23,553,538
Farmer Mac Bond #5	Semi-annual interest only	2.56%	2.56%		30,860,000			30,860,000		December 2017		52,800,877
Farmer Mac Bond #6	Semi-annual interest only	3.69%	3.69%		14,915,000			—		April 2025		20,100,764
Farmer Mac Bond #7	Semi-annual interest only	3.68%	3.68%		11,160,000			—		April 2025		18,188,079
Farmer Mac Bond #8A	Semi-annual interest only	3.20%	3.20%		41,700,000			—		June 2020		80,889,774	(4)
Farmer Mac Bond #8B	(5)	Libor + 1.80%	2.00%		8,100,000			—		May 2016		—	(4)
Farmer Mac Bond #9	Semi-annual interest only	3.35%	3.35%		6,600,000			—		July 2020		8,745,401
Tindall	Principal at maturity	0.00%	—		—			1,180,800		January 2015		—
Tindall	Principal at maturity	0.00%	—		—			563,500		January 2015		—
Beck	Principal at maturity	0.00%	—		—			280,000		January 2015		—
Total outstanding principal					190,225,000			113,878,300			$	279,466,052
Debt issuance costs					(424,434)			(364,893)
Unamortized premium					260,241			—
Total mortgage notes and bonds payable, net				$	190,060,807		$	113,513,407

(1) Messrs. Pittman and Hough unconditionally agreed to jointly and severally guarantee $11,000,000.

(2) The book value of collateral as of December 31, 2014 was $1,073,167.

(3) The book value of collateral as of December 31, 2014 was $26,410,132.

(4) The $8,100,000 bond is cross collateralized with the $41,700,000 bond.

(5) Bond is an amortizing loan with monthly principal payments that commenced on October 2, 2015 and monthly interest payments that commenced on July 2, 2015 with all remaining principal and outstanding interest due at maturity.

First Midwest Bank Indebtedness

On April 16, 2014, the Company repaid $6,529,237 of secured mortgage debt and made a partial repayment of the First Midwest Bank debt of $4,749,900 with a portion of the net proceeds from the IPO.  On March 24, 2014, Pittman Hough Farms made a contractual debt payment of $766,000 on the First Midwest Bank debt, which the Company reimbursed on April 16, 2014 with a portion of the net proceeds from the IPO.  The Company did not incur any early termination fees or fees related to the partial repayment.  In conjunction with the repayments, the Company wrote off $26,929 in unamortized debt issuance costs.

On April 16, 2014, the Operating Partnership, as borrower, and First Midwest Bank, as lender, entered into the Amended and Restated Business Loan Agreement (as amended, the “Loan Agreement”), which provides for loans in the aggregate principal amount of approximately $30,780,000. The Company incurred $135,340 in debt issuance costs related to the modification of the loan.  In connection with the Loan Agreement, PH Farms LLC and Cottonwood Valley Land, LLC, which are wholly owned subsidiaries of the Operating Partnership, unconditionally agreed to guarantee all of the obligations of the Operating Partnership under the Loan Agreement. In addition, Messrs. Pittman and Hough unconditionally agreed to jointly and severally guarantee $11,000,000 of the Operating Partnership’s obligations under the Loan Agreement.  In conjunction with the modification, other than combining the two First Midwest Bank notes into one master note with two tranches, no other material terms were modified.

On February 24, 2015, the Company amended the Loan Agreement to revise the financial covenants under the Loan Agreement and repaid $3,078,000 of the First Midwest Bank debt.  The Company did not incur any prepayment penalties in conjunction with the repayment.

The collateral for the Company’s indebtedness under the Loan Agreement consists of real estate and related farm rents, including farms, grain facilities and any other improvements present on such real estate.

The Loan Agreement includes standard acceleration clauses triggered by default under certain provisions of the note.

Under the Loan Agreement, the Company is subject to ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including a maximum leverage ratio of 0.60 to 1.00 and a minimum fixed charge coverage ratio of 1.5 to 1.00.  Each covenant is measured annually as of December 31st of each year.  Additionally, the Company is required to maintain a minimum cash account balance of $500,000 during the term of the agreement.   The Company was in compliance with all applicable covenants at September 30, 2015.

Farmer Mac Facility

The Company and the Operating Partnership are parties to a bond purchase agreement (as amended or amended and restated from time to time, the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of Farmer Mac, as bond purchaser (the “Purchaser”), regarding a secured note purchase facility (the “Farmer Mac Facility”) that has a maximum borrowing capacity of $165,000,000.  Pursuant to the Bond Purchase Agreement, the Operating Partnership may, from time to time, issue one or more bonds to the Purchaser that will be secured by pools of mortgage loans, which will, in turn, be secured by first liens on agricultural real estate owned by the Company. The mortgage loans may have effective loan-to-value ratios of up to 60%, after giving effect to the overcollateralization obligations described below.  Prepayment of each bond issuance is not permitted unless otherwise agreed upon by all parties to the Bond Purchase Agreement.

As of September 30, 2015, the Operating Partnership had $163,575,000 outstanding under the Farmer Mac Facility and had $1,425,000 of remaining capacity, subject to availability of qualifying collateral.  As of September 30, 2015, the Operating Partnership had $17,980,500 in real property valued according to the criteria set forth in the agreement with Farmer Mac, which could be collateralized against the Farmer Mac Facility, resulting in $1,425,000 in available borrowing capacity based on an effective loan to value of 60%.

The Operating Partnership’s ability to borrow under the Farmer Mac Facility is subject to the Company’s ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including: a maximum leverage ratio of not more than 60%; a minimum fixed charge coverage ratio of 1.5 to 1.00; and a minimum tangible net worth of $96,312,017. The Company was in compliance with all applicable covenants at September 30, 2015.

In connection with the Bond Purchase Agreement, on August 22, 2014, the Company and the Operating Partnership also entered into a pledge and security agreement (as amended and restated, the “Pledge Agreement”) in favor of the Purchaser and Farmer Mac, pursuant to which the Company and the Operating Partnership agreed to pledge, as collateral for the Farmer Mac Facility, all of their respective right, title and interest in (i) mortgage loans with a value at least equal to 100% of the aggregate principal amount of the outstanding bonds held by the Purchaser and (ii) such additional collateral as necessary to have total collateral with a value at least equal to 110% of the outstanding bonds held by the Purchaser. In addition, the Company agreed to guarantee the full performance of the Operating Partnership’s duties and obligations under the Pledge Agreement.

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.

On June 2, 2015, Farmer Mac issued a refund under the bonds issued during 2014 of $300,000.  The refund is being accounted for as a debt premium and is being amortized using the straight-line method over the remaining terms of the underlying bonds issued in 2014.

On July 1, 2015, the Operating Partnership issued a $6,600,000, interest-only bond under the Farmer Mac Facility. The bond has a five-year term and has a fixed interest rate of 3.35%.

Aggregate Maturities

As of September 30, 2015, aggregate maturities of long-term debt for the succeeding years are as follows:

Year Ending December 31,	Future Maturities
Remaining 3 months in 2015	$	3,000,000
2016		31,750,000
2017		81,100,000
2020		48,300,000
Thereafter		26,075,000
	$	190,225,000

Fair Value

FASB ASC 820-10 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

· Level 1—Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

· Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable or can be substantially corroborated for the asset or liability, either directly or indirectly.

· Level 3—Inputs to the valuation methodology are unobservable, supported by little or no market activity and are significant to the fair value measurement.

The fair value of the mortgage notes payable is valued using Level 3 inputs under the hierarchy established by GAAP and is calculated based on a discounted cash flow analysis, using interest rates based on management’s estimates of market interest rates on long-term debt with comparable terms whenever the interest rates on the mortgage notes payable are deemed not to be at market rates. As of September 30, 2015 and December 31, 2014, the fair value of the mortgage notes payable was $190,251,936 and $113,649,531, respectively.

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Note Receivable

9 Months Ended

Sep. 30, 2015

Note Receivable

Note Receivable

Note 6—Note Receivable

In August 2015, the Company announced the launch of the FPI Loan Program, an agricultural lending product aimed at farmers, as a complement to the Company's current business of acquiring and owning farmland and leasing it to farmers.  Under the FPI Loan Program, the Company intends to make loans to third-party farmers (both tenant and non-tenant) to provide partial financing for working capital requirements and operational farming activities, farming infrastructure projects, and for other farming and agricultural real estate related projects. These loans are expected to be collateralized by farm real estate and are expected to be in principal amounts ranging from $500,000 to $5,000,000 at fixed interest rates with maturities of up to three years. The Company expects the borrower to repay the loans in accordance with the loan agreements based on farming operations and access to other forms of capital, as permitted.

On August 24, 2015, the Company entered into a promissory note agreement with a third-party non-tenant farmer to provide up to $2,000,000 in the form of a term note.  As of September 30, 2015, $1,800,000 has been funded with the remaining $200,000 of funding subject to the satisfaction of customary lending requirements, including finalization and issuance of the title research and appraisal report.  The note has a fixed annual interest rate with principal and all accrued interest due at maturity on January 15, 2016.  Upfront commitment and origination fees of $40,000 were paid by the borrower, offset by $27,748 of origination costs incurred by the Company, and the net amount will be amortized over the life of the note.  The note is secured by a first mortgage on farm real estate.  As of September 30, 2015, the carrying value of the note receivable was $1,805,674, which was comprised of $1,800,000 of principal and $14,800 of accrued interest, and $9,126 of net origination fees. As of September 30, 2015, management considers the note receivable to be fully collectible; therefore, no allowance or reserve has been reflected in the financial statements.

Fair Value

The Company determined that the significant inputs used to value its note receivable fall within Level 2 of the fair value hierarchy. As of September 30, 2015, the Company believes the carrying amount of the note receivable approximates fair value because of the short-term maturity and market interest rate of the instrument.

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Stockholders' Equity and Non-controlling Interests (Tables)

9 Months Ended

Sep. 30, 2015

Stockholders' Equity and Non-Controlling Interests

Summary of changes in stockholders' equity

	Stockholders’ Equity
	Common Stock									Non-controlling
				Additional		Retained		Distributions		Interest in		Total
				Paid-in		Earnings		in Excess of		Operating		Stockholders’
	Shares	Par Value		Capital		(Deficit)		Earnings		Partnership		Equity
Balance at December 31, 2014	7,731,755	$	75,175	$	68,980,437	$	(568,192)	$	(2,130,218)	$	17,168,638	$	83,525,840
Net income	—		—		—		574,503		—		177,980		752,483
Proceeds from underwritten public offering, net of offering costs of $471,189 and underwriters discount of $1,848,000	3,360,000		33,600		34,607,211		—		—		—		34,640,811
Share repurchase and cancellation	(2,130)		(21)		(20,911)		—		—		—		(20,932)
Grant of unvested restricted stock	6,169		—		—		—		—		—		—
Forfeiture of unvested restricted stock	(3,214)		—		(9,773)		—		—		—		(9,773)
Stock based compensation	—		—		718,476		—		—		—		718,476
Dividends accrued or paid	—		—		—		—		(3,530,796)		(1,065,481)		(4,596,277)
Issuance of stock as consideration in real estate acquisition	887,979		8,880		9,747,509		—		—		—		9,756,389
Issuance of OP units as consideration in real estate acquisition	—		—		—		—		—		14,936,987		14,936,987
Adjustment to arrive at redemption value of redeemable non-controlling interest	—		—		(36,053)		—		—		—		(36,053)
Allocation of non-controlling interest in Operating Partnership	—		—		808,995		—		—		(808,995)		—
Balance at September 30, 2015	11,980,559	$	117,634	$	114,795,891	$	6,311	$	(5,661,014)	$	30,409,129	$	139,667,951

Schedule of changes in redeemable non-controlling interest in operating partnership

	Redeemable OP units	Redeemable non-controlling interests
Balance at December 31, 2014	—	$	—
Net income	—		53,117
Dividends accrued or paid	—		(225,350)
Issuance of redeemable OP units as partial consideration for asset acquisition	883,724		9,694,452
Adjustment to arrive at redemption value of redeemable non-controlling interest	—		36,053
Balance at September 30, 2015	883,724	$	9,558,272

Schedule of declaration and payment of distribution

Fiscal Year	Declaration Date	Record Date	Payment Date	Distribution per Common Share/OP unit
2014	May 14, 2014	July 1, 2014	July 15, 2014	$	0.1050
	August 5, 2014	October 1, 2014	October 15, 2014		0.1050
	November 20, 2014	January 2, 2015	January 15, 2015		0.1160
				$	0.3260
2015	February 25, 2015	April 1, 2015	April 15, 2015	$	0.1160
	June 2, 2015	July 1, 2015	July 15, 2015		0.1275
	August 12, 2015	October 1, 2015	October 15, 2015		0.1275
				$	0.3710

Summary of non-vested shares

		Weighted
	Number of	average grant
	shares	date fair value
Unvested at January 1, 2015	214,283	$	14.00
Granted	6,169		10.67
Vested	(70,356)		(14.00)
Forfeited	(3,214)		(14.00)
Unvested at September 30, 2015	146,882	$	13.86

Schedule of computation of basic and diluted earnings per share

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Numerator:
Net income (loss) attributable to Farmland Partners Inc.	$	623,867	$	27,651	$	574,503	$	(330,632)
Less: Dividends paid on unvested restricted shares		(18,727)		(22,500)		(61,935)		(45,000)
Less: Dividends paid on redeemable non-controlling interest		(112,675)		—		(225,350)		—
Net income (loss) attributable to common stockholders	$	492,465	$	5,151	$	287,218	$	(375,632)
Denominator:
Weighted-average number of common shares - basic and diluted		11,154,127		6,305,253		8,872,279		3,168,803
Unvested restricted shares (1)		4,153		4,331		9,823		—
Redeemable non-controlling interest (2)		—		—		—		—
Weighted-average number of common shares - diluted		11,158,280		6,309,584		8,882,102		3,168,803
Income (loss) per share attributable to common stockholders - basic	$	0.04	$	0.00	$	0.03	$	(0.12)
Income (loss) per share attributable to common stockholders - diluted	$	0.04	$	0.00	$	0.03	$	(0.12)

(1) Anti-dilutive for the nine months ended September 30, 2014.

(2) Anti-dilutive for the three and nine months ended September 30, 2015 and September 30, 2014.

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Concentration Risk (Tables)

9 Months Ended

Sep. 30, 2015

Tenant concentration

Concentration Risk

Summary of concentrations

	Rental income recognized
	For the three months ended								For the nine months ended
	September 30,								September 30,
	2015				2014				2015				2014
Astoria Farms	$	551,563	13.6	%	$	545,035	45.8	%	$	1,645,315	18.6	%	$	1,635,104	64.7	%
Hough Farms		133,442	3.3	%		73,675	6.2	%		390,437	4.4	%		221,025	8.7	%
Justice Family Farms LLC (1)		1,379,887	34.1	%		—	—	%		2,128,990	24.0	%		—	—	%
Hudye Farms tenant A (2)		201,740	5.0	%		201,740	17.0	%		605,221	6.8	%		217,174	8.6	%
	$	2,266,632			$	820,450			$	4,769,963			$	2,073,303

	Cash rent received
	For the three months ended								For the nine months ended
	September 30,								September 30,
	2015				2014				2015				2014
Astoria Farms	$	9,375	1.2	%	$	—	—	%	$	2,196,878	15.6	%	$	2,180,139	51.5	%
Hough Farms		—	—	%		—	—	%		528,824	3.8	%		294,700	7.0	%
Justice Family Farms LLC (1)		—	—	%		—	—	%		6,037,065	43.0	%		—	—	%
Hudye Farms tenant A (2)		—	—	%		—	—	%		677,612	4.8	%		677,612	16.0	%
	$	9,375			$	—			$	9,440,379			$	3,152,451

(1) The Justice farms were acquired in two separate transactions that closed on December 22, 2014 and June 2, 2015.

(2) Hudye Farms was acquired on June 12, 2014.

Geographic concentration

Concentration Risk

Summary of concentrations

					Rental income
	Approximate % of total acres				For the three months ended				For the nine months ended
	as of September 30,				September 30,				September 30,
Location of Farm	2015		2014		2015		2014		2015		2014
Illinois	8.3	%	23.6	%	14.3	%	47.3	%	19.3	%	66.8	%
Colorado	27.9	%	65.6	%	14.3	%	41.6	%	18.8	%	22.1	%
South Carolina	13.9	%	—	%	14.8	%	—	%	16.2	%	—	%
North Carolina	15.6	%	—	%	23.5	%	—	%	14.0	%	—	%
Nebraska	7.9	%	5.2	%	10.0	%	7.7	%	10.9	%	9.4	%
Arkansas	14.6	%	2.8	%	10.0	%	—	%	8.8	%	—	%
Mississippi	6.0	%	—	%	6.9	%	—	%	6.0	%	—	%
Louisiana	2.8	%	—	%	2.6	%	—	%	3.5	%	—	%
Virginia	1.7	%	—	%	2.6	%	—	%	1.6	%	—	%
Kansas	1.0	%	2.8	%	0.5	%	3.4	%	0.7	%	1.7	%
Michigan	0.3	%	—	%	0.5	%	—	%	0.2	%	—	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events

Subsequent Events

Note 10—Subsequent Events

See Note 8 for subsequent real estate acquisitions.

Subsequent to September 30, 2015, we entered into purchase agreements with unrelated third parties to acquire the following farms:

		Total
		approximate	Purchase
Farm Name	Location	acres	price
Knowles	Telfair, GA	608	$	1,200,000
Erker Wallace (2 farms)	Wallace, KS & Kit Carson, CO	1,217		1,915,200
Selph	Telfair, GA	116		526,300
Kosch	Butler, NE	80		726,710
Forsythe (120 farms) (2)	(1)	22,300		197,000,000
Howe	McDonough, IL	78		811,861
		24,399	$	202,180,071

(1) The Forsythe farms are located in Edgar, Clark, Coles, Crawford, Douglas, Vermilion & Cumberland counties, IL.

(2) Purchase price is estimated and consists of (a) $50,000,000 in cash, (b) an aggregate of 2,608,695 of OP units and shares of the Company’s common stock to be issued to the seller at closing at a value of $11.50 per OP Unit or share of Common Stock, and (c) 117,000 Series A Preferred units of limited partnership interest in the Operating Partnership, which will be issued at closing.

The above acquisitions are expected to close in the fourth quarter of 2015 and the first quarter of 2016, subject to the satisfaction of certain customary closing conditions.  There can be no assurance that these conditions will be satisfied or that the pending acquisitions will be consummated on the terms described herein, or at all.

On November 6, 2015, the Company amended two leases with its largest tenant to provide the following adjustments to the lease agreements: (i) modify the payment schedule for a prepayment of a portion of future rents for the calendar years 2016-2019, which was originally due in September 2015, and is now due under a revised payment schedule with the final payment due in April 2017, and (ii) to modify the payment schedule for the payment of the remaining calendar year rent due for 2016, which was originally due in December 2015, and is now due under a revised payment schedule with the final payment due in July 2016.  In addition to modifying the payment schedules under the two leases as noted above, we also increased the tenant rent due for the 2016 calendar year, which is included in the modified payment schedules.  

Adjusting for the impact of the above lease amendments, future minimum lease payments from tenants under all non-cancelable leases in place as of September 30, 2015, including lease advances, when contractually due, but excluding tenant reimbursement of expenses and lease payments based on a percentage of farming revenues, for the remainder of 2015 and each of the next four years as of September 30, 2015 are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	5,471,084
2016		12,055,346
2017		6,285,216
2018		4,068,190
2019		15,441
	$	27,895,277

Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies.

Commitments and Contingencies

Note 8—Commitments and Contingencies

The Company is not currently subject to any known material contingencies arising from its business operations, nor to any material known or threatened litigation.

In April 2015, FPI Agribusiness entered into a marketing contract to sell 25,000 bushels of corn at $3.98 per bushel, in the fourth quarter of 2015, to protect against the commodity pricing exposure from farming operations.  The contracts are accounted for using the normal purchase and sales exception for hedge accounting.

In April 2015, the Company entered into a lease agreement for office space.  The lease expires July 31, 2019.  The lease commenced June 1, 2015 and has an initial monthly payment of $10,032.  As of September 30, 2015, future minimum lease payments are as follows:

	Future rental
Year Ending December 31,	payments
Remaining 3 months in 2015	$	30,098
2016		121,560
2017		123,567
2018		125,574
2019		74,073
	$	474,872

A sale of any of the Contributed Properties that would not provide continued tax deferral to Pittman Hough Farms is contractually restricted until the fifth (with respect to certain properties) or seventh (with respect to certain other properties) anniversary of the completion of the formation transactions. Furthermore, if any such sale or defeasance is foreseeable, the Company is required to notify Pittman Hough Farms and to cooperate with it in considering strategies to defer or mitigate the recognition of gain under the Code by any of the equity interest holders of the recipient of the OP units.

On August 24, 2015, the Company entered into a promissory note agreement with a third-party non-tenant farmer to provide up to $2,000,000 in the form of a term note.  As of September 30, 2015, $1,800,000 has been funded with the remaining $200,000 of funding subject to the satisfaction of customary lending requirements, including finalization and issuance of the title research and appraisal report.

During the third quarter of 2015, the Company entered into purchase agreements with unrelated third-parties to acquire the following farms, which had not closed as of September 30, 2015:

		Total
		approximate
Farm Name	County	acres	Purchase price
Herrmann	Polk, NE	160	$	1,288,000
Mobley	Telfair, GA	1,069		3,698,775
		1,229	$	4,986,775

Subsequent to September 30, 2015, the Company completed the Herrmann and Mobley farm acquisitions for cash. The Company will account for both acquisitions as business combinations.  The initial accounting for the Herrmann and Mobley farms are not yet complete, making certain disclosures unavailable at this time.

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Stockholders' Equity and Non-controlling Interests

9 Months Ended

Sep. 30, 2015

Stockholders' Equity and Non-Controlling Interests

Stockholders' Equity and Non-Controlling Interests

Note 9—Stockholders’ Equity and Non-controlling Interests

The following table summarizes the changes in our stockholders’ equity for the nine months ended September 30, 2015:

	Stockholders’ Equity
	Common Stock									Non-controlling
				Additional		Retained		Distributions		Interest in		Total
				Paid-in		Earnings		in Excess of		Operating		Stockholders’
	Shares	Par Value		Capital		(Deficit)		Earnings		Partnership		Equity
Balance at December 31, 2014	7,731,755	$	75,175	$	68,980,437	$	(568,192)	$	(2,130,218)	$	17,168,638	$	83,525,840
Net income	—		—		—		574,503		—		177,980		752,483
Proceeds from underwritten public offering, net of offering costs of $471,189 and underwriters discount of $1,848,000	3,360,000		33,600		34,607,211		—		—		—		34,640,811
Share repurchase and cancellation	(2,130)		(21)		(20,911)		—		—		—		(20,932)
Grant of unvested restricted stock	6,169		—		—		—		—		—		—
Forfeiture of unvested restricted stock	(3,214)		—		(9,773)		—		—		—		(9,773)
Stock based compensation	—		—		718,476		—		—		—		718,476
Dividends accrued or paid	—		—		—		—		(3,530,796)		(1,065,481)		(4,596,277)
Issuance of stock as consideration in real estate acquisition	887,979		8,880		9,747,509		—		—		—		9,756,389
Issuance of OP units as consideration in real estate acquisition	—		—		—		—		—		14,936,987		14,936,987
Adjustment to arrive at redemption value of redeemable non-controlling interest	—		—		(36,053)		—		—		—		(36,053)
Allocation of non-controlling interest in Operating Partnership	—		—		808,995		—		—		(808,995)		—
Balance at September 30, 2015	11,980,559	$	117,634	$	114,795,891	$	6,311	$	(5,661,014)	$	30,409,129	$	139,667,951

On July 21, 2015, the Company completed an underwritten public offering, pursuant to which the Company sold 3,000,000 shares of common stock, and upon the underwriter’s exercise of their over-allotment option, issued an additional 360,000 shares at a price per share of $11.00 and generated gross proceeds of $36,960,000.  The aggregate net proceeds to the Company, after deducting the underwriting discount and commissions and expenses payable by the Company, were $34,640,811.

On September 15, 2015, the Company filed a prospectus supplement under which it may sell shares of common stock having an aggregate gross sales price of up to $25,000,000 through an “at-the-market” equity offering program.  The offering is made pursuant to a shelf registration statement on Form S-3 that was declared effective by the Securities and Exchange Commission on May 14, 2015.  As of September 30, 2015, no shares had been issued under the program.

As of September 30, 2015, the Company had16,157,855fully diluted outstanding shares, including OP units, redeemable OP units and restricted shares of common stock.

Non-controlling Interests in Operating Partnership

The Company consolidates its Operating Partnership, a majority owned partnership. As of September 30, 2015, the Company owned 74.1% of the outstanding OP units and the remaining 25.9% of the OP units are included in non-controlling interest in Operating Partnership on the balance sheet.

On or after 12 months after becoming a holder of OP units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for a cash amount equal to the number of tendered units multiplied by the fair market value of a share of the Company’s common stock (determined in accordance with, and subject to adjustment under, the terms of the partnership agreement of the Operating Partnership), unless the terms of such units or a separate agreement entered into between the Operating Partnership and the holder of such units provide that they do not have a right of redemption or provide for a shorter or longer period before such holder may exercise such right of redemption or impose conditions on the exercise of such right of redemption. On or before the close of business on the tenth business day after the Company receives a notice of redemption, the Company may, as the parent of the general partner, in its sole and absolute discretion, but subject to the restrictions on the ownership of common stock imposed under the Company’s charter and the transfer restrictions and other limitations thereof, elect to acquire some or all of the tendered units in exchange for cash or shares of the Company’s common stock, based on an exchange ratio of one share of common stock for each OP unit (subject to anti-dilution adjustments provided in the partnership agreement).  As of September 30, 2015, there were 1,945,000 outstanding OP units eligible for redemption.

If the Company gives the limited partners notice of its intention to make an extraordinary distribution of cash or property to its stockholders or effect a merger, a sale of all or substantially all of its assets, or any other similar extraordinary transaction, each limited partner may exercise its right to redeem its OP units, regardless of the length of time such limited partner has held its OP units.

Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP units for shares of common stock.  When a unitholder redeems an OP unit, non-controlling interest in the Operating Partnership is reduced and stockholders’ equity is increased.

The Operating Partnership intends to make distributions on each OP unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP units held by the Company being utilized to make distributions to the Company’s common stockholders.

Pursuant to the consolidation accounting standard with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions.  The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent.  Accordingly, as a result of the issuance of stock compensation, common stock and OP units issued as partial consideration for certain acquisitions, which caused changes in the ownership percentages between the Company’s stockholders’ equity and non-controlling interest in the Operating Partnership which occurred during the nine months ended September 30, 2015, the Company has decreased non-controlling interests in the Operating Partnership and increased additional paid in capital by $808,995 during the nine months ended September 30, 2015.

Redeemable Non-controlling Interest in Operating Partnership

On June 2, 2015, the Company issued 1,993,709 OP units in conjunction with an asset acquisition.  Beginning twelve months after issuance, the OP units may be tendered for redemption for cash, or at the Company’s option, into shares of common stock on a one for one basis up to a maximum of 1,109,985 shares of common stock.  The remaining 883,724 OP units (the “Excess Units”) may be redeemed only for cash, unless the Company obtains stockholder approval to redeem such Excess Units with shares of its common stock.

As the tender for redemption of the Excess Units for cash is outside of the control of the Company, these units are accounted for as temporary equity on the combined consolidated balance sheets.  The Company has elected to accrete the change in redemption value subsequent to issuance and during the respective twelve-month holding period, after which point the units will be marked to redemption value at each reporting period.   The Company recorded the initial redemption value of the Excess Units on date of issue as $9,694,452.  The redemption value of the Excess Units at September 30, 2015 was $9,279,102.

The following table summarizes the changes in our redeemable non-controlling interest in the Operating Partnership for the nine months ended September 30, 2015:

	Redeemable OP units	Redeemable non-controlling interests
Balance at December 31, 2014	—	$	—
Net income	—		53,117
Dividends accrued or paid	—		(225,350)
Issuance of redeemable OP units as partial consideration for asset acquisition	883,724		9,694,452
Adjustment to arrive at redemption value of redeemable non-controlling interest	—		36,053
Balance at September 30, 2015	883,724	$	9,558,272

Distributions

The Company’s Board of Directors declared and paid the following distributions to common stockholders and holders of OP units for the year ended December 31, 2014 and the nine months ended September 30, 2015:

Fiscal Year	Declaration Date	Record Date	Payment Date	Distribution per Common Share/OP unit
2014	May 14, 2014	July 1, 2014	July 15, 2014	$	0.1050
	August 5, 2014	October 1, 2014	October 15, 2014		0.1050
	November 20, 2014	January 2, 2015	January 15, 2015		0.1160
				$	0.3260
2015	February 25, 2015	April 1, 2015	April 15, 2015	$	0.1160
	June 2, 2015	July 1, 2015	July 15, 2015		0.1275
	August 12, 2015	October 1, 2015	October 15, 2015		0.1275
				$	0.3710

In general, common stock cash dividends declared by the Company will be considered ordinary income to stockholders for income tax purposes.  From time to time, a portion of our dividends may be characterized as capital gains or return of capital.

Stock Repurchase Plan

On October 29, 2014, the Company announced that the Board of Directors approved a program to repurchase up to $10,000,000 in shares of the Company’s common stock.  Repurchases under this program may be made from time to time, in amounts and prices as the Company deems appropriate.  Repurchases may be made in open market or privately negotiated transactions in compliance with Rule 10b-18, under the Securities Exchange Act of 1934, subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy, and other relevant factors.  This share repurchase plan does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company's discretion.  The Company expects to fund repurchases under the program using cash on its balance sheet.  The Company repurchased 2,130 shares of its common stock on August 26, 2015, at an average price of $9.81, plus commissions, and are authorized to repurchase up to an additional $9,979,068 of its common stock under the program.

Equity Incentive Plan

On May 5, 2015, the Company’s stockholders approved the Amended and Restated 2014 Equity Incentive Plan (as amended and restated, the “Plan”), which increased the aggregate number of shares of the Company’s common stock reserved for issuance under the Plan to 615,070 shares (including the 217,238 shares of restricted common stock that have been granted to the Company’s executive officers, certain of the Company’s employees, the Company’s non-executive directors and Jesse J. Hough, the Company’s consultant). As of September 30, 2015, there were 397,832 of shares available for future grant under the Plan.

The Company may issue equity-based awards to officers, employees, independent contractors and other eligible persons under the Plan. The Plan provides for the grant of stock options, share awards (including restricted stock and restricted stock units), stock appreciation rights, dividend equivalent rights, performance awards, annual incentive cash awards and other equity based awards, including LTIP units, which are convertible on a one-for-one basis into OP units.  The terms of each grant are determined by the compensation committee of the Board of Directors. 

From time to time, the Company may award non-vested shares under the Plan, as compensation to officers, employees, non-employee directors and non-employee contractors. The shares vest over a period of time as determined by the Compensation Committee of the Board of Directors at the date of grant. The Company recognizes compensation expense for awards issued to officers, employees and non-employee directors for non-vested shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures.  The Company recognizes compensation expense for awards issued to non-employee consultants in the same period and in the same manner as if the Company paid cash for the underlying services.

On February 25, 2015, the Company granted 3,214 restricted shares of common stock, having an aggregate grant date fair value of $35,836, to a newly appointed independent director.  The restricted shares vest ratably over a three-year vesting period, subject to continued service as a director.

On February 25, 2015, 3,214 restricted shares of common stock were forfeited by an independent director who resigned from the Company’s Board of Directors.  The Company had recorded $10,820 in stock based compensation and paid $1,047 in dividends with respect to such restricted shares.  In conjunction with the forfeiture of restricted shares, the Company reversed $9,773 in previously recorded compensation, net of the dividends paid to the director.

On September 14, 2015, the Company granted 2,955 restricted shares of common stock, having an aggregate grant date fair value of $29,993, to an employee. The restricted shares vest ratably over a three-year vesting period, subject to continued employment.

A summary of the non-vested shares as of September 30, 2015 is as follows:

		Weighted
	Number of	average grant
	shares	date fair value
Unvested at January 1, 2015	214,283	$	14.00
Granted	6,169		10.67
Vested	(70,356)		(14.00)
Forfeited	(3,214)		(14.00)
Unvested at September 30, 2015	146,882	$	13.86

For the three and nine months ended September 30, 2015, the Company recognized $228,508 and $708,703, respectively, of stock-based compensation expense related to these restricted stock awards.  For the three and nine months ended September 30, 2014, the Company recognized $240,981 and $446,460, respectively, of stock-based compensation expense related to these restricted stock awards.  As of September 30, 2015, there was $1,487,654 of total unrecognized compensation costs related to non-vested stock awards which are expected to be recognized over a weighted-average period of 1.6 years.

Earnings per Share

The computation of basic and diluted earnings per share is as follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Numerator:
Net income (loss) attributable to Farmland Partners Inc.	$	623,867	$	27,651	$	574,503	$	(330,632)
Less: Dividends paid on unvested restricted shares		(18,727)		(22,500)		(61,935)		(45,000)
Less: Dividends paid on redeemable non-controlling interest		(112,675)		—		(225,350)		—
Net income (loss) attributable to common stockholders	$	492,465	$	5,151	$	287,218	$	(375,632)
Denominator:
Weighted-average number of common shares - basic and diluted		11,154,127		6,305,253		8,872,279		3,168,803
Unvested restricted shares (1)		4,153		4,331		9,823		—
Redeemable non-controlling interest (2)		—		—		—		—
Weighted-average number of common shares - diluted		11,158,280		6,309,584		8,882,102		3,168,803
Income (loss) per share attributable to common stockholders - basic	$	0.04	$	0.00	$	0.03	$	(0.12)
Income (loss) per share attributable to common stockholders - diluted	$	0.04	$	0.00	$	0.03	$	(0.12)

(1) Anti-dilutive for the nine months ended September 30, 2014.

(2) Anti-dilutive for the three and nine months ended September 30, 2015 and September 30, 2014.

Redeemable non-controlling interest includes 883,724 OP units which are redeemable solely for cash, unless shareholder approval is obtained to redeem for shares of common stock.  The OP units and any unvested restricted shares are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share.

The limited partners’ outstanding OP units (which may be redeemed for shares of common stock) and Excess Units have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested restricted shares (participating securities) have been excluded, as applicable, from net income or loss attributable to common stockholders utilized in the basic and diluted earnings per share calculations. Net income or loss figures are presented net of noncontrolling interests in the earnings per share calculations.  The weighted average number of OP units held by the noncontrolling interest was 3,293,572 and 2,584,098 for the three and nine months ended September 30, 2015, respectively.  The weighted average number of OP units held by the noncontrolling interest was 1,945,000 and 1,189,799 for the three and nine months ended September 30, 2014, respectively.  The weighted average number of Excess Units held by the noncontrolling interest was 883,724 and 388,450 for the three and nine months ended September 30, 2015, respectively.

For the three and nine months ended September 30, 2015 and 2014, diluted weighted average common shares do not include the impact of certain unvested compensation-related shares because the effect of these items on diluted earnings per share would be anti-dilutive.  Anti-dilutive compensation-related shares outstanding were 142,729 and 137,059 for the three and nine months ended September 30, 2015, respectively, and 209,952 and 214,283 for the three and nine months ended September 30, 2014.

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Organization and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Organization and Significant Accounting Policies

Principles of Combination and Consolidation

Principles of Combination and Consolidation

The accompanying combined consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. Upon completion of the IPO and the related formation transactions, the Company succeeded to the operations of FP Land.  FP Land was an entity under the common control of Paul A. Pittman, the Company’s Executive Chairman, President and Chief Executive Officer, and was organized to hold the equity interests of PH Farms LLC, an Illinois limited liability company, and Cottonwood Valley Land, LLC, a Nebraska limited liability company, both of which are engaged in the ownership of farmland and property related to farming in agricultural markets in Illinois, Nebraska and Colorado.  These financial statements retroactively reflect the consolidated equity ownership structure of the Company and the formation transactions.  The formation transactions were accounted for at historical cost due to the existence of common control.

The Company’s financial condition as of September 30, 2015 and December 31, 2014 and the results of operations for the three and nine months ended September 30, 2015 and the three months ended September 30, 2014, reflect the financial condition and results of operations of the Company.  Due to the timing of the IPO and the formation transactions, the results of operations for the nine months ended September 30, 2014 reflect the combined results of operations of FP Land, together with the Company, for the period prior to April 16, 2014 and the consolidated results of the Company for the period from April 16, 2014 through September 30, 2014.

Interim Financial Information

Interim Financial Information

The information in the Company’s combined consolidated financial statements for the three and nine months ended September 30, 2015 and 2014 is unaudited.  All significant inter-company balances and transactions have been eliminated in consolidation.  The accompanying financial statements for the three and nine months ended September 30, 2015 and 2014 include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods.  The financial information should be read in conjunction with the combined consolidated financial statements for the year ended December 31, 2014, included in the Company’s Annual Report on Form 10-K, which the Company filed with the SEC on March 3, 2015.  Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of actual operating results for the entire year ending December 31, 2015.

The combined consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements.  Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

Reclassifications

Reclassifications

Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income (loss), equity or cash flows from operations.

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 materially differ from those estimates.

Real Estate Acquisitions

Real Estate Acquisitions

The Company accounts for all acquisitions in accordance with the business combinations standard. When the Company acquires farmland that was previously operated as a rental property, the Company evaluates whether a lease is in place or a crop is being produced at the time of closing of the acquisition.  If a lease is in place or a crop is being produced, the Company accounts for the transaction as a business combination and charges the costs associated with the acquisition to acquisition and due diligence costs on the statement of operations, as incurred. Otherwise, acquisitions with no lease in place or crops being produced at the time of acquisition are accounted for as asset acquisitions.  When the Company acquires farmland in a sale-lease back transaction, the Company accounts for the transaction as an asset acquisition and capitalizes the transaction costs incurred in connection with the acquisition.

Upon acquisition of real estate, the Company allocates the purchase price of the real estate based upon the fair value of the assets and liabilities acquired, which historically have consisted of land, drainage improvements, irrigation improvements, groundwater, permanent plantings (bushes, shrubs, vines, and perennial crops) and grain facilities, and may also consist of intangible assets including in-place leases, above market and below market leases, and tenant relationships. The Company allocates the purchase price to the fair value of the tangible assets of acquired real estate by valuing the land as if it were unimproved. The Company values improvements, including permanent plantings and grain facilities, at replacement cost as new, adjusted for depreciation. Management’s estimates of land and groundwater value are made using a comparable sales analysis. Factors considered by management in its analysis of land value include soil types and water availability, the sales prices of comparable farms, and the replacement cost and residual useful life of land improvements. Management’s estimates of groundwater value are made using historical information obtained regarding the applicable aquifer.Factors considered by management in its analysis of groundwater value are related to the location of the aquifer and whether or not the aquifer is a depletable resource or a replenishing resource.  If the aquifer is a replenishing resource, no value is allocated to the groundwater.  The Company includes an estimate of property taxes in the purchase price allocation of acquisitions to account for the expected liability that was acquired.

When above or below market leases are acquired, the Company values the intangible assets based on the present value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above market leases and the initial term plus the term of any below market fixed rate renewal options for below market leases that are considered bargain renewal options. The above market lease values will be amortized as a reduction of rental income over the remaining term of the respective leases. The fair value of acquired below market leases, included in deferred revenue on the accompanying combined consolidated balance sheets, is amortized as an increase of rental income on a straight-line basis over the remaining non-cancelable terms of the respective leases, plus the terms of any below market fixed rate renewal options that are considered bargain renewal options of the respective leases.  As of September 30, 2015, the aggregate gross amount of below market leases was $229,597 and the total accumulated amortization was $121,885.  Total amortization related to below market leases was $64,627 and $121,885 for the three and nine months ended September 30, 2015, respectively. 

As of September 30, 2015 and December 31, 2014, the Company did not have any in-place lease or tenant relationship intangibles. The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired, based on the Company’s evaluation of the specific characteristics of each tenant’s lease, availability of replacement tenants, probability of lease renewal, estimated down time and its overall relationship with the tenant. The value of in-place lease intangibles and tenant relationships will be included as an intangible asset, and will be amortized over the remaining lease term (and expected renewal periods of the respective leases for tenant relationships) as amortization expense. If a tenant terminates its lease prior to its stated expiration, any unamortized amounts relating to that lease, including (i) above and below market leases, (ii) in-place lease values, and (iii) tenant relationships, would be recorded to revenue or expense as appropriate.

Using information available at the time acquisition or due diligence costs are incurred, the Company capitalizes acquisition costs for expected asset acquisitions.  If the asset acquisition is abandoned, the capitalized asset acquisition costs will be charged to acquisition and due diligence costs in the period of abandonment.

Total consideration may include a combination of cash and equity securities.  When equity securities are issued, the Company determines the fair value of the equity securities issued based on the number of shares of common stock or OP units issued multiplied by the stock price on the date of closing.

Using information available at the time of acquisition, the Company allocates the total consideration to tangible assets and liabilities and identified intangible assets and liabilities. The Company may adjust the preliminary purchase price allocations after obtaining more information about assets acquired and liabilities assumed at the date of acquisition.

Real Estate

Real Estate

The Company’s real estate consists of land, groundwater and improvements made to the land consisting of permanent plantings, grain facilities, irrigation improvements, drainage improvements and other improvements. The Company records real estate at cost and capitalizes improvements and replacements when they extend the useful life or improve the efficiency of the asset.  Construction in progress includes the costs to build new grain storage facilities and install new pivots and wells on newly acquired farms.  The Company begins depreciating assets when the asset is ready for its intended use.

The Company expenses costs of repairs and maintenance as such costs are incurred. The Company computes depreciation and depletion for assets classified as improvements using the straight-line method over their estimated useful lives as follows:

	Years
Grain facilities	10	-	40
Irrigation improvements	2	-	40
Drainage improvements	27	-	65
Groundwater	3	-	50
Permanent plantings			23
Other	5	-	40

The Company periodically evaluates the estimated useful lives for groundwater based on current state water regulations and depletion levels of the aquifers.

When a sale occurs, the Company recognizes the associated gain when all consideration has been transferred, the sale has closed and there is no material continuing involvement. If a sale is expected to generate a loss, the Company first assesses it through the impairment evaluation process—see “Impairment of Real Estate Assets” below.

Impairment of Real Estate Assets

Impairment of Real Estate Assets

The Company evaluates its tangible and identifiable intangible real estate assets for impairment indicators whenever events such as declines in a property’s operating performance, deteriorating market conditions or environmental or legal concerns bring recoverability of the carrying value of one or more assets into question. If such events are present, the Company projects the total undiscounted cash flows of the asset, including proceeds from disposition, and compares them to the net book value of the asset. If this evaluation indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. There have been no impairments recognized on real estate assets in the accompanying financial statements.

Cash

Cash

The Company’s cash at September 30, 2015 and December 31, 2014 was held in the custody of two financial institutions, and the Company’s balance at any given financial institution may at times exceed federally insurable limits. The Company monitors balances with individual financial institutions to mitigate risks relating to balances exceeding such limits.

Debt Issuance Costs

Debt Issuance Costs

Costs incurred by the Company or its predecessor in obtaining debt are deducted from the face amount of mortgage notes and bonds payable.  During the nine-month period ended September 30, 2015, $227,703 in costs were incurred in conjunction with the issuance of five bonds under the Farmer Mac Facility (as defined below).  During the year ended December 31, 2014, $135,340 and $234,188 in costs were incurred in conjunction with the modification of the First Midwest Bank debt on April 16, 2014 and the issuance of five bonds under the Farmer Mac Facility, respectively. Debt issuance costs are amortized using the straight-line method, which approximates the effective interest method, over the terms of the related indebtedness. Any unamortized amounts upon early repayment of mortgage notes payable are written off in the period in which repayment occurs. Fully amortized debt issuance costs are removed from the books upon maturity or repayment of the underlying debt. The Company wrote off $12,300 in debt issuance costs in conjunction with the early repayment of debt during the nine months ended September 30, 2015, and no costs were written off during the three months ended September 30, 2015. Accumulated amortization of debt issuance costs was $253,301 and $97,439 as of September 30, 2015 and December 31, 2014, respectively.  

Note and Interest Receivable

Note and Interest Receivable

The note receivable is stated at its unpaid principal balance, and includes unamortized direct origination costs and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points. 

Management determines the appropriate classification of debt securities at the time of issuance and reevaluates such designation as of each statement of financial position date.  As of September 30, 2015, the Company has designated the note receivable as held-to-maturity based on the Company’s positive intent and ability to hold the security until maturity.  Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method.  Such amortization, including interest, is included in other revenue within our combined consolidated statements of operations.

Allowance For Notes And Interest Receivable

Allowance for Note and Interest Receivable

A note is placed on nonaccrual status when management determines, after considering economic and business conditions and collection efforts, that the note is impaired or collection of interest is doubtful.  The accrual of interest on the instrument ceases when there is concern as to the ultimate collection of principal or interest due according to the note agreement will not be realized.  Any payment received on such non-accrual notes are recorded as interest income when the payment is received.  The note is reclassified as accrual-basis once interest and principal payments become current.  The Company periodically reviews the value of the underlying collateral of farm real estate for the note receivable and evaluates whether the value of the collateral continues to provide adequate security for the note.  Should the value of the underlying collateral become less than the outstanding principal and interest, the Company will determine whether there is a requirement to record an allowance.  Any uncollectible interest previously accrued is also charged off, or an allowance is established by a charge to interest income.  As of September 30, 2015, we believe the value of the underlying collateral to be sufficient and in excess of the outstanding principal and accrued interest.

Deferred Offering Costs

Deferred Offering Costs

Deferred offering costs include incremental direct costs incurred by the Company in conjunction with proposed or actual offering of securities.  At the completion of the offering, the deferred offering costs are charged ratably as a reduction of the gross proceeds of equity as stock is issued.  If an offering is abandoned, the previously deferred offering costs will be charged to operations in the period in which the abandonment occurs.  The Company incurred $370,493 and $756,970 in deferred offering costs in the three and nine months ended September 30, 2015, respectively.  As of September 30, 2015 and December 31, 2014, the Company had $285,780 and $0, respectively, in deferred offering costs related to regulatory, legal, accounting and professional service costs associated with proposed or actual offering of securities.

Accounts Receivable

Accounts Receivable

Accounts receivable are presented at face value, net of the allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income and is maintained at a level believed adequate by management to absorb estimated bad debts based on historical experience and current economic conditions. The allowance for doubtful accounts was $0 as of September 30, 2015 and December 31, 2014.

Inventory

Inventory

The costs of growing crop are accumulated until the time of harvest at the lower of cost or market value and are included in inventory in our combined consolidated financial statements.  Costs are allocated to growing crops based on a percentage of the total costs of production and total operating costs that are attributable to the portion of the crops that remain in inventory at the end of the year.  Growing crop consists primarily of land preparation, cultivation, irrigation and fertilization costs incurred by FPI Agribusiness. Growing crop inventory is charged to cost of products sold when the related crop is harvested and sold. 

Harvested crop inventory includes costs accumulated during the growing phase plus harvesting costs and are stated at the lower of those costs or the estimated net realizable value, which is the market price, based upon the nearest market in the geographic region, less any cost of disposition.  Cost of disposition includes broker’s commissions, freight and other marketing costs.   

Other inventory such as fertilizer and pesticides are valued at the lower of cost or market.

Inventory consisted of the following:

	September 30, 2015
Growing crop	$	193,278
Fertilizer and pesticides		6,086
	$	199,364

Revenue Recognition

Revenue Recognition

Rental income includes rents that each tenant pays in accordance with the terms of its lease. Minimum rents pursuant to leases are recognized as revenue on a straight-line basis over the lease term. Deferred revenue includes the cumulative difference between the rental revenue recorded on a straight-line basis and the cash rent received from tenants in accordance with the lease terms.  Acquired below market leases are included in deferred revenue on the accompanying combined consolidated financial statements, which are amortized into rental income over the life of the respective leases, plus the terms of the below market renewal options, if any.

Leases in place as of September 30, 2015 had terms ranging from one to five years.  As of September 30, 2015, the Company had 17 leases with renewal options and one lease with rent escalations.  The majority of the Company’s leases provide for a fixed cash rent payment.  Tenant leases on acquired farms generally require the tenant to pay the Company rent for the entire initial year regardless of the date of acquisition, if the acquisition is closed prior to, or shortly after, planting of crops.  If the acquisition is closed later in the year, the Company typically receives a partial rent payment or no rent payment at all.

Certain of the Company’s leases provide for a rent payment determined as a percentage of the gross farm proceeds or a percentage of harvested crops.  As of September 30, 2015, all such leases provided for a rent payment determined as a percentage of the gross farm proceeds.  Revenue under leases providing for a payment equal to a percentage of the harvested crop or a percentage of the gross farm proceeds is recognized upon notification from the grain facility that grain has been delivered in the Company’s name or when the tenant has notified the Company of the total amount of gross farm proceeds.

Certain of the Company’s leases provide for minimum cash rent plus a bonus based on gross farm proceeds.  Revenue under this type of lease is recognized on a straight-line basis over the lease term based on the minimum cash rent.  Bonus rent is recognized upon notification from the tenant of the gross farm proceeds for the year.

Tenant reimbursements include reimbursements for real estate taxes that each tenant pays in accordance with the terms of its lease. When leases require that the tenant reimburse the Company for property taxes paid by the Company, the reimbursement is reflected as tenant reimbursement revenue on the statement of operations, as earned, and the related property tax as property operating expense, as incurred.  When a lease requires that the tenant pay the taxing authority, directly, the Company does not incur this cost.  When it becomes probable that a tenant will not be able to bear the property related costs the Company will accrue the estimated expense.

The Company records revenue from the sale of harvested crops when the harvested crop has been delivered to a grain facility and title has transferred.  Harvested crops delivered under marketing contracts are recorded using the fixed price of the marketing contract at the time of delivery to a grain facility.  Harvested crops delivered without a marketing contract are recorded using the market price at the date the harvested crop is delivered to the grain facility and title has transferred.

The Company recognizes interest income on notes receivable on an accrual basis over the life of the note.  Direct origination costs are netted against loan origination fees and are amortized over the life of the note using the straight-line method, which approximates the effective interest method, as an adjustment to interest income which is included in operating revenue as a component of other income in the Company’s Combined Consolidated Statements of Operations for the three and nine months ended September 30, 2015.

Income Taxes

Income Taxes

As a REIT, the Company is permitted to deduct dividends paid to its stockholders, thereby eliminating the U.S. federal taxation of income represented by such distributions at the Company level, provided certain requirements are met. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates. 

The Operating Partnership leases certain of its farms to the TRS, which is subject to federal and state income taxes.  The TRS accounts for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective income tax bases and for operating loss, capital loss and tax credit carryforwards based on enacted income tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not they will be realized on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies.  At September 30, 2015, the Company did not have any deferred tax assets or liabilities.

The Company performs an annual review for any uncertain tax positions and, if necessary, will record future tax consequences of uncertain tax positions in the financial statements.  At September 30, 2015, the Company did not identify any uncertain tax positions.

When the Company acquires a property in a business combination, the Company evaluates such acquisition for any related deferred tax assets or liabilities and determines if a deferred tax asset or liability should be recorded in conjunction with the purchase price allocation.  If a built-in gain is acquired, the Company evaluates the required holding period (generally 5-10 years) and determines if it has the ability and intent to hold the underlying assets for the necessary holding period.  If the Company has the ability to hold the underlying assets for the required holding period, no deferred tax liability is recorded with respect to the built-in gain.

Derivatives and Hedge Accounting

Derivatives and Hedge Accounting

The Company enters into marketing contracts to sell commodities.  Derivatives and hedge accounting guidance requires a company to evaluate these contracts to determine whether the contracts are derivatives.  Certain contracts that meet the definition of a derivative may be exempt from derivative accounting if designated as normal purchase or normal sales.  The Company evaluates all contracts at inception to determine if they are derivatives and if they meet the normal purchase and normal sale designation requirements.  All contracts entered into in the three and nine months ended September 30, 2015 met the criteria to be exempt from derivative accounting and have been designated as normal purchase and sales exceptions for hedge accounting.

Segment Reporting

Segment Reporting

The Company’s chief operating decision maker does not evaluate performance on a farm-specific or transactional basis and does not distinguish the Company’s principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP.

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the weighted average number of unvested restricted shares (“participating securities” as defined in Note 9).  Diluted earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities such as stock grants or shares that would be issued in the event that OP units are redeemed for shares of common stock of the Company.  No adjustment is made for shares that are anti-dilutive during a period.

Non-controlling Interests

Non-controlling Interests

The Company’s non-controlling interests are interests in the Operating Partnership not owned by the Company.  The Company evaluates whether non-controlling interests are subject to redemption features outside of its control. The Company classifies non-controlling interests that are contingently redeemable solely for cash (unless shareholder approval is obtained to redeem for shares of common stock) one year after issuance or deemed probable to eventually become redeemable and which have redemption features outside of our control, as redeemable non-controlling interests in the mezzanine section of its combined consolidated balance sheets.  The Company has elected to accrete the change in redemption value subsequent to issuance and during the respective twelve-month holding period, after which point the units will be marked to redemption value at each reporting period. The majority of the Company’s non-controlling interests, which are redeemable for cash or shares of the Company’s common stock, at the Company’s option, are reported in the equity section of the Company’s combined consolidated balance sheets. The amounts reported for non-controlling interests on the Company’s combined consolidated statements of operations represent the portion of income or losses not attributable to the Company.

Stock Based Compensation

Stock Based Compensation

From time to time, the Company may award non-vested shares under the Company’s Amended and Restated 2014 Equity Incentive Plan as compensation to officers, employees, non-employee directors and non-employee consultants (see “Note 9 – Stockholders’ Equity and Non-controlling Interests”).  The shares issued to officers, employees, and non-employee directors vest over a period of time as determined by the Board of Directors at the date of grant.  The Company recognizes compensation expense for non-vested shares granted to officers, employees and non-employee directors on a straight-line basis over the requisite service period based upon the fair market value of the shares on the date of grant, as adjusted for forfeitures.  When an unvested award is forfeited, the Company recognizes compensation expense for dividends paid on the unvested award.  The Company recognizes expense related to non-vested shares granted to non-employee consultants over the period that services are received.  The change in fair value of the shares to be issued upon vesting is remeasured at each reporting period and is recorded in general and administrative expenses on the combined consolidated statement of operations.  During the nine months ended September 30, 2015, the Company recorded a decrease in stock based compensation related to non-employee share awards of $31,739, as a result of a change in fair value of the unvested shares.

New or Revised Accounting Standards Not Yet Effective

New or Revised Accounting Standards Not Yet Effective

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2015-03,Simplifying the Presentation of Debt Issuance Costs.  ASU 2015-03 requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge asset. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2015-03.  The Company had unamortized deferred financing fees of $424,434 and $364,893 as of September 30, 2015 and December 31, 2014, respectively.  These costs have been reclassified from deferred financing fees to mortgage notes and bonds payable.  All periods presented have been retroactively adjusted.

The following table summarizes the retroactive adjustment and the overall impact on the previously reported combined consolidated financial statements:

	December 31, 2014
	As previously reported		Retroactive Application
Deferred finance fees, net	$	364,893	$	—
Mortgage notes and bonds payable, net	$	113,878,300	$	113,513,407

In August 2015, the FASB issued ASU No. 2015-15,Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements— Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting which clarified that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement.  We have assessed the impact of ASU 2015-15 and it does not have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-15 is effective for annual periods beginning after December 15, 2015, but early adoption is permitted.

In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, pertaining to entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Any adjustments should be calculated as if the accounting had been completed at the acquisition date. We are currently assessing the impact of ASU 2015-16 and do not expect it to have a material effect on the Company’s combined consolidated financial statements or financial covenants. ASU 2015-16 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted.

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Mortgage Notes and Bonds Payable (Details)					1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 24, 2015 USD ($)	Aug. 22, 2014	Apr. 16, 2014 USD ($) item	Mar. 24, 2014 USD ($)	Apr. 16, 2014 USD ($) item	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Oct. 13, 2014 USD ($)
Mortgage notes payable
Principal Outstanding						$ 190,225,000	$ 190,225,000	$ 113,878,300
Debt Instrument, Decrease, Forgiveness							300,000
Debt issuance costs						(424,434)	(424,434)	(364,893)
Unamortized premium						260,241	260,241
Total						190,060,807	190,060,807	113,513,407
Book Value of Collateral						279,466,052	279,466,052
Unamortized deferred financing fees written off						0	12,300
Aggregate maturities of long-term debt
Remaining 3 months in 2015						3,000,000	3,000,000
2016						31,750,000	31,750,000
2017						81,100,000	81,100,000
2020						48,300,000	48,300,000
Thereafter						26,075,000	26,075,000
Total						190,225,000	190,225,000
Farmer Mac Facility
Mortgage notes payable
Outstanding debt						163,575,000	163,575,000
Fair value of property pledged as collateral						17,980,500	$ 17,980,500
Effective loan-to-value ratios as a percentage of the appraised value of agricultural real estate securing such mortgage loans							60.00%
Available borrowing capacity						1,425,000	$ 1,425,000
Farmer Mac Facility | Secured notes
Mortgage notes payable
Financing fees capitalized						$ 227,703	$ 227,703	234,188
Maximum aggregate principal amount									$ 165,000,000
Effective loan-to-value ratios as a percentage of the appraised value of agricultural real estate securing such mortgage loans							60.00%
Farmer Mac Facility | Secured notes | Minimum
Mortgage notes payable
Fixed charge coverage ratio						1.5
Tangible net worth						$ 96,312,017	$ 96,312,017
Collateral value as percentage of aggregate principal amount of outstanding notes (as a percent)		100.00%
Total collateral value as percentage of aggregate principal amount of outstanding notes (as a percent)		110.00%
Farmer Mac Facility | Secured notes | Maximum
Mortgage notes payable
Leverage ratio (as a percent)						60.00%
Loan Agreement
Mortgage notes payable
Financing fees capitalized			$ 135,340		$ 135,340			135,340
Loan Agreement | Minimum
Mortgage notes payable
Cash account balance required to be maintained							500,000
Fixed charge coverage ratio	1.50
Loan Agreement | Maximum
Mortgage notes payable
Leverage ratio (as a percent)	0.60%
Operating Partnership | Loan Agreement
Mortgage notes payable
Principal amount of loan			30,780,000		30,780,000
Operating Partnership | Loan Agreement | Guarantee of obligations | Messrs. Pittman and Hough
Mortgage notes payable
Principal amount of loan			11,000,000		11,000,000
Mortgage notes payable
Mortgage notes payable
Debt repaid			6,529,237
Mortgage notes payable | Fair value | Level 3
Aggregate maturities of long-term debt
Debt						$ 190,251,936	$ 190,251,936	113,649,531
Midwest Bank debt maturing on June 2016 and Mortgage notes payable maturing on March 2016
Mortgage notes payable
Debt repaid	$ 3,078,000		$ 4,749,900
Unamortized deferred financing fees written off					$ 26,929
Number of master notes | item			1		1
Number of tranches | item			2
Midwest Bank debt maturing on June 2016 and Mortgage notes payable maturing on March 2016 | Advances | Messrs. Pittman and Hough
Mortgage notes payable
Debt repaid				$ 766,000
Midwest Bank debt maturing on June 2016 and Mortgage notes payable maturing on March 2016 | Loan Agreement
Mortgage notes payable
Number of notes combined to modification of loan | item			2		2
Mortgage notes payable maturing on June 2016
Mortgage notes payable
Interest Rate (as a percent)						2.80%	2.80%
Principal Outstanding						$ 650,000	$ 650,000	754,000
Book Value of Collateral						$ 1,143,333	$ 1,143,333	1,073,167
Mortgage notes payable maturing on June 2016 | Minimum
Mortgage notes payable
Interest rate (as a percent)						2.80%	2.80%
Mortgage notes payable maturing on June 2016 | Guarantee of obligations | Messrs. Pittman and Hough
Mortgage notes payable
Principal amount of loan						$ 11,000,000	$ 11,000,000
Mortgage notes payable maturing on June 2016 | LIBOR
Mortgage notes payable
Margin added to reference rate (as a percent)							2.59%
Mortgage notes payable maturing on March 2016
Mortgage notes payable
Interest Rate (as a percent)						2.80%	2.80%
Principal Outstanding						$ 26,000,000	$ 26,000,000	30,000,000
Book Value of Collateral						$ 24,020,052	$ 24,020,052	26,410,132
Mortgage notes payable maturing on March 2016 | Minimum
Mortgage notes payable
Interest rate (as a percent)						2.80%	2.80%
Mortgage notes payable maturing on March 2016 | LIBOR
Mortgage notes payable
Margin added to reference rate (as a percent)							2.59%
Farmer Mac mortgage notes maturing in 2017
Mortgage notes payable
Debt Instrument, Decrease, Forgiveness							$ 300,000
Remaining borrowing capacity						$ 1,425,000	$ 1,425,000
Farmer Mac Note 1 mortgage notes payable maturing on September 2017
Mortgage notes payable
Interest rate (as a percent)						2.40%	2.40%
Interest Rate (as a percent)						2.40%	2.40%
Principal Outstanding						$ 20,700,000	$ 20,700,000	20,700,000
Book Value of Collateral						$ 30,315,923	$ 30,315,923
Farmer Mac Note 2 mortgage notes payable maturing on October 2017
Mortgage notes payable
Interest rate (as a percent)						2.35%	2.35%
Interest Rate (as a percent)						2.35%	2.35%
Principal Outstanding						$ 5,460,000	$ 5,460,000	5,460,000
Book Value of Collateral						$ 9,005,272	$ 9,005,272
Farmer Mac Note 3 mortgage notes payable maturing on November 2017
Mortgage notes payable
Interest rate (as a percent)						2.50%	2.50%
Interest Rate (as a percent)						2.50%	2.50%
Principal Outstanding						$ 10,680,000	$ 10,680,000	10,680,000
Book Value of Collateral						$ 10,703,039	$ 10,703,039
Farmer Mac Note 4 mortgage notes payable maturing on December 2017
Mortgage notes payable
Interest rate (as a percent)						2.50%	2.50%
Interest Rate (as a percent)						2.50%	2.50%
Principal Outstanding						$ 13,400,000	$ 13,400,000	13,400,000
Book Value of Collateral						$ 23,553,538	$ 23,553,538
Farmer Mac Note 5 mortgage notes payable maturing on December 2017
Mortgage notes payable
Interest rate (as a percent)						2.56%	2.56%
Interest Rate (as a percent)						2.56%	2.56%
Principal Outstanding						$ 30,860,000	$ 30,860,000	30,860,000
Book Value of Collateral						$ 52,800,877	$ 52,800,877
Farmer Mac Note 6 Mortgage Notes Maturing In April 2025
Mortgage notes payable
Interest rate (as a percent)						3.69%	3.69%
Interest Rate (as a percent)						3.69%	3.69%
Principal Outstanding						$ 14,915,000	$ 14,915,000
Book Value of Collateral						$ 20,100,764	$ 20,100,764
Farmer Mac Note 7 Mortgage Notes Maturing In April 2025
Mortgage notes payable
Interest rate (as a percent)						3.68%	3.68%
Interest Rate (as a percent)						3.68%	3.68%
Principal Outstanding						$ 11,160,000	$ 11,160,000
Book Value of Collateral						$ 18,188,079	$ 18,188,079
Farmer Mac Note 8A Mortgage Notes Maturing In June 2020
Mortgage notes payable
Interest rate (as a percent)						3.20%	3.20%
Interest Rate (as a percent)						3.20%	3.20%
Principal Outstanding						$ 41,700,000	$ 41,700,000
Book Value of Collateral						$ 80,889,774	$ 80,889,774
Farmer Mac Note 8B Mortgage Notes Maturing In May 2016
Mortgage notes payable
Interest Rate (as a percent)						2.00%	2.00%
Principal Outstanding						$ 8,100,000	$ 8,100,000
Farmer Mac Note 8B Mortgage Notes Maturing In May 2016 | LIBOR
Mortgage notes payable
Interest rate (as a percent)						1.80%	1.80%
Farmer Mac Note 9 Mortgage Notes Maturing In July 2020
Mortgage notes payable
Interest rate (as a percent)						3.35%	3.35%
Interest Rate (as a percent)						3.35%	3.35%
Principal Outstanding						$ 6,600,000	$ 6,600,000
Book Value of Collateral						$ 8,745,401	$ 8,745,401
Term							5 years
Tindall mortgage note payable maturing on January 2015
Mortgage notes payable
Interest rate (as a percent)						0.00%	0.00%
Principal Outstanding								1,180,800
Tindall mortgage note 2 payable maturing on January 2015
Mortgage notes payable
Interest rate (as a percent)						0.00%	0.00%
Principal Outstanding								563,500
Beck mortgage note payable maturing on January 2015
Mortgage notes payable
Interest rate (as a percent)						0.00%	0.00%
Principal Outstanding								$ 280,000

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Mortgage Notes and Bonds Payable (Tables)

9 Months Ended

Sep. 30, 2015

Mortgage Notes and Bonds Payable

Schedule of indebtedness outstanding

											Book
			Annual								Value of
			Interest								Collateral
			Rate as of	Principal Outstanding as of							as of
Loan	Payment Terms	Interest Rate Terms	September 30, 2015	September 30, 2015			December 31, 2014			Maturity	September 30, 2015
First Midwest Bank	Annual principal / quarterly interest	Greater of LIBOR + 2.59%  and 2.80%	2.80%	$	650,000	(1)	$	754,000	(1)	June 2016	$	1,143,333	(2)
First Midwest Bank	Annual principal / quarterly interest	Greater of LIBOR + 2.59%  and 2.80%	2.80%		26,000,000	(1)		30,000,000	(1)	March 2016		24,020,052	(3)
Farmer Mac Bond #1	Semi-annual interest only	2.40%	2.40%		20,700,000			20,700,000		September 2017		30,315,923
Farmer Mac Bond #2	Semi-annual interest only	2.35%	2.35%		5,460,000			5,460,000		October 2017		9,005,272
Farmer Mac Bond #3	Semi-annual interest only	2.50%	2.50%		10,680,000			10,680,000		November 2017		10,703,039
Farmer Mac Bond #4	Semi-annual interest only	2.50%	2.50%		13,400,000			13,400,000		December 2017		23,553,538
Farmer Mac Bond #5	Semi-annual interest only	2.56%	2.56%		30,860,000			30,860,000		December 2017		52,800,877
Farmer Mac Bond #6	Semi-annual interest only	3.69%	3.69%		14,915,000			—		April 2025		20,100,764
Farmer Mac Bond #7	Semi-annual interest only	3.68%	3.68%		11,160,000			—		April 2025		18,188,079
Farmer Mac Bond #8A	Semi-annual interest only	3.20%	3.20%		41,700,000			—		June 2020		80,889,774	(4)
Farmer Mac Bond #8B	(5)	Libor + 1.80%	2.00%		8,100,000			—		May 2016		—	(4)
Farmer Mac Bond #9	Semi-annual interest only	3.35%	3.35%		6,600,000			—		July 2020		8,745,401
Tindall	Principal at maturity	0.00%	—		—			1,180,800		January 2015		—
Tindall	Principal at maturity	0.00%	—		—			563,500		January 2015		—
Beck	Principal at maturity	0.00%	—		—			280,000		January 2015		—
Total outstanding principal					190,225,000			113,878,300			$	279,466,052
Debt issuance costs					(424,434)			(364,893)
Unamortized premium					260,241			—
Total mortgage notes and bonds payable, net				$	190,060,807		$	113,513,407

(1) Messrs. Pittman and Hough unconditionally agreed to jointly and severally guarantee $11,000,000.

(2) The book value of collateral as of December 31, 2014 was $1,073,167.

(3) The book value of collateral as of December 31, 2014 was $26,410,132.

(4) The $8,100,000 bond is cross collateralized with the $41,700,000 bond.

(5) Bond is an amortizing loan with monthly principal payments that commenced on October 2, 2015 and monthly interest payments that commenced on July 2, 2015 with all remaining principal and outstanding interest due at maturity.

Schedule of aggregate maturities of long-term debt

As of September 30, 2015, aggregate maturities of long-term debt for the succeeding years are as follows:

Year Ending December 31,	Future Maturities
Remaining 3 months in 2015	$	3,000,000
2016		31,750,000
2017		81,100,000
2020		48,300,000
Thereafter		26,075,000
	$	190,225,000

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Organization and Significant Accounting Policies (Details 2)	9 Months Ended
	Sep. 30, 2015
Grain facilities | Minimum
Real Estate
Estimated useful lives	10 years
Grain facilities | Maximum
Real Estate
Estimated useful lives	40 years
Irrigation improvements | Minimum
Real Estate
Estimated useful lives	2 years
Irrigation improvements | Maximum
Real Estate
Estimated useful lives	40 years
Drainage improvements | Minimum
Real Estate
Estimated useful lives	27 years
Drainage improvements | Maximum
Real Estate
Estimated useful lives	65 years
Groundwater | Minimum
Real Estate
Estimated useful lives	3 years
Groundwater | Maximum
Real Estate
Estimated useful lives	50 years
Horticulture
Real Estate
Estimated useful lives	23 years
Other | Minimum
Real Estate
Estimated useful lives	5 years
Other | Maximum
Real Estate
Estimated useful lives	40 years

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Stockholders' Equity and Non-controlling Interests (Details 6) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Numerator:
Net income (loss) attributable to Farmland Partners Inc.	$ 623,867	$ 27,651	$ 574,503	$ (330,632)
Less: Dividends paid to unvested restricted shares	(18,727)	(22,500)	(61,935)	(45,000)
Less: Dividends paid on redeemable non-controlling interest	(112,675)		(225,350)
Net income (loss) available to common stockholders of Farmland Partners Inc.	$ 492,465	$ 5,151	$ 287,218	$ (375,632)
Denominator:
Weighted-average number of common shares - basic and diluted	11,154,127	6,305,253	8,872,279	3,168,803
Unvested restricted shares (1)	4,153	4,331	9,823
Weighted-average number of common shares - diluted (in shares)	11,158,280	6,309,584	8,882,102	3,168,803
Income (loss) per share attributable to common stockholders - basic	$ 0.04	$ 0.00	$ 0.03	$ (0.12)
Income (loss) per share attributable to common stockholders - diluted	$ 0.04	$ 0.00	$ 0.03	$ (0.12)
Underwritten public offering
Shares of common stock sold	11,982,689		11,982,689		7,731,755

XML

Combined Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 805,600	$ (372,273)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and depletion	613,381	209,472
Amortization of discounts/premiums on debt	128,403	97,987
Amortization of net origination fees related to note receivable	(3,126)
Amortization of below market leases	(121,885)
Stock based compensation	708,703	446,460
Loss on disposition of assets	3,785	7,419
Changes in operating assets and liabilities:
Increase in accounts receivable	(514,198)	(174,592)
Increase in interest receivable	(14,800)
Increase in other assets	(144,464)	(99,020)
Increase in inventory	(188,936)
Increase (decrease) in accrued interest	1,218,132	(44,576)
Decrease in accrued expenses	(20,907)	(314,643)
Increase in deferred revenue	5,910,737	1,753,410
Increase in accrued property taxes	273,290	156,440
Net cash provided by operating activities	8,653,715	1,666,084
CASH FLOWS FROM INVESTING ACTIVITIES
Real estate acquisitions	(98,910,034)	(36,891,656)
Real estate improvements	(6,347,542)	(46,128)
Issuance of note receivable	(1,800,000)
Origination fees on note receivable	40,000
Payment of direct costs related to note receivable	(18,000)
Net cash used in investing activities	(107,035,576)	(36,937,784)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from mortgage notes payable	82,475,000	20,700,000
Repayments on mortgage notes payable	(6,128,300)	(12,311,237)
Proceeds from initial public offering		49,476,000
Proceeds from underwritten public offering	35,112,000	44,144,980
Common stock repurchased	20,932	1,000
Payment of offering costs	(479,852)	(2,255,090)
Common stock repurchased	(20,932)	(1,000)
Payment of debt issuance costs	(223,703)	(216,014)
Refund on outstanding debt	300,000
Dividends on common stock	(2,900,159)	(625,725)
Contributions from member		1,178,107
Distributions to member		(16,765)
Distributions to non-controlling interest in operating partnership	(983,845)	(1,071,592)
Net cash provided by financing activities	107,150,209	99,001,664
NET INCREASE IN CASH	8,768,348	63,729,964
CASH, BEGINNING OF PERIOD	33,736,166	17,805
CASH, END OF PERIOD	42,504,514	63,747,769
Cash paid during period for interest	1,886,772	853,008
Cash paid during period for taxes	4,400
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS
Additions to construction in progress included in accrued expenses	406,779
Financing fees included in accrued expenses	4,000
Direct costs related to note receivable included in accrued expenses	9,748
Real estate acquisition costs included in accrued expenses	11,348
Capitalization of deferred offering costs related to at-the-market offering	265,092
Capitalization of deferred offering costs as a result of pending financing transaction		699,013
Dividends payable	2,060,127	1,016,059
Property tax liability assumed in acquisitions	50,310	21,959
Issuance of equity and contributions from redeemable non-controlling interests and non-controlling interests in operating partnership in conjunction with acquisitions	34,387,828
Below market lease acquired in acquisitions	229,597
Cash acquired in business combination		(1,000)
Accounts receivable acquired in business combination	(106,900)	(30,000)
Other assets acquired in business combination	$ (32,500)
Distribution of accounts receivable to Pittman Hough Farms		$ (450,833)

XML

Real Estate

9 Months Ended

Sep. 30, 2015

Real Estate

Real Estate

Note 5—Real Estate

As of September 30, 2015, the Company owned 121 separate farms, as well as eight grain storage facilities.

During the nine months ended September 30, 2015, the Company acquired the following farms:

			Total
		Date	approximate	Purchase		Acquisition
Acquisition / Farm	County	acquired	acres	price		costs		Type of acquisition
Swarek	Quitman, MS	1/14/2015	850	$	3,511,919	$	5,819	Asset acquisition
Stonington Bass	Baca, CO	2/18/2015	997		2,079,000		1,277	Business combination
Benda Butler	Butler, NE	2/24/2015	73		605,799		1,393	Asset acquisition
Benda Polk	Polk, NE	2/24/2015	123		860,998		1,748	Asset acquisition
Timmerman (1)	Phillips, CO	3/13/2015	315		2,026,220		477	Asset acquisition
Cypress Bay	Bamberg, SC	3/13/2015	502		2,303,573		3,573	Asset acquisition
Nebraska Battle Creek farms (5 farms) (2)	Madison, NE	4/10/2015	1,117		9,022,595		19,776	Business combination
Northeast Nebraska farms (6 farms) (3)	Pierce, NE	4/10/2015	1,160		8,981,209		19,761	Business combination
Drury	Yuma, CO	4/10/2015	160		950,000		396	Business combination
Sutter	Yuma, CO	4/17/2015	322		2,000,056		56	Asset acquisition
Bobcat	St. Francis, AR	4/30/2015	934		3,024,750		11,642	Business combination
Swindoll Darby	Tunica, MS	5/14/2015	359		1,468,457		2,207	Asset acquisition
Abraham	Fulton, IL	5/29/2015	110		761,844		2,191	Asset acquisition
Justice farms (8 farms) (4)	(5)	6/2/2015	14,935		80,913,167		198,533	Asset acquisition
Tomasek (6)	McDonough, IL	6/30/2015	58		690,463		2,162	Business combination
Purdy	Crittenden & Mississippi, AR	7/2/2015	1,383		6,167,992		21,342	Asset acquisition
Matthews	Tunica & DeSoto, MS	7/10/2015	1,130		5,576,210		21,810	Asset acquisition
Riccioni	Van Buren, MI	9/15/2015	181		2,557,595		13,595	Asset acquisition
			24,709	$	133,501,847	$	327,758

(1) On March 13, 2015, the Company issued 63,581 shares of common stock (with a fair value of $712,743 as of the date of closing) as partial consideration for the acquisition of the Timmerman farm.

(2) On April 10, 2015, the Company issued 118,634 OP units (with a fair value of $1,372,595 as of the date of closing) as partial consideration for the acquisition of the Nebraska Battle Creek farms.

(3) On April 10, 2015, the Company issued 119,953 OP units (with a fair value of $1,387,856 as of the date of closing) as partial consideration for the acquisition of the Northeast Nebraska farms.

(4) On June 2, 2015, the Company issued 824,398 shares of common stock and 1,993,709 OP units, of which 883,724 are redeemable for cash, (with an aggregate fair value of $30,914,634, as of the date of closing) as partial consideration for the acquisition of the Justice farms.

(5) The Justice farms are located in Beaufort, Currituck, Pamlico, Pasquotank and Perquimans counties, NC; Marlboro County, SC; and Chesapeake, VA.

(6) On June 30, 2015, the Company acquired the Tomasek property from Mr. Pittman. The purchase price of the property approximated fair value.  In conjunction with the acquisition, the Company assumed a two year lease with Astoria Farms with annual rents of $18,749.

During the nine months ended September 30, 2014, the Company acquired the following farms:

			Total
		Date	approximate	Purchase		Acquisition
Acquisition / Farm	County	acquired	acres	price		costs		Type of acquisition
Erker (5 farms)	Kit Carson, CO	5/30/2014	3,171	$	7,644,339	$	5,017	Asset acquisition
Hudye (11 farms) (1)	Kit Carson and Cheyenne, CO and Sherman and Logan, KS	6/12/2014	12,500		24,500,000		63,836	Businesscombination
Broadwater	Morrill, NE	7/1/2014	640		1,040,666		666	Asset acquisition
Ruder	Yell, AR	9/24/2014	667		2,705,800		9,180	Business combination
			16,978	$	35,890,805	$	78,699

(1) On June 12, 2014, the Company acquired all of the outstanding stock in Hudye Farms U.S., Inc. (“HFUSI”), which owned an approximately 12,500-acre farm (referred to as the Hudye farm) located primarily in eastern Colorado, for $24.5 million, excluding related acquisition costs of $63,836.  The Company funded this business combination with cash available from the IPO.  All tenant leases were terminated by the previous owner prior to the closing of the acquisition.  On June 20, 2014, HFUSI was merged with and into FPI Burlington Farms LLC, a wholly owned subsidiary of the Company, with FPI Burlington Farms LLC surviving. FPI Burlington Farms LLC entered into new leases with tenants on June 23, 2014.  The new leases provide for aggregate annual cash rent of $1.2 million. Rent for 2014 was paid at lease execution in its entirety, without proration. In conjunction with the business combination, the Company acquired a tax built-in gain of $17.8 million.  No deferred tax liability was recorded with respect to the tax built-in gain as the Company has the ability and intent to hold the property for the required holding period.

The preliminary allocation of purchase price for the farms acquired during the nine months ended September 30, 2015 are as follows:

	Land		Groundwater		Irrigation improvements		Permanent plantings & other		Timber		Accounts receivable		Below market lease		Accrued property taxes		Total
Swarek	$	3,470,706	$	—	$	41,213	$	—	$	—	$	—	$	—	$	—	$	3,511,919
Stonington Bass		1,994,800		—		79,600		4,600		—		—		—		—		2,079,000
Benda Butler		606,566		—		—		—		—		—		—		(767)		605,799
Benda Polk		861,714		—		—		—		—		—		—		(716)		860,998
Timmerman		1,365,403		625,900		36,600		—		—		—		—		(1,683)		2,026,220
Cypress Bay		1,959,173		—		276,000		68,400		—		—		—		—		2,303,573
Nebraska Battle Creek farms (5 farms)		8,756,895		—		339,000		—		—		37,375		(88,950)		(21,725)		9,022,595
Northeast Nebraska farms (6 farms)		8,872,203		—		235,800		—		—		29,933		(140,647)		(16,080)		8,981,209
Drury		808,975		106,925		34,100		—		—		—		—		—		950,000
Sutter		1,300,739		595,017		104,300		—		—		—		—		—		2,000,056
Bobcat		2,808,131		—		183,500		—		—		30,217		—		2,902		3,024,750
Swindoll Darby		1,436,989		—		32,600		—		—		—		—		(1,132)		1,468,457
Abraham		761,894		—		—		—		—		—		—		(50)		761,844
Justice farms (8 farms)		80,758,395		—		95,831		37,500		32,500		—		—		(11,059)		80,913,167
Tomasek		681,088		—		—		—		—		9,375		—		—		690,463
Purdy		5,923,605		—		244,387		—		—		—		—		—		6,167,992
Matthews		5,337,735		—		77,475		161,000		—		—		—		—		5,576,210
Riccioni		903,810		—		286,292		1,367,493		—		—		—		—		2,557,595
	$	128,608,821	$	1,327,842	$	2,066,698	$	1,638,993	$	32,500	$	106,900	$	(229,597)	$	(50,310)	$	133,501,847

The allocation of the purchase price for the farms acquired during the nine months ended September 30, 2015 is preliminary and may change during the measurement period if the Company obtains new information regarding the assets acquired or liabilities assumed at the acquisition date.

The allocation of purchase price for the farms acquired during the nine months ended September 30, 2014 are as follows:

	Land		Groundwater		Irrigation improvements		Other		Cash		Accounts receivable		Accrued property taxes		Total
Erker (5 farms)	$	6,350,958	$	1,012,000	$	284,672	$	—	$	—	$	—	$	(3,291)	$	7,644,339
Hudye (11 farms)		23,466,271		730,550		246,109		70,000		1,000		—		(13,930)		24,500,000
Broadwater		848,077		—		179,100		18,000		—		—		(4,511)		1,040,666
Ruder		2,645,176		—		40,050		—		—		20,800		(226)		2,705,800
	$	33,310,482	$	1,742,550	$	749,931	$	88,000	$	1,000	$	20,800	$	(21,958)	$	35,890,805

The Company has included the results of operations for the acquired real estate in the combined consolidated statements of operations from the dates of acquisition.  The real estate acquired in business combinations during the nine months ended September 30, 2015 contributed an aggregate of $284,012 and $524,811 to total revenue and $231,681 and $363,849 to the net income (loss) (including related real estate acquisition costs of $0 and $55,014) for the three and nine months ended September 30, 2015, respectively.  The real estate acquired in business combinations during the nine months ended September 30, 2014 contributed an aggregate $390,620 and $447,441 to total revenue and $342,022 and $322,631 to net income (including related real estate acquisition costs of $9,180 and $73,016) for the three and nine months ended September 30, 2014, respectively.

The unaudited pro forma information presented below does not purport to represent what the actual results of operations of the Company would have been had the business combinations outlined above occurred as of the beginning of the periods presented, nor does it purport to predict the results of operations of future periods.

The unaudited pro forma information is presented below as if the real estate acquired in business combinations during the nine months ended September 30, 2015 had been acquired on January 1, 2014.  The following table does not include the pro forma financial information for the Stonington Bass, Drury and Bobcat farms, as historical results for the farms were not available.  The unaudited pro forma information is presented below as if the Hudye and Ruder farms acquired during the nine months ended September 30, 2014 had been acquired on January 1, 2013.

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Pro forma
Total operating revenues	$	4,102,300	$	1,402,790	$	9,210,664	$	3,899,326
Net income (loss)	$	788,304	$	141,798	$	842,369	$	671,112
Earnings per share basic and diluted
Income (loss) per basic share attributable to common stockholders	$	0.04	$	0.01	$	0.04	$	0.17
Income (loss) per diluted share attributable to common stockholders	$	0.04	$	0.01	$	0.04	$	0.17
Weighted-average number of common shares - basic		11,154,127		6,305,253		8,872,279		3,168,803
Weighted-average number of common shares - diluted		11,158,280		6,309,584		8,882,102		3,168,803

XML

Organization and Significant Accounting Policies (Details 3)	3 Months Ended	9 Months Ended	12 Months Ended	21 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($) lease item	Dec. 31, 2014 USD ($) item	Sep. 30, 2015 USD ($) Institution	Apr. 16, 2014 USD ($)
Organization and Significant Accounting Policies
Allowance for doubtful accounts	$ 0	$ 0	$ 0	$ 0
Deferred Offering Costs	285,780	285,780	0	285,780
Inventory
Growing crop	193,278	193,278		193,278
Fertilizer and pesticides	6,086	6,086		6,086
Total inventory	199,364	199,364		$ 199,364
Deferred offering costs incurred	370,493	$ 756,970
Number of leases with renewal options | lease		17
Number of leases with rent escalations | lease		1
Impairment
Impairments recognized on real estate assets		$ 0
Cash
Number of financial institutions in whose custody the cash was held | Institution				2
Deferred Financing Fees
Deferred financing fees written off	0	12,300
Accumulated amortization of deferred financing fees	253,301	$ 253,301	97,439	$ 253,301
Loan Agreement
Organization and Significant Accounting Policies
Financing fees capitalized			$ 135,340		$ 135,340
Farmer Mac Facility
Organization and Significant Accounting Policies
Number of bonds issued | item		5	5
Farmer Mac Facility | Secured notes
Organization and Significant Accounting Policies
Financing fees capitalized	$ 227,703	$ 227,703	$ 234,188	$ 227,703
Minimum
Organization and Significant Accounting Policies
Term of leases		1 year
Required holding period		5 years
Maximum
Organization and Significant Accounting Policies
Term of leases		5 years
Required holding period		10 years

XML

Stockholders' Equity and Non-controlling Interests (Details 3) - OP units		9 Months Ended
	Jun. 02, 2015 USD ($) shares	Sep. 30, 2015 USD ($) shares
Redeemable Noncontrolling Interest [Line Items]
Temporary Equity redeemable for cash | shares	883,724
Redeemable OP units
Redeemable Noncontrolling Interest [Line Items]
Issuance of units | shares	1,993,709
Ratio of OP units redeemable into common stock	1
Maximum number of common stock | shares	1,109,985
Fair value of the redeemable units	$ 9,694,452	$ 9,279,102
Change in redeemable non-controlling interest [Roll Forward]
Net income		53,117
Dividends accrued or paid		(225,350)
Issuance of redeemable OP units as partial consideration for asset acquisition		$ 9,694,452
Issuance of redeemable OP units as partial consideration for asset acquisition (in shares) | shares		883,724
Adjustment to arrive at redemption value of redeemable non-controlling interest		$ 36,053
Ending balance		$ 9,558,272
Ending balance (in shares) | shares		883,724
Redeemable OP units | Distributions in Excess of Earnings
Redeemable Noncontrolling Interest [Line Items]
Temporary Equity redeemable for cash | shares	883,724

XML

Real Estate (Tables)

9 Months Ended

Sep. 30, 2015

Real Estate

Schedule of farms acquired

During the nine months ended September 30, 2015, the Company acquired the following farms:

			Total
		Date	approximate	Purchase		Acquisition
Acquisition / Farm	County	acquired	acres	price		costs		Type of acquisition
Swarek	Quitman, MS	1/14/2015	850	$	3,511,919	$	5,819	Asset acquisition
Stonington Bass	Baca, CO	2/18/2015	997		2,079,000		1,277	Business combination
Benda Butler	Butler, NE	2/24/2015	73		605,799		1,393	Asset acquisition
Benda Polk	Polk, NE	2/24/2015	123		860,998		1,748	Asset acquisition
Timmerman (1)	Phillips, CO	3/13/2015	315		2,026,220		477	Asset acquisition
Cypress Bay	Bamberg, SC	3/13/2015	502		2,303,573		3,573	Asset acquisition
Nebraska Battle Creek farms (5 farms) (2)	Madison, NE	4/10/2015	1,117		9,022,595		19,776	Business combination
Northeast Nebraska farms (6 farms) (3)	Pierce, NE	4/10/2015	1,160		8,981,209		19,761	Business combination
Drury	Yuma, CO	4/10/2015	160		950,000		396	Business combination
Sutter	Yuma, CO	4/17/2015	322		2,000,056		56	Asset acquisition
Bobcat	St. Francis, AR	4/30/2015	934		3,024,750		11,642	Business combination
Swindoll Darby	Tunica, MS	5/14/2015	359		1,468,457		2,207	Asset acquisition
Abraham	Fulton, IL	5/29/2015	110		761,844		2,191	Asset acquisition
Justice farms (8 farms) (4)	(5)	6/2/2015	14,935		80,913,167		198,533	Asset acquisition
Tomasek (6)	McDonough, IL	6/30/2015	58		690,463		2,162	Business combination
Purdy	Crittenden & Mississippi, AR	7/2/2015	1,383		6,167,992		21,342	Asset acquisition
Matthews	Tunica & DeSoto, MS	7/10/2015	1,130		5,576,210		21,810	Asset acquisition
Riccioni	Van Buren, MI	9/15/2015	181		2,557,595		13,595	Asset acquisition
			24,709	$	133,501,847	$	327,758

(1) On March 13, 2015, the Company issued 63,581 shares of common stock (with a fair value of $712,743 as of the date of closing) as partial consideration for the acquisition of the Timmerman farm.

(2) On April 10, 2015, the Company issued 118,634 OP units (with a fair value of $1,372,595 as of the date of closing) as partial consideration for the acquisition of the Nebraska Battle Creek farms.

(3) On April 10, 2015, the Company issued 119,953 OP units (with a fair value of $1,387,856 as of the date of closing) as partial consideration for the acquisition of the Northeast Nebraska farms.

(4) On June 2, 2015, the Company issued 824,398 shares of common stock and 1,993,709 OP units, of which 883,724 are redeemable for cash, (with an aggregate fair value of $30,914,634, as of the date of closing) as partial consideration for the acquisition of the Justice farms.

(5) The Justice farms are located in Beaufort, Currituck, Pamlico, Pasquotank and Perquimans counties, NC; Marlboro County, SC; and Chesapeake, VA.

(6) On June 30, 2015, the Company acquired the Tomasek property from Mr. Pittman. The purchase price of the property approximated fair value.  In conjunction with the acquisition, the Company assumed a two year lease with Astoria Farms with annual rents of $18,749.

During the nine months ended September 30, 2014, the Company acquired the following farms:

			Total
		Date	approximate	Purchase		Acquisition
Acquisition / Farm	County	acquired	acres	price		costs		Type of acquisition
Erker (5 farms)	Kit Carson, CO	5/30/2014	3,171	$	7,644,339	$	5,017	Asset acquisition
Hudye (11 farms) (1)	Kit Carson and Cheyenne, CO and Sherman and Logan, KS	6/12/2014	12,500		24,500,000		63,836	Businesscombination
Broadwater	Morrill, NE	7/1/2014	640		1,040,666		666	Asset acquisition
Ruder	Yell, AR	9/24/2014	667		2,705,800		9,180	Business combination
			16,978	$	35,890,805	$	78,699

(1) On June 12, 2014, the Company acquired all of the outstanding stock in Hudye Farms U.S., Inc. (“HFUSI”), which owned an approximately 12,500-acre farm (referred to as the Hudye farm) located primarily in eastern Colorado, for $24.5 million, excluding related acquisition costs of $63,836.  The Company funded this business combination with cash available from the IPO.  All tenant leases were terminated by the previous owner prior to the closing of the acquisition.  On June 20, 2014, HFUSI was merged with and into FPI Burlington Farms LLC, a wholly owned subsidiary of the Company, with FPI Burlington Farms LLC surviving. FPI Burlington Farms LLC entered into new leases with tenants on June 23, 2014.  The new leases provide for aggregate annual cash rent of $1.2 million. Rent for 2014 was paid at lease execution in its entirety, without proration. In conjunction with the business combination, the Company acquired a tax built-in gain of $17.8 million.  No deferred tax liability was recorded with respect to the tax built-in gain as the Company has the ability and intent to hold the property for the required holding period.

Schedule of preliminary or final allocation of purchase price for farms acquired

The preliminary allocation of purchase price for the farms acquired during the nine months ended September 30, 2015 are as follows:

	Land		Groundwater		Irrigation improvements		Permanent plantings & other		Timber		Accounts receivable		Below market lease		Accrued property taxes		Total
Swarek	$	3,470,706	$	—	$	41,213	$	—	$	—	$	—	$	—	$	—	$	3,511,919
Stonington Bass		1,994,800		—		79,600		4,600		—		—		—		—		2,079,000
Benda Butler		606,566		—		—		—		—		—		—		(767)		605,799
Benda Polk		861,714		—		—		—		—		—		—		(716)		860,998
Timmerman		1,365,403		625,900		36,600		—		—		—		—		(1,683)		2,026,220
Cypress Bay		1,959,173		—		276,000		68,400		—		—		—		—		2,303,573
Nebraska Battle Creek farms (5 farms)		8,756,895		—		339,000		—		—		37,375		(88,950)		(21,725)		9,022,595
Northeast Nebraska farms (6 farms)		8,872,203		—		235,800		—		—		29,933		(140,647)		(16,080)		8,981,209
Drury		808,975		106,925		34,100		—		—		—		—		—		950,000
Sutter		1,300,739		595,017		104,300		—		—		—		—		—		2,000,056
Bobcat		2,808,131		—		183,500		—		—		30,217		—		2,902		3,024,750
Swindoll Darby		1,436,989		—		32,600		—		—		—		—		(1,132)		1,468,457
Abraham		761,894		—		—		—		—		—		—		(50)		761,844
Justice farms (8 farms)		80,758,395		—		95,831		37,500		32,500		—		—		(11,059)		80,913,167
Tomasek		681,088		—		—		—		—		9,375		—		—		690,463
Purdy		5,923,605		—		244,387		—		—		—		—		—		6,167,992
Matthews		5,337,735		—		77,475		161,000		—		—		—		—		5,576,210
Riccioni		903,810		—		286,292		1,367,493		—		—		—		—		2,557,595
	$	128,608,821	$	1,327,842	$	2,066,698	$	1,638,993	$	32,500	$	106,900	$	(229,597)	$	(50,310)	$	133,501,847

The allocation of the purchase price for the farms acquired during the nine months ended September 30, 2015 is preliminary and may change during the measurement period if the Company obtains new information regarding the assets acquired or liabilities assumed at the acquisition date.

The allocation of purchase price for the farms acquired during the nine months ended September 30, 2014 are as follows:

	Land		Groundwater		Irrigation improvements		Other		Cash		Accounts receivable		Accrued property taxes		Total
Erker (5 farms)	$	6,350,958	$	1,012,000	$	284,672	$	—	$	—	$	—	$	(3,291)	$	7,644,339
Hudye (11 farms)		23,466,271		730,550		246,109		70,000		1,000		—		(13,930)		24,500,000
Broadwater		848,077		—		179,100		18,000		—		—		(4,511)		1,040,666
Ruder		2,645,176		—		40,050		—		—		20,800		(226)		2,705,800
	$	33,310,482	$	1,742,550	$	749,931	$	88,000	$	1,000	$	20,800	$	(21,958)	$	35,890,805

Schedule of unaudited pro forma financial information

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Pro forma
Total operating revenues	$	4,102,300	$	1,402,790	$	9,210,664	$	3,899,326
Net income (loss)	$	788,304	$	141,798	$	842,369	$	671,112
Earnings per share basic and diluted
Income (loss) per basic share attributable to common stockholders	$	0.04	$	0.01	$	0.04	$	0.17
Income (loss) per diluted share attributable to common stockholders	$	0.04	$	0.01	$	0.04	$	0.17
Weighted-average number of common shares - basic		11,154,127		6,305,253		8,872,279		3,168,803
Weighted-average number of common shares - diluted		11,158,280		6,309,584		8,882,102		3,168,803