Note 5—Real Estate

During the three months ended March 31, 2017, the Company completed 11 acquisitions which were accounted for as asset acquisitions in Illinois, South Carolina, Michigan, Georgia, Kansas, California, and Colorado. Consideration totaled $98.6 million and was comprised of both cash and OP units. No intangible assets were acquired through these acquisitions.

During the three months ended March 31, 2016, the Company completed 7 acquisitions which were accounted for as asset acquisitions in Georgia, Texas, Illinois, and Louisiana. Consideration totaled $237.9 million and was comprised of both cash, OP units, and preferred units. No intangible assets were acquired through these acquisitions.

The following outlines the preliminary fair value allocation of the assets and liabilities acquired as a result of the completion of the AFCO Mergers accounted for as a business combination as of March 31, 2017:


($ in thousands)
Land, at cost	$	180,309
Irrigation improvements		26,045
Permanent plantings		48,308
Buildings		1,493
In-place leases(1)		1,139
Lease origination costs		264
Cash		3,832
Other		1,250
Inventory		99
Accrued expenses		(16,595)
Gross Total Consideration		246,144
Mortgage notes and bonds payable, net		(75,000)
Total Consideration	$	171,144

(1)

Weighted average amortization period of the in-place lease liability is 3 years.

The following outlines the fair value calculation of the assets and liabilities acquired as a result of the completion of a Michigan acquisition accounted for as a business combination as of March 31, 2016:


($ in thousands)
Land, at cost	$	779
Irrigation improvements		63
Permanent plantings		788
Total Consideration	$	1,630

The Company has included the results of operations for the acquired real estate in the consolidated statements of operations from the dates of acquisition. The real estate acquired in business combinations during the three months ended March 31, 2017 contributed $1.8 million to total revenue and $0.7 million to net loss (including related real estate acquisition and due diligence costs of $0.2 million).

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 combination 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 the business combination during the three months ended March 31, 2017 had been acquired on January 1, 2017, and January 1, 2016.


	For the three months ended
($ in thousands)	March 31,
Proforma (unaudited)	2017		2016
Revenue	$	7,150	$	4,692
Proforma estimate(1)		993		2,793
Total operating revenue	$	8,143	$	7,485

Net loss	$	(2,001)	$	(1,930)
Proforma estimate		(367)		(1,032)
Total net loss	$	(2,368)	$	(2,962)

Earnings per share basic and diluted
Loss per basic share attributable to common stockholders	$	(0.09)	$	(0.25)
Loss per diluted share attributable to common stockholders	$	(0.09)	$	(0.25)
Weighted-average number of common shares - basic		26,699		11,834
Weighted-average number of common shares - diluted		26,699		11,834

(1)

Represents a linear extrapolation of revenues over the full quarter, and therefore does not take into account the irregularity of certain of the Company's revenue components, such as crop share lease payments.

Prudential Termination Agreement

On February 18, 2017, the Company entered into a Termination Agreement (the “Termination Agreement”) with Prudential Capital Mortgage Company (the “Prudential Sub-Advisor”) pursuant to which the Company and the Prudential Sub-Advisor agreed to terminate, effective as of March 31, 2017, the Amended and Restated Sub-Advisory Agreement (the “Sub-Advisory Agreement”), dated as of October 23, 2015, by and among American Farmland Company, American Farmland Advisors, American Farmland Company L.P. and Prudential and certain related property management agreements (together with the Sub-Advisory Agreement, the “Prudential Agreements”).

The Termination Agreement provided that, as of March 31, 2017, Prudential will no longer provide services to the Company under the Prudential Agreements. The Company paid the Prudential Sub-Advisor $1.6 million in cash, which is equal to the fee that would have been owed to Prudential for services through the quarter ended March 31, 2017, plus a termination fee of approximately $0.2 million. The income statement impact to the Company for the period totaled $0.7 million with the remaining $0.9 million being included in the accruals as a component of the purchase accounting surrounding the AFCO Mergers as this represented the costs incurred by AFCO prior to the Mergers.