Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Equity

Note 7 – Equity

Authorized Equity

The Company is authorized to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock of which 2,400,000 were designated as Series A Preferred Stock. Holders of the Company’s common stock are entitled to receive dividends when authorized by the Company’s Board of Directors. In January 2024, the Company redeemed all 2,400,000 shares of its Series A Preferred Stock from its preferred shareholders, Modiv and their affiliates, and exchanged them for 2,794,597 shares of common stock.

Issuance of Equity Securities

For the three months ended March 31, 2024, the Company recorded approximately $27,946 to common stock and $11,609,670 to additional paid-in capital related to the redemption and exchange of all 2,400,000 shares of the Series A Preferred Stock shares for 2,794,597 common stock shares. Additionally, the Company recorded approximately $61,938 of stock issuance costs to additional paid-in capital for registration and legal counsel costs incurred to issue the new common stock shares exchanged for the Series A Preferred Stock shares.

In January 2024, the Company declared and paid final preferred stock dividends of $95,000 to holders of its Series A Preferred Stock shares. In January 2024, the Company also paid another $95,000 dividend on the Series A Preferred Stock declared in December 2023 and accrued as of December 31, 2023.

On June 27, 2024, the Operating Partnership and an accredited investor entered into a Unit Purchase Agreement (the “June 2024 Unit Purchase Agreement”) pursuant to which the Operating Partnership issued and sold to the investor 500,000 Series A Preferred Units at a price of $5.00 per unit for an aggregate purchase price of two million five hundred thousand dollars ($2,500,000) in cash. Under the terms of the Series A Preferred Units, the investor will be paid cumulative cash distributions in the amount of $0.325 per Series A Preferred Unit per year, payable monthly in arrears, on or about the 15th day of each month. Each of the investor and the Operating Partnership will have the right to cause the Operating Partnership to redeem the Series A Preferred Units after two (2) years for cash in an amount equal to $5.15 per Series A Preferred Unit plus any accrued but unpaid Series A Preferred Return, provided that the Operating Partnership may (with the prior written consent of the investor) cause the redemption orice to be satisfied by the issuance of a number of shares of common stock of the Company equal to the number of Series A Preferred Units being redeemed multiplied by 1.03 plus any accrued but unpaid Series A Preferred Return. If the Operating Partnership fails to declare and pay the Series A Preferred Return for a period of three consecutive months, the investor may exercise the foregoing redemption right within the 30-day period following such failure.

Warrants

Private Placement Warrants

On April 25, 2019, the Company raised $1,000,000 by issuing 50,000 Units with each Unit being comprised of one share of its Common Stock and one warrant to purchase one share of its common stock. Each Unit was sold for a price of $20.00 per Unit. The shares of the Company’s common stock and warrants included in the Units, were offered together, but the securities included in the Units are issued separately. The warrants are exercisable at a price of $20.00 per share of common stock, subject to adjustment in certain circumstances, and will expire seven years from the date of issuance.

On November 13, 2020, the Company raised $1,000,000 by issuing 50,000 Units with each Unit being comprised of one share of its Common Stock and one warrant to purchase one share of its common stock. Each Unit was sold for a price of $20.00 per Unit. The shares of the Company’s common stock and warrants included in the Units, were offered together, but the securities included in the Units are issued separately. The warrants are exercisable at a price of $20.00 per share of common stock, subject to adjustment in certain circumstances, and will expire seven years from the date of issuance.

Investor Warrants

On September 8, 2021, the Company issued and sold, in an underwritten public offering (the “Public Offering”), 1,500,000 Units, with each unit consisting of one share of common stock, and one warrant to purchase one share of common stock (the “Investor Warrants”). On September 30, 2021, the Company issued and sold an additional 165,000 Investor Warrants as part of the underwriter’s Over-Allotment Option. The Investor Warrants issued in the offering entitle the holder to purchase one share of common stock at a price equal to $10.00 for a period of five years.

Investor Warrants may be exercised on a cashless basis if there is no effective registration statement available for the resale of the shares of common stock underlying such warrants. In addition, after 120 days after the Investor Warrants are issued, any Investor Warrant may be exercised on a cashless basis for 10% of the shares of common stock underlying the Investor Warrant if the volume-weighted average trading price of the Company’s shares of common stock on Nasdaq was at any time below the then-effective exercise price of the Investor Warrant for 10 consecutive trading days. During the Six months ended June 30, 2024, 45,510 Investor Warrants were exercised on a cashless basis resulting in the issuance of 4,551 shares of common stock. During the three months ended March 31, 2023, 106,480 Investor Warrants were exercised on a cashless basis resulting in the issuance of 10,648 shares of common stock. See Note 11 Subsequent Events for Investor Warrants exercised after June 30, 2024.

Representative Warrants

In addition, the Company issued to Maxim Group LLC (or its designee) warrants to purchase an aggregate of 149,850 shares of common stock, which is equal to an aggregate of 9% of the number of shares of common stock sold in the Public Offering (the “Representative’s Warrants”). The Representative’s Warrants have an exercise price equal to $12.50, may be exercised on a cashless basis and became exercisable six months following the closing date and until September 2, 2026.

The Company has 819,360 and 929,890 warrants outstanding and exercisable as of June 30, 2024 and June 30, 2023, respectively, as summarized below. Investor Warrants issued on September 8 and 30, 2021 became exercisable on a cashless basis on January 6 and 28, 2022, respectively.

	As of June 30,
Issue Date	2024
April 25, 2019 at an exercise price of $20.00		50,000
November 13, 2020 at an exercise price of $20.00		50,000
September 8, 2021 at an exercise price of $10.00		404,510
September 8, 2021 at an exercise price of $12.50		135,000
September 30, 2021 at an exercise price of $10.00		165,000
September 30, 2021 at an exercise price of $12.50		14,850
		819,360

	Warrants			Weighted Average Price		Weighted Average Remaining Life
As of December 31, 2023		898,200		$	11.53		2.7
Exercised		(78,840	)		10.00
As of June 30, 2024		819,360		$	11.61		2.5
Warrants exercisable		819,360		$	11.61		2.5
	Warrants			Weighted Average Price		Weighted Average Remaining Life
As of December 31, 2022		1,102,900		$	11.25		3.7
Exercised		(173,010	)		10.00
As of June 30, 2023		929,890		$	11.38		3.2
Warrants exercisable		929,890		$	11.38		3.2

There was no intrinsic value for the warrants as of June 30, 2024 or 2023.

Stock Compensation

Generation Income Properties, Inc. 2020 Omnibus Incentive Plan

In connection with the Public Offering, the Company's Board of Directors adopted and stockholders approved, the Generation Income Properties, Inc. 2020 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), which became effective upon the completion of the Public Offering. The Omnibus Incentive Plan reserves 2.0 million shares of common stock for stock options, stock appreciation rights, performance shares, performance units, shares of common stock, restricted stock, restricted stock units, cash incentive awards, dividend equivalent units, or any other type of award permitted under the Omnibus Incentive Plan. As of June 30, 2024, 158,840 shares had been granted under the Omnibus Incentive Plan.

Restricted Common Shares issued to the Board and Employees

The following is a summary of restricted shares for the six months ended June 30, 2024 and 2023:

	2024			2023
Number of Shares Outstanding at beginning of period		91,516			58,502
Restricted Shares Issued		-			98,593
Restricted Shares Vested		(43,364	)		(46,213	)
Number of Shares Outstanding at end of period		48,152			110,882

On June 15, 2024, the Company issued restricted stock units with respect to an aggregate of 61,275 shares of common stock to non-employee directors of the Company, excluding the Chairman of the Board, David Sobelman.

The Company recorded stock based compensation expense of $94,935 and $77,039 and $189,870 and $167,687 during the three and six months ended June 30, 2024 and 2023, respectively.

Cash Distributions

While the Company is under no obligation to do so, the Company has historically declared and paid distributions to its common stockholders and Operating Partnership unit holders, provided that On July 3, 2024, the Company announced that its Board of Directors determined to suspend the Company’s regular dividend, commencing with the monthly dividends that would have been paid in July 2024.

The issuance of future distributions will be determined by the Company's board of directors based on the Company's financial condition and such other factors as the Company's board of directors deems relevant. The Company has not established a minimum distribution, and the Company's charter does not require that the Company issue distributions to its stockholders other than as necessary to meet REIT qualification standards.

The following is a summary of monthly distributions to common stockholders and Operating Partnership unit holders:

Authorized Date	Record Date	Per Share/Unit
June 3, 2024	June 15, 2024	$	0.039
May 3, 2024	May 15, 2024	$	0.039
April 4, 2024	April 15, 2024	$	0.039
January 3, 2024	March 15, 2024	$	0.039
January 3, 2024	February 14, 2024	$	0.039
January 3, 2024	January 15, 2024	$	0.039
October 3, 2023	December 15, 2023	$	0.039
October 3, 2023	November 15, 2023	$	0.039
October 3, 2023	October 15, 2023	$	0.039
July 3, 2023	September 15, 2023	$	0.039
July 3, 2023	August 15, 2023	$	0.039
July 3, 2023	July 15, 2023	$	0.039
April 3, 2023	June 15, 2023	$	0.039
April 3, 2023	May 15, 2023	$	0.039
April 3, 2023	April 15, 2023	$	0.039
January 3, 2023	March 15, 2023	$	0.039