Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This report contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained herein. When used in this report, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. Actual results, performance or achievements could differ materially from the results expressed in, or implied by these forward-looking statements. Readers should be aware of important factors that, in some cases, have affected, and in the future could affect, actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, funds derived from operations, cash available for distribution, cash flows, liquidity and prospects include, but are not limited to, the risk factors listed from time to time in our reports with the Securities and Exchange Commission, including, in particular, those set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

In this Quarterly Report on Form 10-Q, references to the "Company," "we," "us," "our" or similar terms refer to Generation Income Properties, Inc., a Maryland corporation, together with its consolidated subsidiaries, including Generation Income Properties, L.P., a Delaware limited partnership, which we refer to as our operating partnership (the "Operating Partnership"). As used in this Quarterly Report, an affiliate, or person affiliated with a specified person, is a person that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

Overview

We are an internally managed, Maryland corporation focused on acquiring retail, office and industrial real estate located in major U.S. markets. We initiated operations during the year ended December 31, 2015 and have elected to be taxed as a REIT for federal income tax purposes. Substantially all of the Company's assets are held by, and operations are conducted through, the Operating Partnership and the Operating Partnership's direct and indirect subsidiaries. The Company is the general partner of the Operating Partnership and as of September 30, 2025 owned 99.6% of the outstanding common units of the Operating Partnership. The Company formed a Maryland entity GIP REIT OP Limited LLC in 2018 that owns 0.001% of the Operating Partnership.

Public Offering and Nasdaq Listing

In September 2021, the Company closed an underwritten public offering of 1,665,000 units at a price to the public of $10 per unit generating net proceeds of $13.8 million. Each unit consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price equal to $10 per share. The common stock and warrants included in the units (which were separated into one share of common stock and one warrant) currently trade on the Nasdaq Capital Market ("Nasdaq") under the symbols "GIPR" and "GIPRW," respectively.

Our Investments

The following are characteristics of our properties as of September 30, 2025:

Given the nature of our leases, our tenants either pay the realty taxes directly or reimburse us for such costs. We believe all of our properties are adequately covered by insurance.

The table below presents an overview of the properties in our portfolio as of September 30, 2025:

Distributions

From inception through September 30, 2025, we have distributed $5,024,622 to common stockholders.

Recent Developments

Brown Family Enterprises Loan

On April 25, 2025, Generation Income Properties, Inc. (the "Company"), through its operating partnership Generation Income Properties L.P. (the "Operating Partnership"), entered into a loan transaction for a $1.0 million loan that is evidenced by a secured non-convertible promissory note (the "Promissory Note") payable to Brown Family Enterprises, LLC ("Lender") in the original principal amount of $1 million. The Promissory Note provides that an amount equal to $500,000 in aggregate unpaid principal amount of the loan, together with accrued but unpaid interest at an initial interest rate of 16% per annum, will be due on the date that is 90

days from the date of the Promissory Note (the "Initial Payment Date"). Thereafter, the Promissory Note bears a fixed interest rate of 9%, simple interest, and interest is payable monthly after the initial 90 days, with all remaining principal and accrued but unpaid interest being due on the 180thday after the issuance of the Promissory Note. Interest that is accrued but unpaid as of the Initial Payment Date will be added to the principal amount of the Promissory Note. The Promissory Note may be repaid without penalty at any time. The Promissory Note is secured by the assets of the Operating Partnership under a Security Agreement previously entered into with Lender on July 21, 2024.

On October 27, 2025, the Company entered into a First Amendment to the Secured Promissory Note originally issued on April 25, 2025 to Brown Family Enterprises, LLC in the principal amount of $1.0 million. The First Amendment extends the Note's maturity date to December 15, 2025 and provides for a $20,000 extension fee payable on the revised maturity date. Except as amended to reflect the new maturity and the extension fee, all other terms of the Note remain unchanged, including the interest rates, security interests, and covenants previously disclosed.

Property Sales

On May 29, 2025, the Company completed the sale of its Starbucks-occupied retail building located in Tampa, Florida for a purchase price of $3,450,000.

On May 29, 2025, Company completed the sale of its Auburn University-occupied industrial building located in Huntsville, Alabama for a purchase price of $7,200,000, in cash.

Promissory Notes

On May 29, 2025, the Company, through its operating partnership Generation Income Properties L.P. (the "Operating Partnership"), entered into a loan transaction for $332,000.00 that is evidenced by a promissory note (the "NAI Chase Promissory Note") issued to Chase Commercial Realty, Inc. d/b/a NAI Chase ("Chase"). The NAI Chase Promissory Note provides that an amount equal to the aggregate unpaid principal amount of the loan, together with accrued but unpaid interest at an interest rate of 7.5% per annum, will be due on December 31, 2025. The NAI Chase Promissory Note may be repaid without penalty at any time. The NAI Chase Promissory Note relates to broker's fees payable by the Company to Chase in connection with the sale of the Company's Auburn University-occupied industrial building located in Huntsville, Alabama, as further described under Item 2.01 above.

On May 29, 2025, the Company's Chief Executive Officer (the "Guarantor") executed a Personal Guaranty (the "Guaranty") in favor of Chase, in connection with the loan made by Chase to the Operating Partnership pursuant to the Chase Promissory Note. Under the terms of the Guaranty, the Guarantor unconditionally and irrevocably guarantees the full and punctual payment of all obligations of the Operating Partnership under the Chase Promissory Note, including principal, interest, and enforcement costs. The Guarantor's liability is limited to the maximum amount enforceable under applicable bankruptcy and fraudulent transfer laws.

On May 29, 2025, GIPFL 1300 S Dale Mabry, LLC ("GIPFL"), an indirect wholly owned subsidiary of the Company, entered into a loan transaction for $103,500 that is evidenced by a promissory note (the "SRS Promissory Note") issued to SRS Real Estate Partners, LLC. ("SRS"). The SRS Promissory Note provides that an amount equal to the aggregate unpaid principal amount of the loan, together with accrued but unpaid interest at an interest rate of 0% per annum, will be due on December 31, 2025. The SRS Promissory Note may be repaid without penalty at any time. The SRS Promissory Note relates to broker's fees payable by the Company to SRS in connection with the sale of the Company's Starbucks-occupied retail building located in Tampa, Florida, as further described under Item 2.01 above.

On May 29, 2025, the Company, through the Operating Partnership, entered into a loan transaction with the Company's Chief Executive Officer, for $610,000 to fund closing costs relating to the sale of the Company's Auburn University-occupied industrial building located in Huntsville, Alabama and Starbucks-occupied retail building located in Tampa, Florida, as further described under Item 2.01 above. The loan is evidenced by a promissory note (the "Sobelman Promissory Note") payable to the David E. Sobelman Revocable Trust, under an agreement dated September 5, 2007. The Sobelman Promissory Note provides that an amount equal to the aggregate unpaid principal amount of the loan, together with accrued but unpaid interest at an interest rate of 5.75% per annum, previously due on August 31, 2025, has been extended to December 31, 2025, has been extended to December 31, 2025.

Valley National Mortgage Loan

On June 13, 2025, GIPDC 3707 14th St, LLC (the "Borrower"), an indirect subsidiary of the Company, entered into a Loan Agreement (the "Loan Agreement") with Valley National Bank (the "Lender"), pursuant to which the Lender made a mortgage loan in the original principal amount of $1.1 million (the "Loan"). The Loan is secured by a first-priority Deed of Trust and Assignment of Rents and Leases on the Borrower's fee interest in a previously unencumbered single-tenant property located at 3707-3711 14th Street NW, Washington, D.C. (the "Property").

The Loan is evidenced by a Promissory Note, dated June 13, 2025 (the "Note"), bearing interest at a fixed rate of 6.50% per annum. The net proceeds of the Loan were used to extract equity from the Property for general corporate purposes. At closing, $750,000 of the Loan proceeds was disbursed, with an additional $350,000 (the "Renewal Funds") to be disbursed upon satisfaction of certain conditions, including the delivery to the Lender, on or before March 31, 2026, of an executed lease renewal with the Property's current tenant,

7-Eleven, Inc., extending the lease for an additional five years beyond its current expiration date of March 31, 2026. Monthly interest-only payments are due beginning July 13, 2025, through June 13, 2026. If the required lease renewal is delivered and all other conditions are satisfied to the Lender's sole satisfaction, the Renewal Funds will be disbursed, and the maturity date of the Loan will be automatically extended to June 13, 2030. In such case, beginning July 13, 2026, the borrower will make monthly payments of principal and interest based on a 25-year amortization schedule, with a final balloon payment due on the extended maturity date of June 13, 2030. If the lease renewal is not delivered by March 31, 2026, the Loan will mature on that date, and all outstanding principal, accrued interest, and other amounts will become immediately due and payable.

The Loan Agreement contains customary representations, covenants, and events of default, including financial reporting obligations and a requirement to maintain a minimum debt service coverage ratio (DSCR) of at least 1.50:1.00, tested quarterly on a trailing twelve-month basis.

In connection with the Loan, the Executive Chairman of the Company, entered into a Guaranty of Nonrecourse Carveout Obligations (the "Guaranty Agreement"), pursuant to which he unconditionally guaranteed certain nonrecourse carveout obligations of the Borrower to the Lender.

Results of Operations

Operating results for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

Revenue

During the three and nine months ended September 30, 2025, total revenue from operations were $2,470,109 and $7,283,974, respectively, as compared to $2,400,282 and 7,092,690 for the three and nine months ended September 30, 2024, respectively. Revenue increased by $69,827 and $191,284 during the three and nine months ended September 30, 2025, respectively, compared with the three and nine months ended September 30, 2024.

During the three and nine months ended September 30, 2025, we incurred total operating expenses of $4,169,441 and $12,832,102, respectively, as compared to $3,769,715 and $11,133,386, respectively, for the three and nine months ended September 30, 2024. Operating expenses increased overall by $399,726 and $1,698,716, respectively, as follows:

Net loss

During the three and nine months ended September 30, 2025 and 2024, we generated a net loss of $1,717,854 and $6,981,835, and $2,103,549 and $5,444,133, respectively.

Net income attributable to non-controlling interests

During the three and nine months ended September 30, 2025 and 2024, net income attributable to non-controlling interest was $1,109,106 and $2,999,612, and $866,047 and $2,612,405, respectively.

Net loss attributable to common shareholders

During the three and nine months ended September 30, 2025 and 2024, we generated a net loss attributable to our shareholders of $2,826,960 and $9,981,447 and $2,969,596 and $8,151,538, respectively.

Liquidity and Capital Resources

We require capital to fund our investment activities and operating expenses. Our capital sources may include net proceeds from offerings of our equity securities, cash flow from operations, proceeds from property dispositions, and borrowings under credit facilities. As of September 30, 2025, we had total cash (unrestricted and restricted) of $281,788, properties with a gross cost basis of $97,011,131 and outstanding mortgage loans with a principal balance of $55,762,746.

In September 2021, we closed an underwritten public offering of 1,665,000 units at a price to the public of $10 per unit generating net proceeds of $13.8 million including issuance costs incurred during the years ended December 31, 2021 and 2020.

On April 1, 2022, we entered into two mortgage loan agreements with an aggregate balance of $13.5 million to refinance seven of our properties. The loan agreements consist of one loan in the amount of $11.4 million secured by six properties and allocated to each property based on each property's appraised value, and one loan in the amount of $2.1 million on the property previously held in the tenancy-in-common investment at an interest rate of 3.85% from April 1, 2022 through and until March 31, 2027. In conjunction with the LC2 Investment to purchase the remaining interest in the tenancy-in-common interest discussed above, the Company assumed the original $2.1 million loan on the property with a remaining balance of $2,079,178 and recognized a discount of $383,767. Effective April 1, 2027 and through the maturity date of March 31, 2032, the interest rate adjusts to the 5-year Treasury plus 2.5% and is subject to a floor of 3.85%. Our CEO entered into a guarantee agreement pursuant to which he guaranteed the payment obligations under the promissory notes if they become due as a result of certain "bad-boy" provisions, individually and on behalf of the Operating Partnership.

On August 10, 2023, GIP13, LLC, a Delaware limited liability company and wholly owned subsidiary of GIP SPE ("GIP Borrower"), entered into a Loan Agreement with Valley pursuant to which Valley made a loan to the Company in the amount of $21.0 million to finance the acquisition of the Modiv Portfolio. The outstanding principal amount of the loan bears interest at an annual rate for each 30-day interest period equal to the compounded average of the secured overnight financing rate published by Federal Reserve Bank of New York for the thirty-day period prior to the last day of each 30-day interest rate for the applicable interest rate period plus 3.25%, with interest payable monthly after each 30-day interest period. However, the Company entered into an interest rate swap to fix the interest rate at 7.47% per annum. Payments of interest and principal in the amount of approximately $156,000 are due and payable monthly, with all remaining principal and accrued but unpaid interest due and payable on a maturity date of August 10, 2028. The loan may generally be prepaid at any time without penalty in whole or in part, provided that there is no return of loan fees and prepaid financing fees. The loan is secured by first mortgages and assignments of rents in the properties comprising the Modiv Portfolio and eight other properties held by subsidiaries of GIP SPE that had outstanding loans with Valley. All of the mortgaged properties cross collateralize the loan, and the loan is guaranteed by the Operating Partnership and the subsidiaries of the Company that hold the properties that comprise the Modiv Portfolio. The loan agreement also provides for customary events of default and other customary affirmative and negative covenants that are applicable to GIP Borrower and its subsidiaries, including reporting covenants and restrictions on investments, additional indebtedness, liens, sales of properties, certain mergers, and certain management changes. The Company's President and CEO also entered into a personal, full recourse guarantee with a $7,500,000 cap.

On June 27, 2024, the Operating Partnership and an accredited investor entered into a 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 price 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.

Our President and CEO has also personally guaranteed the repayment of the $1.2 million loan secured by the Company's Sherwin-Williams - Tampa, FL property. In addition, our President and CEO has also provided a guaranty of the Company's nonrecourse carveout liabilities and obligations in favor of the lender for the GSA and PRA Holdings, Inc. - Norfolk, VA mortgage loans ("Bayport loans") with an aggregate principal amount of $11.3 million.

During the three and nine months ended September 30, 2025, we incurred a guaranty fee expense to our President and CEO of $71,056 and $248,682, respectively, recorded to interest expense. A guaranty fee expense of $102,023 and $304,245 was incurred during the three and nine months ended September 30, 2024, respectively.

On June 13, 2025, GIPDC 3707 14th St, LLC, an indirect subsidiary of the Company, entered into a secured Loan Agreement with Valley National Bank (the "Lender"), pursuant to which the Lender made a mortgage loan in the original principal amount of $1.1 million (the "Loan"). The proceeds of the loan will be used for general corporate purposes.

On August 9, 2022, we entered a Redemption Agreement with a unit holder. As such, we recorded another payable - related party in the amount of $2,912,300 upon execution of the Redemption Agreement entered into July 20, 2022 and has paid the note in full as of September 30, 2025. Remaining balances of $0 and $452,260 outstanding as of September 30, 2025 and 2024, respectively.

On October 14, 2022, we entered into a loan transaction that is evidenced by a secured non-convertible promissory note to Brown Family Enterprises, LLC, a preferred equity partner and therefore a related party, for $1.5 million that is due on October 14, 2024, and bears a fixed interest rate of 9% with simple interest payable monthly. On July 21, 2023, the Company amended and restated the promissory note to reflect an increase in the loan to $5.5 million and extend the maturity date thereof from October 14, 2024 to October 14, 2026. Except for the increase in the amount of the Loan and Note and the extension of the maturity date thereof, no changes were made to the original note. The loan may be repaid without penalty at any time. The loan is secured by the Operating Partnership's equity interest in its current direct subsidiaries that hold real estate assets pursuant to the terms of a security agreement between the Operating Partnership and Brown Family Enterprises, LLC.

We currently obtain the capital required to primarily invest in and manage a diversified portfolio of commercial net lease real estate investments and conduct our operations from the proceeds of equity offerings, debt financings, preferred minority interest obtained from third parties, issuance of Operating Partnership units and from any undistributed funds from our operations.

As a result of our recurring losses, our projected cash needs, and our current liquidity, substantial doubt exists about the Company's ability to continue as a going concern one year after the date that these financial statements are issued. The Company's ability to continue as a going concern is contingent upon successful execution of management's plan to improve the Company's liquidity and profitability. Our current and anticipated liquidity is less than the principal balance of these obligations.

Outstanding mortgage loans payable consisted of the following as of September 30, 2025 and December 31, 2024, respectively:

(a)Loan subject to prepayment penalty

(b)Fixed via interest rate swap

(c)One loan in the amount of $11.4 million secured by six properties and allocated to each property based on each property's appraised value.

(d)Adjustment effective April 1, 2027 equal to 5-year Treasury plus 2.5% and subject to a floor of 3.85%

(e) One loan in the amount of $21.0 million secured by 13 properties and allocated to each property based on each property's appraised value.

We amortized debt issuance costs during the three and nine months ended September 30, 2025 and 2024 to interest expense of approximately $48,460 and $60,532 and $137,097 and $156,091, respectively. During the nine months ended September 30, 2025 and 2024, the company paid $72,900 and $0, respectively, in debt issuance costs.

Each mortgage loan requires the Company to maintain certain debt service coverage ratios as noted above. In addition, two mortgage loans, one encumbered by six properties and requiring a 1.50 DSCR, and another stand alone mortgage loan requiring a 1.50 DSCR, require the Company to maintain a 54% loan to fair market stabilized value ratio. Fair market stabilized value shall be determined by the lender by reference to acceptable guides and indices or appraisals from time to time at its discretion. As of September 30, 2025, the Company was in compliance with all covenants.

Minimum required principal payments on our debt as of September 30, 2025 are as follows:

On February 8, 2023, we entered into new Amended and Restated Limited Liability Company Agreements for the Norfolk, Virginia properties, GIPVA 2510 Walmer Ave, LLC ("GIPVA 2510") and GIPVA 130 Corporate Blvd, LLC ("GIPVA 130"), in which we, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new preferred member, Brown Family Enterprises, LLC, through the issuance of preferred membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130. GIPVA 2510 and GIPVA 130 (the "Virginia SPEs") hold our Norfolk, Virginia properties. In addition, both of the Virginia SPEs and Brown Family Enterprises, LLC entered into Unit Purchase Agreements in which GIPVA 2510 issued and sold 180,000 Class A Preferred Units at a price of $10.00 per unit for an aggregate price of $1,800,000, and GIPVA 130 issued and sold 120,000 Class A Preferred Units at a price of $10.00 per unit for an aggregate price of $1,200,000. The Operating Partnership is the general manager of the subsidiary while Brown Family Enterprises, LLC is a preferred equity member. Pursuant to the agreement, we are required to pay the preferred equity member a 7% IRR paid on a monthly basis and will share in 16% of the equity in each of the Virginia SPEs upon a capital transaction resulting in distributable proceeds. After 24 months, Brown Family Enterprises, LLC has the right to redeem the preferred equity at redemption value. On July 25, 2024, we entered into First Amendments to the Second Amended and Restated Limited Liability Company Agreements, dated as of February 8, 2023, for each of these entities revising the redemption date from February 8, 2025 to February 8, 2027. Because of the redemption right, the non-controlling interest is presented as temporary equity at an aggregated redemption value of $3,000,000 as of September 30, 2025.

In connection with the acquisition of the Modiv Portfolio, the Operating Partnership and LC2 entered into an Amended and Restated Limited Liability Company Agreement for GIP SPE (the "GIP SPE Operating Agreement") pursuant to which LC2 made a $12.0 million initial capital contribution to GIP SPE, together with a commitment to make an additional $2.1 million contribution upon the satisfactory completion of the acquisition of a tenant-in-common interest held by a third party in the Company's Rockford, Illinois property (the "LC2 Investment"). The Company completed the acquisition of such tenant-in-common interest on September 7, 2023, for a purchase price of $1.3 million and LC2 made the additional $2.1 million capital contribution on September 11, 2023. LC2 made the LC2 Investment in exchange for a preferred equity interest in GIP SPE (the "Preferred Interest"). The Preferred Interest has a cumulative accruing distribution preference of 15.5% per year, compounded monthly, a portion of which in the amount of 5% per annum (compounded monthly) is deemed to be the "current preferred return," and the remainder of which in the amount of 10.5% per annum (compounded monthly) is deemed to be the "accrued preferred return." The GIP SPE operating agreement provides that operating distributions by GIP SPE will be made first to LC2 to satisfy any accrued but unpaid current preferred return, with the balance being paid to the Operating Partnership, unless the "annualized debt yield" of GIP SPE is less than 10%, in which case the balance will be paid to LC2. For this purpose, "annualized debt yield" is calculated as the sum of senior debt and LC2 Investment divided by the trailing three-month annualized adjusted net operating income (as defined in the GIP SPE Operating Agreement) of GIP SPE. The GIP SPE Operating Agreement also provides that distributions from capital transactions will be paid first to LC2 to satisfy any accrued but unpaid preferred return, then to LC2 until the "Make-Whole Amount" (defined as the amount equal to 1.3 times the LC2 Investment) is reduced to zero, and then to the Operating Partnership.

The Preferred Interest is required to be redeemed in full by the Company on or before August 10, 2025 (the"Mandatory Redemption Date") for a redemption amount equal to the greater of (i) the amount of the LC2 Investment plus the accrued preferred return, and (ii) the Make-Whole Amount. Upon a failure to timely redeem the Preferred Interest, the preferred return will accrue at an increased rate of 18% per annum, compounded monthly. The Company has the right to extend the Mandatory Redemption Date for two consecutive 12-month extension periods, provided that (i) LC2 is paid an extension fee of 0.01% of the outstanding amount of the LC2 Investment for each such extension, (ii) the preferred return is increased from 15.5% to 18% of which the accrued preferred return is increased

from 10.5% to 13%, (iii) the trailing 6-month annualized adjusted net operating income (as defined in the GIP SPE Operating Agreement) is in excess of $5.0 million, (iv) GIP SPE and its subsidiaries' senior debt is extended through the end of the extension period, and there are no defaults under the GIP SPE Operating Agreement.

On August 7, 2025, the Company exercised its first 12-month extension option under the GIP SPE Operating Agreement, extending the Mandatory Redemption Date from August 10, 2025 to August 10, 2026. In connection with the extension, the Company paid LC2 an extension fee of $141,000 (equal to 100 basis points of the outstanding LC2 Investment), increased the "Preferred Equity Return" under the GIP SPE Operating Agreement from 15.5% to 18% per annum, and increased the "Accrued Preferred Return" under the agreement from 10.5% to 13% per annum, while the "Current Preferred Return" under the agreement remained at 5% per annum. The Company also confirmed that the trailing nine-month annualized adjusted net operating income exceeded $5.0 million, the senior loans had been extended through the end of the extension period, and there were no material breaches or defaults under the GIP SPE Operating Agreement.

Under the GIP SPE Operating Agreement, GIP SPE is also required to pay to Loci Capital, an affiliate of LC2, an equity fee of 1.5% of the LC2 Investment, with 1% having been paid upon the execution and delivery of the GIP SPE Operating Agreement and the 0.5% payable upon redemption of the LC2 Investment.

Due to the redemption right, the Preferred Interest is presented as temporary equity at redemption value of $14,100,000 plus accrued but unpaid preferred interest of $4,461,228 as of September 30, 2025.

Each of the preferred members described above may redeem their interest on or after the Redemption date (second year anniversary of the closing of the acquisition), at the discretion of such preferred member, as applicable, all or a portion thereof, of such preferred member's pro-rata share of the redemption value in the form of the units of the Operating Partnership ("GIP LP Units"). Such GIP LP Units shall be subject to all such restrictions, such as with respect to transferability, as reasonably imposed by the Operating Partnership. The number of GIP LP Units issued to any preferred member shall be determined by dividing the total amount of the redemption value that such preferred member shall receive in GIP LP Units by a 15% discount of the average 30-day market price of Generation Income Properties, Inc. common stock. GIP LP Units shall then be convertible into common stock of Generation Income Properties, Inc. on a 1:1 basis in accordance with the partnership agreement of the Operating Partnership. Additionally, the Operating Partnership has the right to redeem the preferred equity at redemption value with cash after the second year anniversary of the closing of the acquisition.

The primary objective of our financing strategy is to maintain financial flexibility using retained cash flows, long-term debt and common and perpetual preferred stock to finance our growth. We intend to have a lower-leveraged portfolio over the long-term after we have acquired an initial substantial portfolio of diversified investments. During the period when we are acquiring our current portfolio, we will employ greater leverage on individual assets (that will also result in greater leverage of the current portfolio) in order to quickly build a diversified portfolio of assets.

Cash from Operating Activities

Net cash provided by operating activities was $415,553 and $783,511 for the nine months ended September 30, 2025 and 2024, respectively.

Cash from Investing Activities

Net cash provided by (used in) investing activities during the nine months ended September 30, 2025 and 2024 was $10,333,595 and ($5,960,892), respectively.

Cash from Financing Activities

Net cash (used in) and provided by financing activities was ($11,114,799) and $3,607,045 for the nine months ended September 30, 2025 and 2024, respectively.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Non-GAAP Financial Measures

Our reported results are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We also disclose funds from operations ("FFO"), adjusted funds from operations ("AFFO"), core funds from operations ("Core FFO") and core adjusted funds of operations ("Core AFFO") all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.

FFO and related measures do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income or loss as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as GAAP net income or loss adjusted to exclude, net gains from sales of property and adding back real estate depreciation; namely, excluding from net income depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by an entity. We then adjust FFO for non-cash revenues and expenses such as amortization of deferred financing costs, above and below market lease intangible amortization, straight line rent adjustment where the Company is both the lessor and lessee, and non-cash stock compensation to calculate Core AFFO.

FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other companies. We believe that Core FFO and Core AFFO are useful measures for management and investors because they further remove the effect of non-cash expenses and certain other expenses that are not directly related to real estate operations. We use each as measures of our performance when we formulate corporate goals.

As FFO excludes depreciation and amortization, gains and losses from property dispositions that are available for distribution to stockholders and non-recurring or extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, providing a perspective not immediately apparent from net income or loss. However, FFO should not be viewed as an alternative measure of our operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties which could be significant economic costs and could materially impact our results from operations. Additionally, FFO does not reflect distributions paid to redeemable non-controlling interests.

The following tables reconcile net income (net loss), which we believe is the most comparable GAAP measure, to FFO, Core FFO, AFFO and Core AFFO:

Critical Accounting Policies

Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. See our audited consolidated financial statements included herein for a summary of our significant accounting policies.