Generation Income Properties (GIPR) risk factors, FY2025 10-K

Risks Related to Our Business and Properties

1. 01We have limited operating history and may not be able to successfully operate our business or generate sufficient operating cash flows to make or sustain distributions to our stockholders
2. 02We own twenty-five properties as of the report date37% rewritten
3. 03Many of our current and future properties depend upon a single tenant for all or a majority of the rental income, and our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency, a downturn in the business, or a lease termination of a single tenant
4. 04We have experienced losses in the past, and we will likely experience similar losses in the near future34% rewritten
5. 05We may change our investment objectives without seeking stockholder approval
6. 06We may not be successful in identifying and consummating suitable investment opportunities
7. 07If we cannot obtain additional capital, our ability to make acquisitions and lease properties will be limited. We are subject to risks associated with debt and capital stock issuances, and such issuances may have adverse consequences to holders of shares of our common stock
8. 08making any change to GIP SPE’s accounting practices or policies that could be material to either GIP SPE or its members
9. 09We may never reach sufficient size to achieve diversity in our portfolio28% rewritten
10. 10The market for real estate investments is highly competitive
11. 11We are required to make a number of judgments in applying accounting policies, and different estimates and assumptions in the application of these policies could result in changes to our reporting of financial condition and results of operations
12. 12Because of our holding company structure, we depend on our Operating Partnership subsidiary and its subsidiaries for cash flow and we will be structurally subordinated in right of payment to the obligations of such Operating Partnership subsidiary and its subsidiaries
13. 13We may incur losses as a result of ineffective risk management processes and strategies
14. 14You will not have the opportunity to evaluate our investments before we make them
15. 15The loss of any of our executive officers could adversely affect our ability to continue operations
16. 16Our President, Chief Executive Officer, and Chairman of the Board has guaranteed certain of our indebtedness, which could constitute a conflict of interest
17. 17We rely on information technology networks and systems in conducting our business, and any material failure, inadequacy, interruption or security failure of that technology could harm our business24% rewritten
18. 18Our structure may result in potential conflicts of interest with limited partners in our Operating Partnership whose interests may not be aligned with those of our stockholders68% rewritten
19. 19Pandemics or other health crises, such as the COVID-19 pandemic, may adversely affect our tenants' financial condition, the profitability of our properties, and our access to the capital markets and could have a material adverse effect on our business, results of operations, cash flows and financial condition79% rewritten
20. 20recommend lockdowns again in the future due to a pandemic or other similar health crises, tenants could request rent concessions or seek to renegotiate future rentsNew
21. 21Government budgetary pressures and priorities, and trends in government employment and office leasing may adversely impact our business
22. 22The third-party valuations of real estate investments we seek to purchase often times includes the value of a commercial lease and the loss of such a lease could result in the value of the real property declining
23. 23Our operating results will be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, and we cannot assure you that we will be profitable or that we will realize growth in the value of our real estate properties
24. 24If a major tenant declares bankruptcy, we may be unable to collect balances due under its leases, which would have a harmful effect on our financial condition and ability to pay distributions to you
25. 25A high concentration of our properties in a particular geographic area, or with tenants in a similar industry, magnify the effects of downturns in that geographic area or industry21% rewritten
26. 26We own twenty-five of our properties through preferred equity partnerships, which may lead to disagreements with our partners and adversely affect our interest in the partnerships
27. 27If a sale-leaseback transaction is re-characterized in a tenant’s bankruptcy proceeding, our financial condition could be adversely affected
28. 28We may obtain only limited warranties when we purchase a property and would have only limited recourse in the event our due diligence did not identify any issues that lower the value of our property
29. 29Our real estate investments may include special use single-tenant properties that may be difficult to sell or re-lease upon lease terminations
30. 30We may be unable to secure funds for future tenant improvements, build outs or capital needs, which could adversely impact our ability to pay cash distributions to our stockholders
31. 31Our inability to sell a property when we desire to do so could adversely impact our liquidity and adversely affect our ability to resume the payment of cash distributions to you
32. 32We may not be able to sell our properties at a price equal to, or greater than, the price for which we purchased such property, which may lead to a decrease in the value of our assets
33. 33We may acquire or finance properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties
34. 34Rising expenses could reduce cash flow and funds available for future acquisitions
35. 35Adverse economic conditions may negatively affect our returns and profitability
36. 36re-leasing may require concessions or reduced rental rates under the new leases; and
37. 37Increased vacancy rates could have an adverse impact on our ability to make distributions and the value of an investment in our shares
38. 38Global market and economic conditions, including as a result of health crises may materially and adversely affect us and our tenants
39. 39We may be adversely affected by unfavorable economic changes in the specific geographic areas where our investments are concentrated
40. 40We may recognize substantial impairment charges on our properties
41. 41If we suffer losses that are not covered by insurance or that are in excess of insurance coverage, we could lose invested capital and anticipated profits
42. 42Real estate related taxes may increase and if these increases are not passed on to tenants, our income will be reduced
43. 43We could be exposed to environmental liabilities with respect to investments to which we take title
44. 44Properties may contain mold or asbestos or other hazardous conditions
45. 45CC&Rs may restrict our ability to operate a property
46. 46Our operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks
47. 47Competition with third parties in acquiring properties and other investments may reduce our profitability and the return on your investment
48. 48Our properties may face competition that could reduce the amount of rent paid to us, which would reduce the cash available for future distributions and the amount of distributions
49. 49Costs of complying with governmental laws and regulations, including those relating to environmental matters, may adversely affect our income and the cash available for any future distributions
50. 50Inflation and changes in interest rates may materially and adversely affect us and our tenants
51. 51Our costs associated with complying with the Americans with Disabilities Act may affect cash available for future distributions
52. 52We may not be able to re-lease or renew leases at our properties on terms favorable to us or at all
53. 53Lease defaults, terminations or landlord-tenant disputes may adversely reduce our income from our property portfolio
54. 54Net leases may not result in fair market lease rates over time, which could negatively impact our income and reduce the amount of funds available to make future distributions to our stockholders
55. 55Your investment return may be reduced if we are required to register as an investment company under the U.S. Investment Company Act of 1940 (and similar legislation in other jurisdictions)
56. 56compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses
57. 57We have used and may continue to use mortgage and other debt financing to acquire properties or interests in properties and otherwise incur other indebtedness, which increases our expenses and could subject us to the risk of losing properties in foreclosure if our cash flow is insufficient to make loan payments
58. 58As of December 31, 2025, we had total cash (unrestricted and restricted) of $6,198,816, properties with a cost basis of $97,011,131 and outstanding debt of $49,711,594New
59. 59We utilize, and intend to continue to utilize, leverage, which may limit our financial flexibility in the future
60. 60High levels of debt or increases in interest rates could increase the amount of our loan payments, which could reduce the cash available for distribution to stockholders
61. 61High mortgage rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flow from operations and the amount of cash distributions we can make
62. 62Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to you60% rewritten
63. 63Some of our mortgage loans may have “due on sale” provisions, which may impact the manner in which we acquire, sell and/or finance our properties
64. 64Lenders may be able to recover against our other properties under our mortgage loans
65. 65If we are required to make payments under any “bad boy” carve-out guaranties that we may provide in connection with certain mortgages and related loans, our business and financial results could be materially adversely affected
66. 66Interest-only indebtedness may increase our risk of default and ultimately may reduce our funds available for distribution to our stockholders
67. 67We may enter into derivative or hedging contracts that could expose us to contingent liabilities and certain risks and costs in the future
68. 68Complying with REIT requirements may limit our ability to hedge risk effectively
69. 69Interest rates may continue to increase
70. 70We may use floating rate, interest-only or short-term loans to acquire assets
71. 71We may use leverage to make investments
72. 72Leveraging an asset allows a lender to foreclose on that asset
73. 73Availability of financing and market conditions will affect the success of the Company
74. 74We continue to have significant debt obligations and our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern”
75. 75The Company's failure to qualify as a REIT would adversely affect our operations and our ability to make distributions
76. 76We may have difficulty satisfying the requirement that we not be closely held
77. 77Re-characterization of sale-leaseback transactions may cause us to lose our REIT status
78. 78In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to you
79. 79REIT distribution requirements could adversely affect our liquidity
80. 80Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
81. 81We may be unable to generate sufficient revenue from operations, operating cash flow or portfolio income to pay our operating expenses, and our operating expenses could rise, diminishing our ability to pay distributions to our stockholders
82. 82Our tax protection agreements could give rise to material liability
83. 83Because our operations are governed to a significant extent by the federal tax laws, new legislative or regulatory action could adversely affect investors
84. 84Foreign purchasers of our common stock may be subject to FIRPTA tax upon the sale of their shares

Risks Related to our Securities

1. 85The stock price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price at which you purchased your shares
2. 86general market and economic conditions
3. 87We could be delisted from Nasdaq for failure to comply with the Minimum Stockholders' Equity Requirement, the Minimum Bid Requirement or other applicable continued listing requirements and standards of Nasdaq, which would seriously harm the liquidity of our stock and our ability to raise capitalNew
4. 88Minimum Stockholders’ Equity RequirementNew
5. 89Potential Consequences of DelistingNew
6. 90• the incurring of additional costs under state blue sky laws in connection with any sales of our securitiesNew
7. 91Holders of the warrants have no rights as a common stockholder until they acquire our common stock
8. 92The exclusive forum clause set forth in the warrants may have the effect of limiting an investor’s rights to bring legal action against us and could limit the investor’s ability to obtain a favorable judicial forum for disputes with us
9. 93Provisions of our warrants could discourage an acquisition of us by a third party
10. 94If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
11. 95We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors
12. 96The limits on the percentage of shares of our common stock that any person may own may discourage a takeover or business combination that could otherwise benefit our stockholders
13. 97Our charter permits our Board to issue stock with terms that may subordinate the rights of the holders of our common stock or discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders
14. 98Our charter includes a provision that may discourage a stockholder from launching a tender offer for our shares
15. 99Maryland law and our organizational documents limit our rights and the rights of our stockholders to recover claims against our directors and officers, which could reduce your and our recovery against them if they cause us to incur losses
16. 100Certain provisions of Maryland law could inhibit transactions or changes of control under circumstances that could otherwise provide stockholders with the opportunity to realize a premium