What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 249 added, 182 removed, 584 unchanged (42% of the section changed)

3 unchanged sentences

(In thousands, except share and per-share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Real estate, at cost $ 1,390,646 $ 1,357,800

9 unchanged sentences

Series D mandatorily-redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference;

3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of March 31, 2022, and December 31, 2021, net

3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of June 30, 2022, and December 31, 2021, net

58,902 58,696

6 unchanged sentences

Series B cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference;

6,456,065 shares authorized, 5,956,065 shares issued and outstanding as of March 31, 2022, and December 31, 2021

6,456,065 shares authorized, 5,956,065 shares issued and outstanding as of June 30, 2022, and December 31, 2021

Series C cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference;

25,987,462 shares authorized, 5,045,023 shares issued and outstanding as of March 31, 2022;

25,985,302 shares authorized, 6,529,895 shares issued and outstanding as of June 30, 2022;

25,989,942 shares authorized, 3,493,333 shares issued and outstanding as of December 31, 2021

Common stock, $ 0.001 par value;

63,956,473 shares authorized, 34,520,068 shares issued and outstanding as of March 31, 2022;

63,958,633 shares authorized, 34,520,068 shares issued and outstanding as of June 30, 2022;

63,953,993 shares authorized, 34,210,013 shares issued and outstanding as of December 31, 2021

10 unchanged sentences

(In thousands, except share and per-share data)

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2022 2021 2022 2021

OPERATING REVENUES:

17 unchanged sentences

Total other expense, net ( 7,520 ) ( 7,929 ) ( 12,911 ) ( 13,502 )

NET INCOME 1,187 554

Net income attributable to non-controlling interests ( 9 ) ( 1 )

NET INCOME ATTRIBUTABLE TO THE COMPANY 1,178 553

NET INCOME (LOSS) 613 ( 531 ) 1,800 23

Net loss (income) attributable to non-controlling interests 3 1 ( 6 ) —

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY 616 ( 530 ) 1,794 23

Dividends declared on Series B and Series C cumulative redeemable preferred stock ( 4,486 ) ( 2,939 ) ( 8,398 ) ( 5,702 )

5 unchanged sentences

Basic and diluted 34,520,068 29,360,515 34,403,184 28,124,440

COMPREHENSIVE INCOME:

Net income attributable to the Company $ 1,178 $ 553

COMPREHENSIVE INCOME (LOSS):

Net income (loss) attributable to the Company $ 616 $ ( 530 ) $ 1,794 $ 23

Change in fair value related to interest rate hedging instruments 2,562 ( 1,211 ) 7,292 156

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $ 5,908 $ 1,920

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ 3,178 $ ( 1,741 ) $ 9,086 $ 179

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands, except share data)

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

8 unchanged sentences

of Shares Par

Balance at March 31, 2022 5,956,065 $ 6 5,045,023 $ 5 34,520,068 $ 35 $ 713,805 $ ( 87,868 ) $ 3,694 $ 629,677 $ 2,248 $ 631,925

Issuance of Series C Preferred Stock, net — — 1,487,032 2 — — 33,739 — — 33,741 — 33,741

Redemptions of Series C Preferred Stock — — ( 2,160 ) — — — ( 49 ) ( 3 ) — ( 52 ) — ( 52 )

Redemptions of OP Units — — — — — — ( 3,700 ) — — ( 3,700 ) ( 3,970 ) ( 7,670 )

Net income — — — — — — — 616 — 616 ( 3 ) 613

Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — ( 4,486 ) — ( 4,486 ) — ( 4,486 )

Distributions—OP Units and common stock — — — — — — — ( 4,701 ) — ( 4,701 ) — ( 4,701 )

Comprehensive income attributable to the Company — — — — — — — — 2,562 2,562 — 2,562

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 1,725 ) — — ( 1,725 ) 1,725 —

Balance at June 30, 2022 5,956,065 $ 6 6,529,895 $ 7 34,520,068 $ 35 $ 742,070 $ ( 96,442 ) $ 6,256 $ 651,932 $ — $ 651,932

Six Months Ended June 30, 2022

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

Capital Distributions

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Interests Total

of Shares Par

Balance at December 31, 2021 5,956,065 $ 6 3,493,333 $ 3 34,210,013 $ 34 $ 668,275 $ ( 80,467 ) $ ( 1,036 ) $ 586,815 $ 2,251 $ 589,066

1 unchanged sentence

Redemptions of Series C Preferred Stock — — ( 4,640 ) — — — ( 105 ) ( 6 ) — ( 111 ) — ( 111 )

Redemptions of OP Units — — — — — — ( 3,700 ) — — ( 3,700 ) ( 3,970 ) ( 7,670 )

Issuance of common stock, net — — — — 310,055 1 10,321 — — 10,322 — 10,322

4 unchanged sentences

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 1,740 ) — — ( 1,740 ) 1,740 —

Balance at June 30, 2022 5,956,065 $ 6 6,529,895 $ 7 34,520,068 $ 35 $ 742,070 $ ( 96,442 ) $ 6,256 $ 651,932 $ — $ 651,932

The accompanying notes are an integral part of these condensed consolidated financial statements.

GLADSTONE LAND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(In thousands, except share data)

Three Months Ended June 30, 2021

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

Capital Distributions

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Interests Total

of Shares Par

Balance at March 31, 2021 5,956,065 $ 6 1,624,113 $ 2 27,531,951 $ 27 $ 476,996 $ ( 61,066 ) $ ( 133 ) $ 415,832 $ 1,835 $ 417,667

Three Months Ended March 31, 2021

Issuance of Series C Preferred Stock, net — — 405,342 — — — 9,194 — — 9,194 — 9,194

Issuance of common stock, net — — — — 2,946,113 3 63,157 — — 63,160 — 63,160

Net loss — — — — — — — ( 530 ) — ( 530 ) ( 1 ) ( 531 )

Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — ( 2,939 ) — ( 2,939 ) — ( 2,939 )

Distributions—OP Units and common stock — — — — — — — ( 3,998 ) — ( 3,998 ) ( 28 ) ( 4,026 )

Comprehensive loss attributable to the Company — — — — — — — — ( 1,211 ) ( 1,211 ) — ( 1,211 )

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 224 ) — — ( 224 ) 224 —

Balance at June 30, 2021 5,956,065 $ 6 2,029,455 $ 2 30,478,064 $ 30 $ 549,123 $ ( 68,533 ) $ ( 1,344 ) $ 479,284 $ 2,030 $ 481,314

Six Months Ended June 30, 2021

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

17 unchanged sentences

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — 1,903 — — 1,903 ( 1,903 ) —

Balance at March 31, 2021 5,956,065 $ 6 1,624,113 $ 2 27,531,951 $ 27 $ 476,996 $ ( 61,066 ) $ ( 133 ) $ 415,832 $ 1,835 $ 417,667

Balance at June 30, 2021 5,956,065 $ 6 2,029,455 $ 2 30,478,064 $ 30 $ 549,123 $ ( 68,533 ) $ ( 1,344 ) $ 479,284 $ 2,030 $ 481,314

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

23 unchanged sentences

Redemptions of cumulative redeemable preferred stock (Series B and Series C) ( 111 ) —

Payments for redemptions of OP Units ( 7,670 ) —

Proceeds from issuance of cumulative term preferred stock — 60,375

14 unchanged sentences

(In thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

NON-CASH INVESTING AND FINANCING INFORMATION:

3 unchanged sentences

Financing fees included in Accounts payable and accrued expenses and Due to related parties, net 13 118

Unrealized gain (loss) related to interest rate hedging instruments ( 3,694 ) ( 133 )

Unrealized gain related to interest rate hedging instruments 6,256 1,344

Dividends paid on Series C Preferred Stock via additional share issuances 170 46

7 unchanged sentences

As we currently control the sole general partner of the Operating Partnership and own, directly or indirectly, a majority of the common units of limited partnership interest in the Operating Partnership (“OP Units”), the financial position and results of operations of the Operating Partnership are consolidated within our financial statements.

As of both March 31, 2022, and December 31, 2021, the Company owned approximately 99.4 % of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units).

As of June 30, 2022, and December 31, 2021, the Company owned 100.0 % and approximately 99.4 %, respectively, of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units).

Gladstone Land Advisers, Inc.

2 unchanged sentences

Since we currently own 100 % of the voting securities of Land Advisers, its financial position and results of operations are consolidated within our financial statements.

For the three months ended March 31, 2022, and for the tax year ended December 31, 2021, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income.

For the six months ended June 30, 2022, and for the tax year ended December 31, 2021, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income.

Subject to certain restrictions and limitations, and pursuant to contractual agreements, our business is managed by Gladstone Management Corporation (the “Adviser”), a Delaware corporation, and administrative services are provided to us by Gladstone Administration, LLC (the “Administrator”), a Delaware limited liability company.

8 unchanged sentences

Securities and Exchange Commission (the “SEC”) on February 22, 2022 (the “Form 10-K”).

The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

The results of operations for the three and six months ended June 30, 2022, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, including the impact of extraordinary events, such as the ongoing coronavirus (“COVID-19”) pandemic, the results of which form the basis for making certain judgments.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making certain judgments.

Actual results may materially differ from these estimates.

Recently-Issued Accounting Pronouncements

As of March 31, 2022, there were no recently-issued accounting pronouncements that had a material impact on our condensed consolidated financial statements.

As of June 30, 2022, there were no recently-issued accounting pronouncements that had a material impact on our condensed consolidated financial statements.

REAL ESTATE AND INTANGIBLE ASSETS

All of our properties are wholly-owned on a fee-simple basis, except where noted.

The following table provides certain summary information about the 164 farms we owned as of March 31, 2022 (dollars in thousands, except for footnotes):

The following table provides certain summary information about the 165 farms we owned as of June 30, 2022 (dollars in thousands, except for footnotes):

of Farms Total

25 unchanged sentences

(3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties.

As of March 31, 2022, this investment had a net carrying value of approximately $ 1.1 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

As of June 30, 2022, this investment had a net carrying value of approximately $ 1.1 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

(4) Includes five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041.

The ground sublease had a net cost basis of approximately $ 753,000 as of March 31, 2022 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets).

The ground sublease had a net cost basis of approximately $ 744,000 as of June 30, 2022 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets).

(5) Includes 45,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California.

1 unchanged sentence

(6) Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2025 and February 2032, respectively.

In total, these two ground leases consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $ 961,000 as of March 31, 2022 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets).

In total, these two ground leases consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $ 877,000 as of June 30, 2022 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets).

(7) Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to one of our farms.

As of March 31, 2022, this investment had a net carrying value of approximately $ 2.0 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

The following table sets forth the components of our investments in tangible real estate assets as of March 31, 2022, and December 31, 2021 (dollars in thousands):

March 31, 2022 December 31, 2021

As of June 30, 2022, this investment had a net carrying value of approximately $ 2.1 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

The following table sets forth the components of our investments in tangible real estate assets as of June 30, 2022, and December 31, 2021 (dollars in thousands):

June 30, 2022 December 31, 2021

Land and land improvements $ 831,103 $ 812,830

6 unchanged sentences

Total real estate, net $ 1,300,940 $ 1,283,798

Real estate depreciation expense on these tangible assets was approximately $ 8.1 million and $ 5.7 million for the three months ended March 31, 2022, and 2021, respectively.

Real estate depreciation expense on these tangible assets was approximately $ 8.1 million and $ 16.2 million for the three and six months ended June 30, 2022, respectively, and approximately $ 6.0 million and $ 11.6 million for the three and six months ended June 30, 2021, respectively.

Included in the figures above are amounts related to improvements made on certain of our properties paid for by our tenants but owned by us, or tenant improvements.

As of March 31, 2022, and December 31, 2021, we recorded tenant improvements, net of accumulated depreciation, of approximately $ 2.4 million and $ 2.5 million, respectively.

We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $ 103,000 and $ 98,000 for the three months ended March 31, 2022 and 2021, respectively.

As of June 30, 2022, and December 31, 2021, we recorded tenant improvements, net of accumulated depreciation, of approximately $ 2.5 million and $ 2.5 million, respectively.

We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $ 103,000 a nd $ 207,000 for the three and six months ended June 30, 2022, respectively, and approximately $ 97,000 and $ 194,000 for the three and six months ended June 30, 2021 respectively.

Intangible Assets and Liabilities

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of March 31, 2022, and December 31, 2021 (dollars in thousands):

March 31, 2022 December 31, 2021

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of June 30, 2022, and December 31, 2021 (dollars in thousands):

June 30, 2022 December 31, 2021

Lease intangibles:

6 unchanged sentences

(1) Other consists primarily of acquisition-related costs allocated to miscellaneous lease intangibles.

Total amortization expense related to these lease intangible assets was approximately $ 266,000 and $ 383,000 for the three months ended March 31, 2022 and 2021, respectively.

The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of March 31, 2022, and December 31, 2021 (dollars in thousands):

March 31, 2022 December 31, 2021

Total amortization expense related to these lease intangible assets was approximately $ 245,000 and $ 511,000 for the three and six months ended June 30, 2022, respectively, and approximately $ 304,000 and $ 687,000 for the three and six months ended June 30, 2021, respectively.

The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of June 30, 2022, and December 31, 2021 (dollars in thousands):

June 30, 2022 December 31, 2021

Intangible Asset or Liability Deferred

11 unchanged sentences

(2) Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Total amortization related to above-market lease values and lease incentives was approximately $ 82,000 and $( 44,000 ) for the three months ended March 31, 2022 and 2021, respectively.

Total accretion related to below-market lease values and other deferred revenue was approximately $ 45,000 and $ 36,000 for the three months ended March 31, 2022 and 2021, respectively.

Total amortization related to above-market lease values and lease incentives was approximately $ 122,000 and $ 203,000 for the three and six months ended June 30, 2022, respectively, and approximately $ 44,000 and $ 0 for the three and six months ended June 30, 2021, respectively.

Total accretion related to below-market lease values and other deferred revenue was approximately $ 44,000 and $ 89,000 for the three and six months ended June 30, 2022, respectively, and approximately $ 63,000 and $ 99,000 for the three and six months ended June 30, 2021, respectively.

2022 Acquisitions

We did not acquire any new farms during the three months ended March 31, 2022.

During the six months ended June 30, 2022, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

Location Acquisition

Farms Primary

Crop(s) / Use Lease

Options Total

Price Acquisition

Costs Annualized

Straight-line

Farm Road (2)

Charlotte, FL 5/20/2022 15 0 Adjacent parcel N/A N/A $ 54 $ 15 $ —

County Road 35 Glenn, CA 6/16/2022 1,374 1 Olives for Olive Oil 14.5 years 1 ( 5 years)

24,500 54 1,714

1,389 1 $ 24,554 $ 69 $ 1,714

(1) Based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

(2) Represents the acquisition of a parcel of land adjacent to an existing farm, providing additional road access to such farm.

No new lease was executed related to this acquisition.

During each of the three and six months ended June 30, 2022, in the aggregate, we recognized operating revenues of approximately $ 71,000 , and net income of approximately $ 38,000 , related to the above acquisitions.

2021 Acquisitions

During the three months ended March 31, 2021, we acquired two new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

During the six months ended June 30, 2021, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

8 unchanged sentences

Eight Mile Road – Port Facility San Joaquin, CA 3/11/2021 5 — Cooling facility and storage 9.8 years 3 ( 5 years)

South Avenue Tehama, CA 4/5/2021 2,285 1 Olives for olive oil 14.7 years 1 ( 5 years)

37,800 149 2,555

Richards Avenue Atlantic, NJ 6/3/2021 116 3 Blueberries 14.9 years 2 ( 5 years)

Lerdo Highway (Phase I) (3)(4)

Kern, CA 6/4/2021 639 1 Conventional & organic almonds and banked water 10.4 years 3 ( 10 years)

26,492 111 974

Almena Drive Van Buren

& Eaton, MI 6/9/2021 930 8 Blueberries 14.7 years 2 ( 5 years)

13,300 51 785

4,203 15 $ 85,319 $ 480 $ 4,721

(1) Includes approximately $ 31,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred.

(2) Based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

During the three months ended March 31, 2021, in the aggregate, we recognized operating revenues of approximately $ 25,000 and a net loss of approximately $ 4,000 related to the above acquisitions.

(3) Lease provides for an annual participation rent component based on the gross crop revenues earned on the farm.

The rent figure above represents only the minimum cash guaranteed under the lease.

(4) As part of the acquisition of this property, we acquired a contract to purchase 20,330 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price.

We executed this contract on June 25, 2021, at an additional cost of approximately $ 1.2 million, which is included in the total purchase price for this property in the table above.

Rent is not currently being earned on the value attributable to the water.

See “ —Investments in Water Assets ” below for additional information on this water.

During the three and six months ended June 30, 2021, in the aggregate, we recognized operating revenues of approximately $ 845,000 and $ 874,000 , respectively, and net income of approximately $ 402,000 and $ 398,000 , respectively, related to the above acquisitions.

Purchase Price Allocations

The allocation of the aggregate purchase price for the farms acquired during the three months ended March 31, 2021, is as follows (dollars in thousands):

Assets (Liabilities) Acquired 2021 Acquisitions

The allocation of the aggregate purchase price for the farms acquired during the six months ended June 30, 2022, and 2021 respectively, is as follows (dollars in thousands):

Assets (Liabilities) Acquired 2022 Acquisitions 2021 Acquisitions

Land and land improvements $ 16,237 $ 39,092

Permanent plantings 5,933 18,075

Irrigation & drainage systems 1,298 3,411

5 unchanged sentences

Below-market lease values (1)

Water purchase contracts (2)(3)

Total Purchase Price $ 24,554 $ 84,073

(1) Included within Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets.

(2) Included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

(3) Represents only the value attributable to the water purchase contract acquired as part of the acquisition of Lerdo Highway and excludes approximately $ 1.2 million paid to execute the contract subsequent to acquisition.

Investments in Unconsolidated Entities

1 unchanged sentence

In addition, in connection with the acquisition of certain farmland located in Umatilla County, Oregon, we also acquired an ownership in a related limited liability company (the “Umatilla LLC”), the sole purpose of which is to own and maintain an irrigation system providing water to our and other neighboring properties.

As of March 31, 2022, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0 % and 9.1 %, respectively.

As of June 30, 2022, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0 % and 9.1 %, respectively.

As our investments in the Fresno LLC and Umatilla LLC are both deemed to constitute “significant influence,” we have accounted for these investments under the equity method.

During the three months ended March 31, 2022 and 2021, we recorded an aggregate loss of approximately $ 29,000 and $ 13,000 , respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC.

Our combined ownership interest in the Fresno LLC and Umatilla LLC, which had an aggregate carrying value of approximately $ 3.1 million as of both March 31, 2022, and December 31, 2021, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

We recorded an aggregate loss of approximately $ 0 and $ 29,000 during the three and six months ended June 30, 2022, respectively, and approximately $ 11,000 and $ 24,000 during the three and six months ended June 30, 2021, respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC.

Our combined ownership interest in the Fresno LLC and Umatilla LLC, which had an aggregate carrying value of approximately $ 3.1 million , as of both June 30, 2022, and December 31, 2021, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Investments in Water Assets

6 unchanged sentences

There is no amount of time by which we must use the water held by SWSD.

As of March 31, 2022, the investment in banked water had a carrying value of approximately $ 34.0 million, which includes the subsequent cost to execute the contracts, and is included within Other assets, net on our Condensed Consolidated Balance Sheets.

As of June 30, 2022, the investment in banked water had a carrying value of approximately $ 34.0 million, which includes the subsequent cost to execute the contracts, and is included within Other assets, net on our Condensed Consolidated Balance Sheets.

Each quarter, we will review the investment in banked water for any indicators of impairment and perform an impairment analysis if there are any such indicators.

As of March 31, 2022, we concluded that there were no such indicators and that the water was not impaired.

As of June 30, 2022, we concluded that there were no such indicators and that the water was not impaired.

Portfolio Concentrations

As of March 31, 2022, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm.

No individual tenant represented greater than 10.0% of the total lease revenue recorded during the three months ended March 31, 2022.

As of June 30, 2022, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm.

No individual tenant represented greater than 10.0% of the total lease revenue recorded during the six months ended June 30, 2022.

Geographic Risk

Farms located in California and Florida accounted for approximately $ 13.2 million ( 66.4 %) and $ 3.6 million ( 18.0 %), respectively, of the total lease revenue recorded during the three months ended March 31, 2022.

Farms located in California and Florida accounted for approximately $ 26.8 million ( 66.5 %) and $ 7.2 million ( 17.9 %), respectively, of the total lease revenue recorded during the six months ended June 30, 2022.

Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster (such as an earthquake, wildfire, or flood) occur or climate change impact the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations.

1 unchanged sentence

In addition, with respect to the ongoing drought taking place in the western U.S., all of our farms in the region have independent (and, in most cases, multiple) sources of water, in addition to rainfall, and have not been materially impacted by the current drought conditions.

No other single state accounted for more than 10.0% of our total lease revenue recorded during the three months ended March 31, 2022.

No other single state accounted for more than 10.0% of our total lease revenue recorded during the six months ended June 30, 2022.

We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment.

As of March 31, 2022, and December 31, 2021, we concluded that no ne of our properties were impaired.

There have been no impairments recognized on our real estate assets since our inception.

Our borrowings as of March 31, 2022, and December 31, 2021, are summarized below (dollars in thousands):

Carrying Value as of As of March 31, 2022

March 31, 2022 December 31, 2021 Stated Interest

As of June 30, 2022, and December 31, 2021, we concluded that no ne of our properties were impaired.

There have been no impairments re

3cognized on our real estate assets since our inception.

Our borrowings as of June 30, 2022, and December 31, 2021, are summarized below (dollars in thousands):

Carrying Value as of As of June 30, 2022

June 30, 2022 December 31, 2021 Stated Interest

Maturity Dates

2 unchanged sentences

7/1/2022–7/1/2051;

November 2032

December 2032

Variable-rate notes payable 1,124 2,856 3.25 % 5/1/2044

7 unchanged sentences

(1) Where applicable, stated interest rates are before interest patronage (as described below).

As of March 31, 2022, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.3 billion.

The weighted-average stated interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 3.72 % and 3.70 % for the three months ended March 31, 2022 and 2021, respectively.

As of June 30, 2022, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.3 billion.

The weighted-average stated interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 3.75 % and 3.73 % for the three and six months ended June 30, 2022, respectively, as compared to 3.73 % and 3.71 % for the three and six months ended June 30, 2021, respectively.

In addition, 2021 interest patronage from our Farm Credit Notes Payable (as defined below) resulted in a 29.9 % reduction (approximately 137 basis points) to the stated interest rates on such borrowings.

See below under “ —Farm Credit Notes Payable—Interest Patronage” for further discussion on interest patronage.

As of March 31, 2022, we were in compliance with all covenants applicable to the above borrowings.

As of June 30, 2022, we were in compliance with all covenants applicable to the above borrowings.

MetLife Facility

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All other material items of the 2020 MetLife Facility remained unchanged.

The following table summarizes the pertinent terms of the 2022 MetLife Facility as of March 31, 2022 (dollars in thousands, except for footnotes):

The following table summarizes the pertinent terms of the 2022 MetLife Facility as of June 30, 2022 (dollars in thousands, except for footnotes):

Issuance Aggregate

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Totals $ 250,000 $ 37,000 $ 213,000

(1) Based on the properties that were pledged as collateral under the 2022 MetLife Facility, as of March 31, 2022, the maximum additional amount we could draw under the facility was approximately $ 110.3 million.

(1) Based on the properties that were pledged as collateral under the 2022 MetLife Facility, as of June 30, 2022, the maximum additional amount we could draw under the facility was approximately $ 110.3 million.

(2) The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50 %, plus an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under each line of credit).

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Pursuant to the Bond Purchase Agreement, we may issue new bonds through May 31, 2023, and the final maturity date for new bonds issued under the Farmer Mac Facility will be December 31, 2030.

During the three months ended March 31, 2022, we issued two new bonds under the Farmer Mac Facility, the pertinent terms of which are summarized in the following table (dollars in thousands):

During the six months ended June 30, 2022, we issued two new bonds under the Farmer Mac Facility, the pertinent terms of which are summarized in the following table (dollars in thousands):

Date of Issuance Amount Maturity Date Principal Amortization Stated

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2/25/2022 1,710 12/30/2030 25.0 years 3.68 % Fixed throughout term

As of March 31, 2022, we had approximately $ 81.4 million of bonds issued and outstanding under the Farmer Mac Facility.

As of June 30, 2022, we had approximately $ 81.3 million of bonds issued and outstanding under the Farmer Mac Facility.

Farm Credit Notes Payable

From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with 13 different Farm Credit associations (collectively, “Farm Credit”).

During the three months ended March 31, 2022, we entered into the following loan agreement with Farm Credit (dollars in thousands):

(collectively, “Farm Credit”).

During the six months ended June 30, 2022, we entered into the following loan agreement with Farm Credit (dollars in thousands):

Issuer Date of

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Northwest Farm Credit Services, FLCA 1/31/2022 $ 1,442 2/1/2032 20.1 years 4.65 % Fixed throughout term

Farm Credit of Central Florida, ACA 4/5/2022 4,800 2/1/2046 23.8 years 4.36 % Fixed through 2/28/2027;

variable thereafter

(1) Stated rate is before interest patronage, as described below.

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Debt Service – Aggregate Maturities

Scheduled principal payments of our aggregate notes and bonds payable as of March 31, 2022, for the succeeding years are as follows (dollars in thousands):

Scheduled principal payments of our aggregate notes and bonds payable as of June 30, 2022, for the succeeding years are as follows (dollars in thousands):

Period Scheduled Principal Payments

For the remaining nine months ending December 31:

For the remaining six months ending December 31:

2022 $ 35,268 (1)

1 unchanged sentence

Thereafter 437,782

(1) Subsequent to June 30, 2022, we repaid approximately $ 16.9 million of expiring loans.

See Note 11, “ Subsequent Events—Financing Activity—Debt Activity ,” for additional information on these repayments.

ASC 820, “Fair Value Measurement (Subtopic 820)” (“ASC 820”), provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous market, and prioritizes the use of market-based inputs to the valuation.

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These unobservable inputs are generally supported by little or no market activity and are based upon management’s estimates of assumptions that market participants would use in pricing the asset or liability.

As of March 31, 2022, the aggregate fair value of our notes and bonds payable was approximately $ 633.6 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 663.8 million.

As of June 30, 2022, the aggregate fair value of our notes and bonds payable was approximately $ 621.9 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 665.6 million.

The fair value of our notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on debt with comparable terms.

Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of March 31, 2022, is deemed to approximate their aggregate carrying value of $ 100,000 .

Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of June 30, 2022, is deemed to approximate their aggregate carrying value of $ 100,000 .

Interest Rate Swap Agreements

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In accordance with the FASB’s fair value measurement guidance, we have made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

As of March 31, 2022, our interest rate swaps were valued using Level 2 inputs.

As of June 30, 2022, our interest rate swaps were valued using Level 2 inputs.

In addition, we have designated our interest rate swaps as cash flow hedges.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is initially recorded in Accumulated other comprehensive income (loss) on the accompanying Condensed Consolidated Balance Sheets and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects.

During the next 12 months, we estimate that an additional $ 204,000 will be reclassified as a reduction to interest expense.

We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of March 31, 2022, and December 31, 2021 (dollars in thousands):

During the next 12 months, we estimate that an additional $ 1.1 million will be reclassified as a reduction to interest expense.

We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of June 30, 2022, and December 31, 2021 (dollars in thousands):

Period Number of Instruments Aggregate Notional Amount

As of March 31, 2022 5 $ 82,760

As of June 30, 2022 5 $ 81,489

As of December 31, 2021 5 82,980

The following table presents the fair value of our interest rate swaps as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2022, and December 31, 2021 (dollars in thousands):

The following table presents the fair value of our interest rate swaps as well as their classification on the Condensed Consolidated Balance Sheets as of June 30, 2022, and December 31, 2021 (dollars in thousands):

Derivative Asset (Liability) Fair Value

Derivative Type Balance Sheet Location March 31, 2022 December 31, 2021

Derivative Type Balance Sheet Location June 30, 2022 December 31, 2021

Derivatives Designated as Hedging Instruments:

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Total $ 6,256 $ ( 1,036 )

The following table presents the amount of income (loss) recognized in comprehensive income within our condensed consolidated financial statements for the three months ended March 31, 2022 and 2021 (dollars in thousands):

For the Three Months Ended March 31,

The following table presents the amount of income (loss) recognized in comprehensive income within our condensed consolidated financial statements for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

2022 2021 2022 2021

Derivative in cash flow hedging relationship:

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We have agreements with each of our derivative counterparties that contain a provision where if we default on any of our indebtedness, then we could also be declared in default on our derivative obligations.

As of March 31, 2022, we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements.

As of June 30, 2022, we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements.

CUMULATIVE TERM PREFERRED STOCK

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In addition, the related dividend payments are treated similarly to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

As of March 31, 2022, the fair value of our Series D Term Preferred Stock was approximately $ 61.6 million, as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 60.4 million.

The fair value of our Series D Term Preferred Stock uses Level 1 inputs under the hierarchy established by ASC 820-10 and is calculated based on the closing per-share price on March 31, 2022, of $ 25.50 .

For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the three months ended March 31, 2022, see Note 8, “ Equity—Distributions .”

As of June 30, 2022, the fair value of our Series D Term Preferred Stock was approximately $ 60.1 million , as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 60.4 million .

The fair value of our Series D Term Preferred Stock uses Level 1 inputs under the hierarchy established by ASC 820-10 and is calculated based on the closing per-share price on June 30, 2022, of $ 24.90 .

For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the three and six months ended June 30, 2022, see Note 8, “ Equity—Distributions .”

RELATED-PARTY TRANSACTIONS

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The amount of the financing fee may be reduced or eliminated as determined by us and Gladstone Securities after taking into consideration various factors, including, but not limited to, the involvement of any unrelated third-party brokers and general market conditions.

We paid total financing fees to Gladstone Securities of approximately $ 94,000 and $ 17,000 during the three months ended March 31, 2022 and 2021, respectively.

Through March 31, 2022, the total amount of financing fees paid to Gladstone Securities represented approximately 0.14 % of the total financings secured since the Financing Arrangement Agreement has been in place.

We paid total financing fees to Gladstone Securities of approximately $ 94,000 during each of the three and six months ended June 30, 2022, and approximately $ 35,000 and $ 52,000 during the three and six months ended June 30, 2021, respectively.

Through June 30, 2022, the total amount of financing fees paid to Gladstone Securities represented approximately 0.14 % of the total financings secured since the Financing Arrangement Agreement has been in place.

Dealer-Manager Agreement

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The terms of the Dealer-Manager Agreement were approved by our board of directors, including its independent directors.

In connection with sales of the Series C Preferred Stock, we paid total Selling Commissions and Dealer-Manager Fees to Gladstone Securities of approximately $ 3.2 million and $ 1.1 million during the three months ended March 31, 2022 and 2021, respectively.

In connection with sales of the Series C Preferred Stock, we paid total Selling Commissions and Dealer-Manager Fees to Gladstone Securities of approximately $ 2.9 million and $ 6.1 million during the three and six months ended June 30, 2022, respectively, and approximately $ 808,000 and $ 2.0 million during the three and six months ended June 30, 2021, respectively.

Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities are netted against the gross proceeds received from sales of the respective securities and are included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets.

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The following table summarizes related-party fees paid or accrued for and reflected in our accompanying condensed consolidated financial statements (dollars in thousands):

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2022 2021 2022 2021

Base management fee (1)(2)

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Incentive fee (1)(2)

— — 1,131 1,162

Total fees to our Adviser, net $ 2,043 $ 1,376 $ 5,210 $ 3,908

Administration fee (1)(2)

$ 463 $ 347 $ 926 $ 703

Selling Commissions and Dealer-Manager Fees (1)(3)

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Related-Party Fees Due

Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of March 31, 2022, and December 31, 2021, were as follows (dollars in thousands):

March 31, 2022 December 31, 2021

Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of June 30, 2022, and December 31, 2021, were as follows (dollars in thousands):

June 30, 2022 December 31, 2021

Base management fee $ 2,043 $ 1,836

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Total due to Administrator 752 500

Due to Gladstone Securities (3)

Total due to related parties (3)

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(2) Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end.

(3) Represents certain costs related to sales of our Series C Preferred Stock paid by Gladstone Securities on our behalf.

(3) Reflected as a line item on our accompanying Condensed Consolidated Balance Sheets.

COMMITMENTS AND CONTINGENCIES

Operating Obligations

In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms, which are summarized in the table below (dollars in thousands):

Location(s) Farm

Acreage Total

Commitment Obligated

Amount Expended

or Accrued as of

March 31, 2022

Lucie, FL 549 $ 230 Q3 2022 $ 148

Hillsborough, FL 55 2,250 (2)

Q4 2022 $ 1,552

Charlotte, FL 975 3,000 (2)

Q4 2022 1,318

Manatee, FL 590 280 Q4 2022 266

Manatee, FL 271 280 Q4 2022 280

Napa, CA 270 1,548 (2)

Q3 2023 1,019

Umatilla, OR 135 2,750 (2)

Columbia, OR 157 1,800 (2)

Q3 2024 1,146

Holt, NE 1,052 180 Q1 2025 —

Collier & Hendry, FL 3,612 2,000 (2)

Wicomico & Caroline, MD, and Sussex, DE 833 115 Q3 2030 49

Madera, CA 212 755 (2)

(1) Our obligation to provide capital to fund these improvements does not extend beyond these respective dates.

(2) Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us.

Ground Lease Obligations

In connection with certain farms acquired through a leasehold interest, we assumed certain ground lease arrangements under which we are the lessee.

Future minimum lease payments due under the remaining non-cancelable terms of these leases as of March 31, 2022, is as follows (dollars in thousands):

Period Future Lease Payments (1)

For the remaining nine months ending December 31:

For the fiscal years ending December 31:

Thereafter 693

Total undiscounted lease payments 1,103

imputed interest ( 479 )

Present value of lease payments $ 624

(1) Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the lessor).

The amounts shown above represent estimated amounts based on the lease rates currently in place.

As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Condensed Consolidated Statement of Operations and Comprehensive Income) of approximately $ 23,000 and $ 14,000 during the three months ended March 31, 2022 and 2021, respectively.

In the ordinary course of business, we may be involved in legal proceedings from time to time.

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The Registration Statement, which was declared effective by the SEC on April 1, 2020, permits us to issue up to an aggregate of $ 1.0 billion in securities (including up to $ 650.0 million reserved for issuance of shares of the Series C Preferred Stock), consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities.

Through March 31, 2022, we have issued a total of 5,057,561 shares of Series C Preferred Stock for gross proceeds of approximately $ 125.4 million, 2,415,000 shares of Series D Term Preferred Stock for gross proceeds of approximately $ 60.4 million, and 13,173,610 shares of common stock (including common stock issued to redeem OP Units) for gross proceeds of approximately $ 256.0 million under the Registration Statement.

Through June 30, 2022, we have issued a total of 6,544,593 shares of Series C Preferred Stock for gross proceeds of approximately $ 162.1 million, 2,415,000 shares of Series D Term Preferred Stock for gross proceeds of approximately $ 60.4 million, and 13,173,610 shares of common stock (including common stock issued to redeem OP Units) for gross proceeds of approximately $ 256.0 million under the Registration Statement.

Equity Issuances

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The Series C Offering permits us to sell up to 20,000,000 shares (the “Primary Series C Offering”) of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $ 25.00 per share and up to 6,000,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $ 22.75 per share.

The following table provides information on sales of our Series C Preferred Stock during the three months ended March 31, 2022 and 2021 (dollars in thousands, except per-share amounts):

Three Months Ended March 31,

The following table provides information on sales of our Series C Preferred Stock during the three and six months ended June 30, 2022 and 2021 (dollars in thousands, except per-share amounts):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Number of shares sold (1)

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(1) Excludes shares issued pursuant to the DRIP.

During the three months ended March 31, 2022 and 2021, we issued approximately 5,239 and 707 shares, respectively, of the Series C Preferred Stock pursuant to the DRIP.

We issued approximately 7,488 and 12,727 shares of the Series C Preferred Stock pursuant to the DRIP during the three and six months ended June 30, 2022, respectively, and approximately 1,293 and 2,001 shares of the Series C Preferred Stock pursuant to the DRIP during the three and six months ended June 30, 2021, respectively.

(2) Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts.

In addition, during the three months ended March 31, 2022, 2,480 shares of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 59,000 .

There were no redemptions during the three months ended March 31, 2021.

As of March 31, 2022, excluding Selling Commissions and Dealer-Manager Fees, we have incurred approximately $ 928,000 of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold.

In addition, during the three and six months ended June 30, 2022, 2,160 and 4,640 shares, respectively, of Series C Preferred Stock, were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 52,000 and $ 111,000 , respectively.

There were no redemptions during the three and six months ended June 30, 2021.

As of June 30, 2022, excluding Selling Commissions and Dealer-Manager Fees, we have incurred approximately $ 1.2 million of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold.

See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreement ,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series C Offering.

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however, we intend to apply to list the Series C Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Series C Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all.

See Note 11, “ Subsequent Events—Equity Activity—Equity Issuances ,” for sales of Series C Preferred Stock completed subsequent to March 31, 2022.

See Note 11, “ Subsequent Events—Equity Activity—Equity Issuances ,” for sales of Series C Preferred Stock completed subsequent to June 30, 2022.

At-the-Market Program

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On May 18, 2021, we entered into separate amendments to the existing equity distribution agreements to allow us to sell up to $ 160.0 million of additional shares of our common stock, expanding the aggregate offering price to up to $ 260.0 million.

The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the three months ended March 31, 2022 and 2021 (dollars in thousands, except per-share amounts):

Three Months Ended March 31,

The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the three and six months ended June 30, 2022 and 2021 (dollars in thousands, except per-share amounts):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Number of shares sold — 2,946,113 310,055 4,259,045

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We consolidate our Operating Partnership, which is a majority-owned partnership.

As of both March 31, 2022, and December 31, 2021, we owned approximately 99.4 %, of the outstanding OP Units.

As of both March 31, 2022, and December 31, 2021, there were 204,778 OP Units held by non-controlling OP Unitholders.

As of June 30, 2022, and December 31, 2021, we owned 100.0 % and approximately 99.4 %, respectively, of the outstanding OP Units.

There were 0 and 204,778 OP Units held by non-controlling OP Unitholders as of June 30, 2022, and December 31, 2021, respectively.

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 cash or, at the Company’s option, shares of our common stock on a one-for-one basis.

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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 its common stock.

controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.

During the three months ended March 31, 2021, we issued 204,778 OP Units to noncontrolling OP Unitholders representing an aggregate value of approximately $ 4.0 million, or $ 19.42 per OP Unit.

Refer to Note 11, “ Subsequent Events , ” for information on redemptions of OP Units subsequent to March 31, 2022.

When a non-controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.

During the six months ended June 30, 2021, we issued 204,778 OP Units to noncontrolling OP Unitholders representing an aggregate value of approximately $ 4.0 million, or $ 19.42 per OP Unit.

During the three and six months ended June 30, 2022, we redeemed those 204,778 OP Units with a cash payment of approximately $ 7.7 million, or $ 37.45 per OP Unit.

The Operating Partnership is required 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.

Distributions

The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three months ended March 31, 2022 and 2021 are reflected in the table below.

Three months ended March 31,

The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three and six months ended June 30, 2022 and 2021 are reflected in the table below.

Three months ended June 30, Six months ended June 30,

Issuance 2022 2021 2022 2021

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LEASE REVENUES

The following table sets forth the components of our lease revenue for the three months ended March 31, 2022 and 2021 (dollars in thousands, except for footnotes):

Three Months Ended March 31,

The following table sets forth the components of our lease revenue for the three and six months ended June 30, 2022 and 2021 (dollars in thousands, except for footnotes):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Fixed lease payments (1)

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Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues.

During the three months ended March 31, 2022 and 2021, we recorded participation rents of approximately $ 0 and $ 26,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 5,000 and $ 29,000 , respectively.

During the three and six months ended June 30, 2022, we recorded participation rents of approximately $ 20,000 during each period and reimbursements of certain property operating expenses by tenants of approximately $ 0 and $ 6,000 , respectively.

During the three and six months ended June 30, 2021, we recorded participation rents of approximately $ 19,000 and $ 45,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 38,000 and $ 66,000 , respectively.

(3) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

EARNINGS PER SHARE OF COMMON STOCK

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2022 and 2021, computed using the weighted average number of shares outstanding during the respective periods.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2022 and 2021, computed using the weighted average number of shares outstanding during the respective periods.

Earnings figures are presented net of non-controlling interests in the earnings per share calculations.

The non-controlling limited partners’ outstanding OP Units (which may be redeemed for shares of common stock) have been excluded from the diluted per-share calculation, as there would be no effect on the amounts since the non-controlling OP Unitholders’ share of earnings would also be added back to net income or loss.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in thousands, except per-share amounts):

2022 2021 2022 2021

Net loss attributable to common stockholders $ ( 3,873 ) $ ( 3,469 ) $ ( 6,610 ) $ ( 5,679 )

1 unchanged sentence

Loss per common share – basic and diluted $ ( 0.11 ) $ ( 0.12 ) $ ( 0.19 ) $ ( 0.20 )

The weighted-average number of OP Units held by non-controlling OP Unitholders was 204,778 and 47,782 for the three months ended March 31, 2022 and 2021, respectively .

The weighted-average number of OP Units held by non-controlling OP Unitholders was 45,006 and 124,451 for the three and six months ended June 30, 2022, respectively , and 204,778 and 126,713 for the three and three and six months ended June 30, 2021, respectively .

SUBSEQUENT EVENTS

Acquisition Activity

Subsequent to June 30, 2022, we acquired four new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

Location Acquisition

Farms Primary

Options Total

Price Acquisition

Straight-line

Reagan Road (3)

Cochise, AZ 7/13/2022 40 0 Corn 12.5 years None $ 120 $ 14 $ 39

North Columbia River Road and Prunedale Road (4)

Franklin & Grant, WA, and Umatilla, OR 7/21/2022 1,317 4 Wine Grapes 8.6 years None 37,250 94 2,569

1,357 4 $ 37,370 $ 108 $ 2,608

(1) Acquisitions will be accounted for as asset acquisitions in accordance with ASC 360.

The figures above represent only costs paid or accrued for as of the date of this filing.

(2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

(3) Represents the acquisition of a parcel of farmable land adjacent to an existing farm.

(4) Upon acquisition, we executed four new leases with the existing tenants on these farms.

The lease terms above represent the weighted-average lease term and aggregate annualized straight-line rent of these four leases.

Financing Activity

Borrowing Activity

Subsequent to March 31, 2022, we secured the following loan proceeds (dollars in thousands):

Issuer Issuance

Date Amount Maturity

Date Principal

Amortization Stated

Interest Rate (1)

Interest Rate Terms

Farm Credit Of Central Florida, ACA 4/5/2022 $ 4,800 2/1/2046 23.8 years 4.36 % Fixed through 2/28/2027;

variable thereafter

(1) Where applicable, stated rate is before interest patronage, as described in Note 4 “ Borrowings—Farm Credit Notes Payable—Interest Patronage .”

In connection with securing the above borrowings, Gladstone Securities, an affiliate of ours, earned total financing fees of approximately $ 7,000 .

Debt Activity

Subsequent to June 30, 2022, we repaid approximately $ 16.9 million of maturing loans.

On a weighted-average basis, these borrowings bore interest at a stated rate of 4.47 % and an effective interest rate (after interest patronage) of 2.89 %.

Equity Activity

The following table provides information on equity sales that have occurred subsequent to March 31, 2022 (dollars in thousands, except per-share amounts):

The following table provides information on equity sales that have occurred subsequent to June 30, 2022 (dollars in thousands, except per-share amounts):

Type of Issuance Number of

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(2) Excludes approximately 6,365 shares issued pursuant to the DRIP.

Subsequent to the March 31, 2022, we paid approximately $ 7.7 million to redeem 204,778 OP Units.

Distributions

On April 12, 2022, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock:

On July 12, 2022, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock:

Issuance Record Date Payment Date Distribution per Share

Series B Preferred Stock:

April 22, 2022 April 29, 2022 $ 0.125

May 20, 2022 May 31, 2022 0.125

June 22, 2022 June 30, 2022 0.125

July 22, 2022 July 29, 2022 $ 0.125

August 23, 2022 August 31, 2022 0.125

September 22, 2022 September 30, 2022 0.125

Total Series B Preferred Stock Distributions:

Series C Preferred Stock:

April 28, 2022 May 6, 2022 $ 0.125

May 27, 2022 June 6, 2022 0.125

June 29, 2022 July 6, 2022 0.125

July 27, 2022 August 5, 2022 $ 0.125

August 25, 2022 September 6, 2022 0.125

September 27, 2022 October 5, 2022 0.125

Total Series C Preferred Stock Distributions:

Series D Term Preferred Stock:

April 22, 2022 April 29, 2022 $ 0.104167

May 20, 2022 May 31, 2022 0.104167

June 22, 2022 June 30, 2022 0.104167

July 22, 2022 July 29, 2022 $ 0.104167

August 23, 2022 August 31, 2022 0.104167

September 22, 2022 September 30, 2022 0.104167

Total Series D Term Preferred Stock Distributions:

Common Stock (1) :

April 22, 2022 April 29, 2022 $ 0.0454

May 20, 2022 May 31, 2022 0.0454

June 22, 2022 June 30, 2022 0.0454

July 22, 2022 July 29, 2022 $ 0.0456

August 23, 2022 August 31, 2022 0.0456

September 22, 2022 September 30, 2022 0.0456

Total Common Stock Distributions:

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements