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Item 1A. Risk Factors

2025-02-19 compared with 2024-02-20 · 94 added, 67 removed, 496 unchanged (25% of the section changed)

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Risks Relating to Our Business and Operations

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Our real estate portfolio is concentrated across a limited number of states, which subjects us to an increased risk of significant loss if adverse weather, economic, or regulatory changes or developments in the markets in which our properties are located occur.

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The geographic concentration of our portfolio could also cause us to be more susceptible to adverse weather, economic or regulatory changes, or developments in the markets in which our properties are located than if we owned a more geographically-diverse portfolio, which could materially and adversely affect the value of our farms and our ability to lease our farms on favorable terms or at all.

We may operate farms on certain of our properties, which will increase our operating costs and expose us to additional farming and related operational risks .

We may, on a temporary basis, operate certain of our farms via a management agreement with a third-party operator.

If we choose to operate any farms we own, we will incur additional costs associated with such farming activities.

In addition, we will be exposed to risks related to farming these properties, including, but not limited to, overall market conditions, natural disasters, adverse weather conditions (including drought), crop-related disease, lower-than-expected harvests, and regulatory restrictions.

These risks may harm our farming operations and have a material adverse effect on our results of operations and cash flow.

We may not be successful in identifying and consummating additional suitable acquisitions that meet our investment criteria, which may impede our growth and negatively affect our results of operations.

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Such investments, and any future investments in property developments, involves risks that are different and, in most cases, greater than the risks associated with our acquisition of fully-developed and commercially-productive farms.

In addition to the risks associated with real estate investments in general, as described elsewhere in this Form 10-K, the risks associated with our development farms include, among other things:

In addition to the risks

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associated with real estate investments in general, as described elsewhere in this Form 10-K, the risks associated with our development farms include, among other things:

• significant time lag between commencement of development and commercial productivity for permanent crop development farms subjects us to greater risks due to fluctuations in the general economy, crop prices, and adverse weather conditions;

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In addition, our target tenants may face intense competition, including competition from companies with greater financial resources, which could lead to price pressure on crops that could lower our tenants’ income.

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Furthermore, the success of a medium-sized business may also depend on the management talents and efforts of one or a small group of persons.

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If we do not have sufficient cash available for distribution generated by our assets to pay the distributions set by our Board of Directors, or if cash available for distribution decreases in future periods, the market price of our common stock could decrease.

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All distributions will be made at the discretion of our Board of Directors and will depend on our earnings, our financial condition, whether we are able to maintain our qualification as a REIT, and other factors as our Board of Directors may deem relevant from time to time.

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Tenants that are subject to significant debt obligations may be unable to make their rent payments if there are adverse changes in their businesses or in general economic conditions.

Tenants that have been impacted adversely by public health emergencies may not be able to make timely rental payments due to labor shortages, supply chain issues, or due to government-mandated lockdowns or other measures taken to address such public health emergencies.

Tenants that have been impacted adversely by public health emergencies may not be able to make timely rental payments due to labor shortages, supply chain issues, or other measures taken to address such public health emergencies.

Tenants that have experienced leveraged restructurings or acquisitions will generally have substantially greater debt and substantially lower net worth than they had prior to the leveraged transaction.

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In addition, these companies’ revenues and expenses may fluctuate according to the growing season, which may impact their ability to make regular lease payments.

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Any lease payment defaults by a tenant could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders.

In the event of a default by a tenant, we may also experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property.

Adverse changes in government policies related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of our properties and our results of operations.

There are a number of government programs that directly or indirectly affect the profitability of farm operators.

These include marketing, export, renewable fuel, and insurance policies and programs.

Significant changes to or the elimination of such programs and policies could adversely affect crop prices and the profitability of farming operations, which could materially and adversely impact the value of our farms and our ability to lease them on favorable terms, or at all, which would have a material adverse effect on our results of operations.

The potential for tariffs or trade disputes between the U.S.

and its primary agricultural trade partners has increased with the change of the Presidential administration.

This impacts the volatility of the market prices of certain crops that our tenants grow on our properties.

Tariffs, trade disputes, and geopolitical conflicts could adversely affect the profitability of our tenants’ farming operations, which could have a material adverse effect on our results of operations, financial condition, ability to make distributions to our stockholders, and the value of our properties.

Some of our tenants could be susceptible to bankruptcy, which would affect our ability to generate rents from them and therefore negatively affect our results of operations.

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If a bankrupt tenant terminates a lease with us, any claim we might have for breach of the lease, excluding a claim against collateral securing the lease, would be treated as a general unsecured claim.

Our claim would likely be capped at the amount the tenant owed us for unpaid rent prior to the bankruptcy unrelated to the termination, plus the greater of one year of lease payments or 15% of the remaining lease payments payable under the lease, but in no case more than three years of lease payments.

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three years of lease payments.

In addition, a bankruptcy court could re-characterize a net lease transaction as a secured lending transaction.

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however, the majority of these leases also include a guarantee of a minimum amount of rental income that generally satisfies our investment return criteria.

While we do not expect participation rents to make up a significant portion of our overall leased portfolio, we intend to enter into additional leases with participation rent components.

We anticipate that the majority of such leases will continue to have a floor that guarantees a minimum amount of rental income that generally satisfies our investment return criteria;

however, such leases will still be impacted by factors related to the success of the farmer-tenant’s harvest, including, but not limited to, declining crop prices and lower-than-average crop production, that may result in us receiving less rent than anticipated or projected when entering into such leases.

While we do not generally intend for participation rents to make up a significant portion of our overall leased portfolio, we anticipate entering into additional leases with participation rent components.

Such leases will still be impacted by factors related to the success of the farmer-tenant’s harvest, including, but not limited to, declining crop prices and lower-than-average crop production, that may result in us receiving less rent than anticipated or projected when entering into such leases.

A reduction in the rent we receive could have a material adverse effect on our cash flow and ability to make distributions to our stockholders.

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Our investments in farmland used for permanent crops have a higher risk profile than farmland used for annual row crops.

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As a result, permanent crops are generally more expensive to replace and more susceptible to disease and poor weather.

If a farmer loses a permanent crop to any natural disaster, such as drought, flooding, fire, or disease, there would generally be significant time and capital needed to return the land to commercial production because a tree, bush, or vine may take years to grow before bearing fruit.

If a farmer loses a permanent crop to any natural disaster, such as drought, hurricane, flooding, fire, or disease, there would generally be significant time and capital needed to return the land to commercial production because a tree, bush, or vine may take years to grow before bearing fruit.

Permanent crop farmland also prevents the farmer from being able to rotate crop types to keep up with changing market conditions or changes in the weather or soil.

If demand for one type of permanent crop decreases, the permanent crop farmer cannot easily convert the farm to another type of crop because permanent crop farmland is dedicated to one crop during the lifespan of the trees, bushes, or vines and therefore cannot easily be rotated to adapt to changing environmental or market conditions.

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In addition, permanent crops, which can generally endure long periods of time from harvest to consumption, allow for global shipment and trade.

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As a result, permanent crop farms typically have a higher risk profile than annual row crop farms.

Market conditions for certain permanent crops may continue at depressed levels for the foreseeable future.

Markets for certain permanent crops, including almonds, pistachios, and wine grapes, continue to operate below peak levels experienced in previous years, and it is currently unknown when, or if, pricing for such crops will return to those previous levels.

As a result, due to the associated operating costs, variability in crop production, and challenging market conditions, our farms producing these crop types have a higher risk than the rest of our farmland portfolio.

If these crop markets do not rebound or we cannot sell the related farmland, these higher-risk farms may have a material adverse effect on our results of operations and cash flow.

Our real estate investments will consist of agricultural properties that may be difficult to sell or re-lease upon tenant defaults or early lease terminations, either of which would adversely affect returns to stockholders.

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These and other limitations may affect our ability to sell or re-lease properties without adversely affecting returns to our stockholders.

Illiquidity of our farmland investments may make it difficult for us to sell properties in response to market conditions and could harm our financial condition and ability to make distributions to our stockholders.

Our farmland investments may be difficult to sell quickly or for a gain.

As a result, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial, and investment conditions may be limited, or we may have to sell properties at a loss.

In addition, we generally seek to opportunistically dispose of properties when we are able to do so at a price we consider attractive and/or recognize a gain on the sale.

If we are required to dispose of assets for liquidity purposes, we may be unable to realize our investment objectives via a sale at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy.

Opportunities to dispose of assets at a gain may not be available to us, which would reduce our cash on hand for distributions to stockholders or for any other purpose.

Weakness in or the lack of an established market for a farm, changes in the financial condition or prospects of prospective purchasers, changes in national or international economic conditions, and changes in laws, regulations, or fiscal policies of jurisdictions in which the farm is located, in each case, may limit our ability to dispose of a farm.

In addition, as a REIT, we may be subject to a 100% tax on net income derived from the sale of property considered to be held primarily for sale to customers in the ordinary course of our business.

We may seek to avoid this tax by complying with certain safe harbor rules that generally limit the number of properties we may sell in a given year, the aggregate expenditures made on such properties prior to their disposition, and how long we retain such properties before disposing of them.

However, we can provide no assurance that we will always be able to comply with these safe harbors.

If compliance is possible, the safe harbor rules may restrict our ability to sell assets in the future and achieve liquidity that may be necessary to fund distributions.

If we sell properties and provide financing to purchasers, defaults by the purchasers would decrease our cash flows and limit our ability to make distributions.

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Although we expect to acquire properties with sufficient water access, should the need arise for additional wells from which to obtain water, we likely would be required to obtain permits prior to drilling such wells.

Permits for drilling water wells are required by state and county regulations, and such permits may be difficult to obtain due to the limited supply of water in areas where we expect to acquire properties, such as the farming regions of California.

Permits for drilling water wells are required by state and county regulations, and such permits may be difficult to obtain due to the limited supply of water

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in areas where we expect to acquire properties, such as the farming regions of California.

Similarly, our properties may be subject to governmental regulations relating to the quality and disposition of rainwater runoff or other water to be used for irrigation.

In such case, we could incur costs necessary to retain this water.

Water politics may adversely shift relative to our business interests or those of our tenants due to a number of external factors, such as the recent wildfires in the Los Angeles and San Diego areas of California and the new Presidential administration’s actions related to farming and water rights, among others.

If we are unable to obtain or maintain sufficient water supply for our properties, our ability to lease them for farming would be seriously impaired, which would have a material adverse impact on the value of our assets and our results of operations.

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Our agricultural properties are subject to adverse weather conditions, seasonal variability, crop disease and other contaminants, which may affect our tenants’ ability to pay rent and thereby have an adverse effect on our results of operations and our ability to make distributions to stockholders.

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Fresh produce, including produce used in canning and other packaged food operations, is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are common but difficult to predict.

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Because we must distribute a substantial portion of our net income to maintain our qualification as a REIT, we will be largely dependent on third-party sources of capital to fund our future capital needs.

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To maintain our qualification as a REIT, we generally must distribute to our stockholders at least 90% of our taxable income each year, excluding net capital gains.

Because of this distribution requirement, it is not likely that we will be able to fund a significant portion of our future capital needs, including property acquisitions, from retained earnings.

Therefore, we may acquire additional capital from the issuance of securities senior to our common shares, including borrowings or other indebtedness, preferred shares (such as our Series B Preferred Stock, Series C Preferred Stock, Series D Term Preferred Stock, or Series E Preferred Stock), or the issuance of other securities.

Therefore, we may acquire additional capital from the issuance of securities senior to our common shares, including borrowings or other indebtedness, preferred shares, or the issuance of other securities.

This capital may not be available on favorable terms or at all.

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If we issue additional preferred securities that rank senior to our common shares in our capital structure, the holders of such preferred securities may have separate voting rights and other rights, preferences, or privileges, economic and otherwise, more favorable than those of our common shares and our currently-designated preferred securities, and the issuance of such preferred securities could have the effect of delaying, deferring, or preventing a transaction or a change of control that might involve a premium price for common stockholders.

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Any inability to access additional financing on terms that are favorable to us may adversely affect our ability to grow and our business generally.

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Under those circumstances, in order to pay our debt obligations, including distribution and dividend payments to stockholders, we might be required to sell properties at a loss or be unable to make distributions or decrease distributions to our stockholders.

A failure to pay amounts due to lenders or redeem shares of our Series D Term Preferred Stock under the mandatory redemption requirement may result in a default on our obligations and result in certain penalties, such as increased interest rates.

A failure to pay amounts due to lenders or redeem shares of our

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Series D Term Preferred Stock under the mandatory redemption requirement may result in a default on our obligations and result in certain penalties, such as increased interest rates.

Additionally, our degree of leverage could adversely affect our ability to obtain additional financing and may have an adverse effect on the public market price of shares of our publicly-traded common stock or currently-designated preferred securities.

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Competition for the acquisition of agricultural real estate may impede our ability to make acquisitions, increase the cost of these acquisitions or decrease or prevent increases in the occupancy and rental rates of our current properties.

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We will compete for the acquisition of properties with many other entities engaged in agricultural and real estate investment activities, including corporate agriculture companies, financial institutions, institutional pension funds, real estate companies, private equity funds and private real estate investors.

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As we expand and diversify our geographic portfolio, we may acquire properties located in new markets, exposing us to risks associated with a lack of market knowledge or understanding of the local market.

This includes the availability and identity of quality tenant farmers, forging new business relationships in the area and unfamiliarity with local government requirements and procedures.

This includes the availability and identity of

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quality tenant farmers, forging new business relationships in the area and unfamiliarity with local government requirements and procedures.

Furthermore, the evaluation and negotiation of a potential expansion into new markets would divert management time and other resources.

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These uncertainties are particularly pronounced in light of the current economic environment, in which the pace of future development is unclear.

Although the current development market contains uncertainties, these uncertainties may be more acute over time, since we do

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not intend to acquire properties that are expected to be converted to urban or suburban uses in the near term.

Although the current development market contains uncertainties, these uncertainties may be more acute over time, since we do not intend to acquire properties that are expected to be converted to urban or suburban uses in the near term.

As a result, there can be no guarantee that increased development will actually occur and that we will be able to sell any of the properties that we own or acquire in the future for such conversion.

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Liability for uninsured or underinsured losses could adversely affect our financial condition.

Losses from disaster-type occurrences, such as wars, earthquakes and weather-related disasters, may be either uninsurable or not insurable on economically viable terms.

Losses from disaster-type occurrences, such as wars, wildfires, earthquakes and weather-related disasters, may be either uninsurable or not insurable on economically viable terms.

Should an uninsured loss occur, we could lose our capital investment or anticipated profits and cash flows from one or more properties.

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If one of our tenants is accused of violating, or found to have violated such regulations, it could have a material adverse effect on the tenant’s operating results, which could adversely affect its ability to make its rental payments to us and, in turn, our ability to make distributions to our stockholders.

Additionally, shifts in federal immigration policy could adversely affect the overall farming labor market, which could result in upward pressure on wages for farm labor and adversely affect our tenants’ profitability and ability to pay rent, which could in turn adversely affect our results of operations.

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The presence of endangered or threatened species on or near our acquired farmland could restrict the activities of our agricultural tenants, which could in turn have a material adverse impact on the value of our assets and our results of operations.

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We will also be required to set aside a reasonable portion of the surface area of our properties to accommodate these oil and gas operations.

The devotion of a portion of our properties to these oil and gas

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operations would reduce the amount of the surface available for farming or farm-related uses, which could adversely impact the rents that we receive from leasing these properties.

The devotion of a portion of our properties to these oil and gas operations would reduce the amount of the surface available for farming or farm-related uses, which could adversely impact the rents that we receive from leasing these properties.

Interest rate fluctuations may adversely affect our results of operations.

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While the U.S.

Federal Reserve increased the federal funds rate 11 times from March 2022 through July 2023, they have held the federal funds rate flat since then.

Federal Reserve increased the federal funds rate 11 times from March 2022 through July 2023, they cut the interest rate for the first time in four years in September 2024 but have held rates flat thus far in 2025.

Future decisions on the federal funds rate will depend on a variety of key economic indicators, including inflation and the unemployment rate, among others.

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Federal Reserve is a major participant in, and its actions significantly impact, the real estate debt markets.

The Federal Reserve has kept the federal funds rate flat since July 2023, and there can be no assurance if or when any reductions will be announced.

Partly due to increases in the federal funds rate prior to July 2023 and the uncertainty over future actions of the Federal Reserve, borrowing costs remain high.

Should the Federal Reserve continue to keep the federal funds rate flat for a prolonged period of time, or should it announce further increases, this may cause interest rates and borrowing costs to remain high or rise even further, which may negatively impact our ability to access the debt markets on favorable terms and the market value of our capital stock.

Partly due to the continued elevated levels of the federal funds rate and the uncertainty over future actions of the Federal Reserve, borrowing costs remain high.

While the Federal Reserve recently cut the interest rate for the first time in four years in September 2024, but have held rates flat thus far in 2025 and may announce further increases in the future, causing interest rates and borrowing costs to remain high or rise even further, which may negatively impact our ability to access the debt markets on favorable terms and the market value of our capital stock.

This may result in future acquisitions by us generating lower overall economic returns and increasing the costs associated with refinancing current debt, which could potentially reduce future cash flow available for distributions.

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Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations or the operations of businesses in which we invest, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business, financial condition, and operating results.

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In the normal course of business, we and our service providers collect and retain certain personal information provided by our tenants, employees of our Administrator and Adviser, and vendors.

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In addition, cybersecurity threats such as those noted above have increased in recent years in part due to increasingly numerous and sophisticated malicious cyber actors.

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do not guarantee that a cyber-incident will not occur, will be timely detected, or that our financial results, operations, or confidential information will not be negatively impacted by such an incident.

We have implemented processes, procedures, and internal controls to help prevent, detect, and mitigate cybersecurity threats and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a threat of a cyber-incident, do not guarantee that a cyber-incident will not occur, will be timely detected, or that our financial results, operations, or confidential information will not be negatively impacted by such an incident.

The development and maintenance of these measures are also costly and require ongoing monitoring, testing, and updating as technologies and processes change and efforts to overcome cybersecurity measures become increasingly sophisticated.

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Further, our operations may be significantly impacted, or even temporarily or permanently halted, as a result of government shelter-in-place measures, vaccine mandates, voluntary and precautionary restrictions on travel or meetings, paused or reversed reopening orders, and other factors related to a public health emergency, including its potential adverse impact on the health of our Adviser’s and Administrator’s personnel.

As a result, there is a risk that this continuing crisis could adversely impact our ability to source, manage, and divest investments and the Company’s ability to achieve its investment objectives, all of which could result in significant losses to us and could impact our ability to make interest and distribution payments to lenders and stockholders, respectively, including their respective amounts.

As a result, there is a risk that any such continuing crisis could adversely impact our ability to source, manage, and divest investments and the Company’s ability to achieve its investment objectives, all of which could result in significant losses to us and could impact our ability to make interest and distribution payments to lenders and stockholders, respectively, including their respective amounts.

Risks Associated with Our Use of an Adviser to Manage Our Business

We are dependent upon our key management personnel for our future success, particularly David Gladstone, Terry Lee Brubaker, Bill Reiman, Lewis Parrish, and Jay Beckhorn.

We are dependent upon our key management personnel for our future success, particularly David Gladstone, Bill Reiman, Lewis Parrish, and Jay Beckhorn.

We have no employees and are therefore dependent on the senior management and other key management members who are employed by our Adviser or Administrator, as applicable, to carry out our business and investment strategies.

Our future success depends to a significant extent on the continued service and coordination of our senior management team, particularly David Gladstone, our chairman, chief executive officer and president;

Terry Lee Brubaker, our chief operating officer;

Bill Reiman, our Executive Vice President;

and Lewis Parrish, our chief financial officer and assistant treasurer.

Gladstone also serves as the chief executive officer of our Adviser and our Administrator, and Mr.

Brubaker is also an executive officer of our Adviser and our Administrator.

The departure of any of our executive officers or key personnel of our Adviser or Administrator, as applicable, could have a material adverse effect on our ability to implement our business strategy and to achieve our investment objectives.

Lewis Parrish, our chief financial officer and assistant treasurer;

and Jay Beckhorn, our treasurer.

Gladstone also serves as the chief executive officer of our Adviser and our Administrator.

Although we engage in customary mitigating activities, the departure of any of our executive officers or key personnel of our Adviser or Administrator, as applicable, could have a material adverse effect on our ability to implement our business strategy and to achieve our investment objectives.

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Our success will continue to depend on the performance of our Adviser and if our Adviser makes inadvisable investment or management decisions, our operations could be materially adversely impacted.

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Our Adviser manages our real estate portfolio and locates, evaluates, recommends and negotiates the acquisition of our real estate investments and mortgage loans.

At the same time, our Advisory Agreement permits our Adviser to conduct other

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commercial activities and to provide management and advisory services to other entities, including, but not limited to, Gladstone Commercial, Gladstone Capital, and Gladstone Investment, each of which is affiliated with us.

At the same time, our Advisory Agreement permits our Adviser to conduct other commercial activities and to provide management and advisory services to other entities, including, but not limited to, Gladstone Commercial, Gladstone Capital, Gladstone Investment, and Gladstone Alternative, each of which is affiliated with us.

Each of our executive officers, other than Mr.

Parrish, is also an executive officer of Gladstone Commercial, which actively makes real estate investments, and Gladstone Capital and Gladstone Investment, which actively make loans to and invest in small- and medium-sized companies.

As a result, we may, from time to time, have conflicts of interest with our Adviser in its management of our business and that of Gladstone Commercial, Gladstone Investment, or Gladstone Capital, which may arise primarily from the involvement of our Adviser, Gladstone Commercial, Gladstone Capital, Gladstone Investment, and their affiliates in other activities that may conflict with our business.

Parrish, is also an executive officer of Gladstone Commercial, which actively makes real estate investments, and Gladstone Capital, Gladstone Investment, and Gladstone Alternative, which actively make loans to and invest in small- and medium-sized companies.

As a result, we may, from time to time, have conflicts of interest with our Adviser in its management of our business and that of Gladstone Commercial, Gladstone Investment, Gladstone Capital, and Gladstone Alternative, which may arise primarily from the involvement of our Adviser, Gladstone Commercial, Gladstone Capital, Gladstone Investment, Gladstone Alternative, and their affiliates in other activities that may conflict with our business.

Examples of these potential conflicts include:

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• we may experience competition with our affiliates for potential financing transactions;

• our Adviser and other affiliates, such as Gladstone Commercial, Gladstone Capital, and Gladstone Investment could compete for the time and services of our officers and directors and reduce the amount of time they are able to devote to management of our business.

• our Adviser and other affiliates, such as Gladstone Commercial, Gladstone Capital, Gladstone Investment, and Gladstone Alternative, could compete for the time and services of our officers and directors and reduce the amount of time they are able to devote to management of our business.

These and other conflicts of interest between us and our Adviser could have a material adverse effect on the operation of our business and the selection or management of our real estate investments.

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The Advisory Agreement entitles our Adviser to incentive compensation based on our FFO, which rewards our Adviser if our quarterly pre-incentive fee FFO exceeds 1.75% (7.0% annualized) of our total adjusted common equity.

Our pre-incentive fee FFO for a particular quarter for incentive compensation purposes excludes the effect of any unrealized gains, losses, or other items during that quarter that do not affect realized net income, even if these adjustments result in a net loss on our statement of operations for that quarter.

Our pre-incentive fee FFO for a particular quarter for incentive compensation purposes excludes the effect of any unrealized gains, losses, or other

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items during that quarter that do not affect realized net income, even if these adjustments result in a net loss on our statement of operations for that quarter.

Thus, we may be required to pay our Adviser incentive compensation for a fiscal quarter even if we incur a net loss for that quarter as determined in accordance with U.S.

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• Our articles of incorporation prohibit ownership of more than 3.3% of the outstanding shares of our capital stock by one person, except for certain qualified institutional investors, which are limited to holding 9.8% of our common stock.

As of December 31, 2023, David Gladstone, our chairman, chief executive officer, and president, and pursuant to an exception approved by our Board of Directors and in compliance with our charter, owned, directly or indirectly,

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including through certain foundations and trusts, approximately 7.0% of our common stock, and the Gladstone Future Trust, for the benefit of Mr.

As of December 31, 2024, David Gladstone, our chairman, chief executive officer, and president, and pursuant to an exception approved by our Board of Directors and in compliance with our charter, owned, directly or indirectly, including through certain foundations and trusts, approximately 7.0% of our common stock, and the Gladstone Future Trust, for the benefit of Mr.

Gladstone’s children, owned approximately 1.9% of our common stock.

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Our rights and the rights of our stockholders to take action against our directors and officers are limited.

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Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be advisable and in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances.

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Our Operating Partnership may enter into tax protection agreements in connection with issuing OP Units to acquire additional properties which could provide that if we dispose of any interest in the protected acquired property prior to a certain time, we will indemnify the other party for its tax liabilities attributable to the built-in gain that exists with respect to such property.

Therefore, although it may be in our stockholders’ best interests that we sell one of these properties, it may be economically

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prohibitive for us to do so if we are a party to such a tax protection agreement.

Therefore, although it may be in our stockholders’ best interests that we sell one of these properties, it may be economically prohibitive for us to do so if we are a party to such a tax protection agreement.

While we do not currently have any of these tax protection agreements in place currently, we may enter into such agreements in the future.

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Holders of our common stock are not entitled to preemptive rights or other protection against dilutions.

As additional acquisition opportunities arise, we may issue additional shares of common stock or preferred stock, or we may issue OP Units, which are redeemable for cash or, at our option, our common stock on a one-to-one basis, to raise the capital necessary to finance these acquisitions, thus potentially further diluting stockholders’ equity.

As additional acquisition opportunities arise, we may issue additional shares of common stock or preferred stock, or we may issue OP Units, which are redeemable for cash or, at our option, our common

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stock on a one-to-one basis, to raise the capital necessary to finance these acquisitions, thus potentially further diluting stockholders’ equity.

As such, our common stockholders bear the risk of our future offerings reducing the per-share trading price of our common stock and diluting their interest in us.

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If that were to occur, it would result in the amount of distributions that exceed our current and accumulated earnings and profits being treated first as a return of capital to the extent of the holder’s adjusted tax basis in the respective security and then, to the extent of any excess over such adjusted tax basis, as capital gain.

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We may not be able to maintain our qualification as a REIT for federal income tax purposes, which would subject us to federal income tax on our taxable income at regular corporate rates, thereby reducing the amount of funds available for paying distributions to stockholders.

Our ability to maintain our qualification as a REIT depends on our ability to satisfy requirements set forth in the Code, concerning, among other things, the ownership of our outstanding common stock, the nature of our assets, the sources of our income and the amount of our distributions to our stockholders.

Our ability to maintain our qualification as a REIT depends on our ability to satisfy requirements set forth in the Internal Revenue Code of 1986, as amended (the “Code”), concerning, among other things, the ownership of our outstanding common stock, the nature of our assets, the sources of our income and the amount of our distributions to our stockholders.

The REIT qualification requirements are extremely complex, and interpretations of the federal income tax laws governing qualification as a REIT are limited.

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In particular, we must ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets.

The remainder of our investment in securities other than government securities, securities of a taxable REIT subsidiary (“TRS”), and qualified real estate assets generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.

The remainder of our investment in securities other than government securities, securities of a TRS, and qualified real estate assets generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.

In addition, in general, no more than 5% of the value of our assets other than government securities, securities of TRSs, and qualified real estate assets can consist of the securities of any one issuer, and no more than 20% (or 25% for taxable years ended on or before December 31, 2017) of the value of our total assets can be represented by securities of one or more TRSs.

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If we fail to comply with these requirements, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.

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• 95% of our capital gain net income for that year;

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• 100% of our undistributed taxable income from prior years.

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Alternatively, the amount of our REIT taxable income could be recalculated, which could cause us to fail the distribution test for REIT qualification.

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Investments in our common stock may not be suitable for pension or profit-sharing trusts, Keogh Plans or individual retirement accounts (“IRAs”).

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However, if our assets were considered to be plan assets, our assets would be subject to ERISA and/or Section 4975 of the Code, and some of the transactions we have entered into with our Adviser and its affiliates could be considered “prohibited transactions” which could cause us, our Adviser and its affiliates to be subject to liabilities and excise taxes.

In addition, our officers and directors, our Adviser and its affiliates could be deemed to be fiduciaries under ERISA and subject to

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other conditions, restrictions and prohibitions under Part 4 of Title I of ERISA.

In addition, our officers and directors, our Adviser and its affiliates could be deemed to be fiduciaries under ERISA and subject to other conditions, restrictions and prohibitions under Part 4 of Title I of ERISA.

Even if our assets are not considered to be plan assets, a prohibited transaction could occur if we or any of our affiliates is a fiduciary within the meaning of ERISA with respect to a purchase by a benefit plan.

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We have elected to treat Gladstone Land Advisers, Inc.

(“Land Advisers”), a wholly-owned subsidiary of our Operating Partnership, as a TRS.

(“Land Advisers”), a wholly-owned subsidiary of ours, as a TRS.

We may also form other TRSs as part of our overall business strategy.

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federal tax laws could adversely affect an investment in our common stock.

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Risks Relating to the Market for our Common Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Term Preferred Stock, and Series E Preferred Stock

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One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution yield, which is our distribution rate as a percentage of our share price, relative to market interest rates.

If market interest rates

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increase, prospective investors may desire a higher distribution yield on our common stock or may seek securities paying higher dividends or interest.

If market interest rates increase, prospective investors may desire a higher distribution yield on our common stock or may seek securities paying higher dividends or interest.

The market price of our common stock likely will be based primarily on the earnings that we derive from rental income with respect to our properties and our related distributions to stockholders, and not from the underlying appraised value of the properties themselves.

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Therefore, in the event of our bankruptcy, liquidation, or reorganization, claims of holders of our currently-designated preferred securities will be satisfied only after all of our and the Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full.

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We intend to apply for quotation on Nasdaq for the Series E Preferred Stock in the future;

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Until shares of the Series E Preferred Stock are listed on Nasdaq or another national securities exchange, if ever, holders of such shares may be unable to sell them at all or, if they are able to, only at substantial discounts from the liquidation preference.

Even if the Series E Preferred Stock is listed on Nasdaq or another national securities exchange within one calendar year of the respective offerings’ termination date, as anticipated, there is a risk that such shares may be thinly traded, and the market for such shares may be relatively illiquid compared to the market for other types of securities, with the spread between the bid and asked prices considerably greater than the spreads of other securities with comparable terms and features.

Even if the Series E Preferred Stock is listed on Nasdaq or another national securities exchange within one calendar year of the respective offerings’ termination date, as anticipated, there is a risk that such shares may be thinly traded, and the market for such shares may be relatively illiquid compared to the market for other types of securities, with the spread between the bid and ask prices considerably greater than the spreads of other securities with comparable terms and features.

Additionally, our charter contains restrictions on the ownership and transfer of our securities, including the Series E Preferred Stock, and these restrictions may inhibit your ability to sell the Series E Preferred Stock promptly, or at all.

Also, since the Series E Preferred Stock has a stated maturity date, holders may be forced to hold the Series E Preferred Stock and receive stated dividends on the shares when, as, and if authorized by our Board of Directors and declared by us with no assurance as to ever receiving the liquidation preference.

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We will be required to terminate the Series E Offering (as defined elsewhere in this Form 10-K) if our common stock and our publicly-traded, currently-designated preferred securities are all no longer listed on Nasdaq or another national securities exchange.

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Our currently-designated preferred securities all bear a risk of redemption by us.

We may voluntarily redeem some or all of the Series B Preferred Stock at any time, and we may voluntarily redeem some or all of the Series C Preferred Stock on or after June 1, 2024.

We may voluntarily redeem some or all of the Series B Preferred Stock or Series C Preferred Stock.

During the year ended December 31, 2024, we voluntarily redeemed 115,176 shares of our Series B Preferred Stock for a total gross cost of approximately $2.4 million and voluntarily redeemed 201,646 shares of our Series C Preferred Stock for a total gross cost of approximately $4.2 million.

In addition, we may voluntarily redeem some or all of the Series E Preferred Stock on or after the first anniversary of the offering’s termination date.

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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-K

Item 1A. Risk Factors