What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-10 compared with 2021-05-12 · 219 added, 193 removed, 430 unchanged (49% of the section changed)

22 unchanged sentences

The acquisition of additional farms since our IPO has also allowed us to further diversify our portfolio geographically.

The following table summarizes the different geographic locations (by state) of our farms owned and with leases in place as of and for the three months ended March 31, 2021 and 2020 (dollars in thousands):

As of and For the three months ended March 31, 2021 As of and For the three months ended March 31, 2020

The following table summarizes the different geographic locations (by state) of our farms owned and with leases in place as of and for the six months ended June 30, 2021 and 2020 (dollars in thousands):

As of and For the six months ended June 30, 2021 As of and For the six months ended June 30, 2020

Revenue % of Total

9 unchanged sentences

Oregon 3 418 0.4% 268 0.8% 3 418 0.5% 263 0.9%

Texas 1 3,667 3.6% 112 0.7% 1 3,667 4.2% 112 0.7%

Maryland 6 987 1.0% 108 0.7% — — —% — —%

Michigan 23 1,892 1.8% 262 0.8% 15 962 1.1% 384 1.4%

Maryland 6 987 0.9% 231 0.7% — — —% — —%

Texas 1 3,667 3.5% 225 0.7% 1 3,667 4.1% 225 0.8%

South Carolina 3 597 0.6% 122 0.4% — — —% — —%

1 unchanged sentence

Delaware 1 180 0.2% 41 0.1% — — —% — —%

New Jersey 3 116 0.1% 10 —% — — —% — —%

TOTALS 153 105,282 100.0% $ 32,927 100.0% 115 89,128 100.0% $ 27,918 100.0%

8 unchanged sentences

Agricultural leases are often shorter term in nature (relative to leases of other types of real estate assets), so in any given year, we may have multiple leases up for extension or renewal.

The following table summarizes the lease expirations by year for the farms owned and with leases in place as of March 31, 2021 (dollars in thousands):

The following table summarizes the lease expirations by year for the farms owned and with leases in place as of June 30, 2021 (dollars in thousands):

Year Number of

1 unchanged sentence

Acreage Lease Revenues for the

Three Months Ended

March 31, 2021 % of Total

Six Months Ended

June 30, 2021 % of Total

11,074 10.5% $ 2,409 7.3%

7 unchanged sentences

(1) Certain lease agreements encompass multiple farms.

(2) Includes one lease that was extended subsequent to June 30, 2021 (see “ Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity ” below for a summary of this and other recent leasing activity).

(3) Includes two leases that were extended subsequent to June 30, 2021 (see “ Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity ” below for a summary of this and other recent leasing activity).

(4) Consists of ancillary leases (e.g., oil, gas, and mineral leases, telecommunications leases, etc.) with varying expirations on certain of our farms.

We currently have two agricultural leases scheduled to expire within the next six months (one in California and one in Michigan).

We are currently in negotiations with the existing tenants on each of these farms, as well as other potential tenants, and we anticipate being able to renew each of the leases at their respective current market rental rates without incurring any downtime on any of the farms.

Overall, we currently anticipate the lease renewals on these farms to be at rental rates that are equal to or slightly higher than those of the current leases.

We currently have five agricultural leases scheduled to expire within the next six months (in California, Colorado, and Michigan).

Two of these potential lease expirations are the result of tenant termination options that we currently do not expect the tenants to exercise.

Regarding the remaining three lease expirations, we are currently in negotiations with the existing tenants on each of these farms, as well as other potential tenants, and we anticipate being able to renew each of the leases at their respective current market rental rates without incurring any downtime on any of the farms.

Overall, we currently anticipate the rental rates on these lease renewals to be relatively flat compared to that of the existing leases.

Regarding all upcoming lease expirations, there can be no assurance that we will be able to renew the existing leases or execute new leases at rental rates favorable to us, if at all, or be able to find replacement tenants, if necessary.

2 unchanged sentences

Property Acquisitions

Since January 1, 2021, through the date of this filing, we have acquired four farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Since April 1, 2021, through the date of this filing, we have acquired 13 farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

1 unchanged sentence

Farms Primary

Crop(s) / Use Lease

Crop(s) Lease

Options Total

1 unchanged sentence

Straight-line

Palmer Mill Road Dorchester, MD 3/3/2021 228 2 Sod 10.0 years 2 (5 years) $ 1,600 $ 48 $ 89

Eight Mile Road - Port Facility San Joaquin, CA 3/11/2021 5 1 Cooling Facility & Storage 9.8 years 3 (5 years) 3,977 30 189

South Avenue Corning Tehama, CA 4/5/2021 2,285 1 Olives for Olive Oil 14.7 years 1 (5 years) 37,800 83 2,541

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) 2,150 57 129

Lerdo Highway (3)(4)

Kern, CA 6/4/2021 639 1 Conventional & organic almonds and banked water 10.4 years 3 (10 years) 26,492 104 974

Almena Drive Van Buren

& Eaton, MI 6/9/2021 930 8 Blueberries 14.7 years 2 (5 years) 13,300 49 785

3,970 13 $ 79,742 $ 359 $ 4,443

(1) Includes approximately $27,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred.

(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.

(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.

(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 Note 3, “ Real Estate and Intangible Assets—Investments in Water Assets ,” within the accompanying notes to our condensed consolidated financial statements for additional information on this water.

Existing Properties

Leasing Activity

The following table summarizes certain leasing activity that has occurred on our existing properties since January 1, 2021, through the date of this filing (dollars in thousands, except for footnotes):

The following table summarizes certain leasing activity that has occurred on our existing properties since April 1, 2021, through the date of this filing (dollars in thousands, except for footnotes):

PRIOR LEASES (1)

7 unchanged sentences

/ NN / N) (3)

CA, CO, FL, & MI 5 7,217 $ 2,314 — 3 / 2 / 0 $ 2,259 2.3 — 3 / 2 / 0

(1) Prior Leases includes a lease that was terminated early in April 2021.

No lease revenue was recorded related to this lease during the three months ended March 31, 2021.

In addition, in connection with this early termination, during the three months ended March 31, 2021, we wrote off aggregate deferred rent and rent receivable balances of approximately $65,000 against lease revenue, and approximately $87,000 of unamortized lease intangible assets related to the terminated lease was written off and charged to amortization expense.

Upon termination of this lease, we entered into a new lease with a new tenant effective immediately, which new lease is included in the above table.

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

CA, FL, & MI 5 983 $ 1,845 1 3 / 2 / 0 $ 2,041 4.3 0 3 / 2 / 0

(1) Prior leases includes one lease that was terminated early in July 2021.

We recorded lease revenues of approximately $0 and $6,000 related to this lease during the three and six months ended June 30, 2021, respectively.

In addition, in connection with this early termination, during the three months ended June 30, 2021, we wrote off aggregate deferred rent and rent receivable balances of approximately $43,000 against lease revenue.

Upon termination of this lease, we entered into a new lease with a new tenant, effective immediately, which is included in the above table.

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

(3) “NNN” refers to leases under triple-net lease arrangements, “NN” refers to leases under partial-net lease arrangements, and “N” refers to leases under single-net lease arrangements, in each case, as described above under “ Leases—General .”

1 unchanged sentence

Debt Activity

Since January 1, 2021, through the date of this filing, we have incurred the following new, long-term borrowings (dollars in thousands, except for footnotes;

for further discussion on certain defined terms used below, refer to Note 4, “ Borrowings ,”

within the accompanying notes to our condensed consolidated financial statements):

Lender Date of

Issuance Principal

Amount Maturity

Date Principal

Amortization Stated

Rate Expected

Interest Rate Terms

Farm Credit West, FLCA (2)

1/28/2021 $ 2,073 11/1/2045 24.8 years 3.23% 2.20% Fixed through December 31, 2027 (variable thereafter)

Federal Agricultural Mortgage Corporation (“Farmer Mac”) (3)

2/4/2021 2,460 10/31/2028 25.0 years 3.13% 3.13% Fixed throughout term

Mid Atlantic Farm Credit, ACA 3/3/2021 960 6/1/2045 24.4 years 3.80% 3.31% Fixed through 1/31/2031 (variable thereafter)

Rabo AgriFinance, LLC (4)

3/11/2021 3,780 12/1/2030 25.0 years 3.27% 3.27% Fixed throughout term

Rabo AgriFinance, LLC (4)

3/11/2021 630 12/1/2022 None

(interest only) 2.44% 2.44% Fixed throughout term

Total / Weighted-averages $ 9,903 3.23% 2.96%

(1) On borrowings from the various Farm Credit associations, we receive interest patronage, or refunded interest, which is typically received in the calendar year following the year in which the related interest expense was accrued.

The expected effective interest rates reflected in the table above are the interest rates net of expected interest patronage, which is based on either historical patronage actually received (for pre-existing lenders whom we have received interest patronage from) or indications from the respective lenders of estimated patronage to be paid (for new lenders).

See Note 4, “ Borrowings—Farm Credit Notes Payable—Interest Patronage ,” in the accompanying notes to our consolidated financial statements for additional information on interest patronage.

(2) Loan proceeds used to repay a previously-issued loan with a balance of approximately $1.4 million and a stated interest rate of 4.99%.

(3) Bond issued under our facility with Farmer Mac.

(4) Loans were issued as variable-rate loans but were fixed subsequent to their issuance through our entry into interest rate swap agreements with the lender (as counterparty).

See Note 11, “ Subsequent Events—Financing Activity—Borrowing Activity—Interest Rate Swap Agreements ,” in the accompanying notes to our consolidated financial statements for further discussion on these agreements.

Proceeds from these financings were used to fund new acquisitions, repay existing indebtedness, and for general corporate purposes.

On June 30, 2021, we entered into two loan agreements with Golden State Farm Credit to provide for total future loan proceeds of $22.8 million on a delayed funding basis.

Disbursement of these loans must occur by October 1, 2021, and once disbursed, the loans will bear interest at a fixed rate (before patronage) of 3.75%, which will be fixed for ten years.

Gladstone Securities, an affiliate of ours, earned total financing fees of approximately $35,000 in connection with securing these financings.

Farm Credit Notes Payable—Interest Patronage

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 12 different Farm Credit associations (collectively, “Farm Credit”).

During the three months ended March 31, 2021, we recorded interest patronage of approximately $2.2 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2020.

In addition, during the three months ended September 30, 2020, we recorded approximately $306,000 of 2020 interest patronage, as certain Farm Credit associations prepaid a portion of the 2020 interest patronage (which related to interest accrued during 2020 but is typically received in 2021).

In total, we recorded approximately $2.5 million of 2020 interest patronage related to our Farm Credit Notes Payable, which resulted in a 28.7% reduction (about 135 basis points) to the interest rates on such borrowings.

For further discussion on interest patronage, refer to Note 4, “ Borrowings—Farm Credit Notes Payable—Interest Patronage ,” in the accompanying notes to our consolidated financial statements.

Series D Term Preferred Stock

In January 2021, we completed a public offering of 5.00% Series D Cumulative Term Preferred Stock, par value $0.001 per share (the “Series D Term Preferred Stock”), at a public offering price of $25.00 per share.

As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 2,415,000 shares of the Series D Term Preferred Stock for gross proceeds of approximately $60.4 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $58.3 million.

The Series D Term Preferred Stock is traded under the ticker symbol “LANDM” on Nasdaq.

The shares of the Series D Term Preferred Stock have a mandatory redemption date of January 31, 2026, and are not convertible into our common stock or any other securities.

Generally, we are not permitted to redeem shares of the Series D Term Preferred Stock prior to January 31, 2023, except in limited circumstances to preserve our qualification as a REIT.

On or after January 31, 2023, we may redeem the shares at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends up to, but excluding, the date of redemption.

Redemption of Series A Term Preferred Stock

On February 12, 2021, we redeemed all of our outstanding shares of Series A Term Preferred Stock at a cash redemption price of $25.00 per share plus all accrued and unpaid dividends up to, but excluding, the redemption date.

In total, we paid approximately $28.8 million for the redemption of the Series A Term Preferred Stock using proceeds from the offering of our Series D Term Preferred Stock.

Our Series A Term Preferred Stock was delisted from Nasdaq on the date we redeemed all outstanding shares.

In connection with this early redemption, during the three months ended March 31, 2021, we wrote off approximately $127,000 of unamortized issuance costs related to the issuance of the Series A Term Preferred Stock.

Equity Activity

2 unchanged sentences

Under the Series C Offering, we may sell up to 20,000,000 shares of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share (the “Primary Series C Offering”) and up to 6,000,000 additional shares of our Series C Preferred Stock pursuant to our dividend reinvestment plan (the “DRIP”) to those holders of the Series C Preferred Stock who do not elect to opt-out of such plan.

See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements ,” within the accompanying notes to our condensed consolidated financial statements for more details on the dealer-manager agreement entered into with Gladstone Securities in connection with the Series C Offering.

The following table summarizes the sales of our Series C Preferred Stock that occurred since January 1, 2021, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):

See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreement ,” within the accompanying notes to our condensed consolidated financial statements for more details on the dealer-manager agreement entered into with Gladstone Securities in connection with the Series C Offering.

The following table summarizes the sales of our Series C Preferred Stock that occurred since April 1, 2021, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):

Shares Sold (1)

3 unchanged sentences

(1) Excludes share redemptions and shares issued pursuant to the DRIP.

From January 1, 2021, through the date of this filing, we issued approximately 1,486 shares of the Series C Preferred Stock pursuant to the DRIP.

From April 1, 2021, through the date of this filing, we issued approximately 2,699 shares of the Series C Preferred Stock pursuant to the DRIP.

(2) Net of selling commissions and dealer-manager fees borne by us.

Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $1.5 million (of which approximately $1.4 million was remitted by Gladstone Securities to unrelated third-parties involved in the offering, such as participating broker-dealers and wholesalers).

Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $1.2 million.

The Primary Series C Offering will terminate on the date (the “Series C Termination Date”) that is the earlier of either June 1, 2025 (unless terminated earlier or extended by our Board of Directors), or the date on which all 20,000,000 shares in the Primary Series C Offering are sold.

4 unchanged sentences

(each a “Sales Agent”), under which we may issue and sell, from time to time and through new Sales Agents, shares of our common stock having an aggregate offering price of up to $100.0 million (the “ATM Program”).

The following table summarizes the activity under the ATM Program from January 1, 2021, through the date of this filing (dollars in thousands):

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 summarizes the activity under the ATM Program from April 1, 2021, through the date of this filing (dollars in thousands):

Shares Sold Weighted-average

2 unchanged sentences

(1) Net of underwriter commissions and discounts.

The extent to which the novel coronavirus (“COVID-19”) pandemic may impact our business, financial condition, liquidity, results of operations, funds from operations, or prospects will depend on numerous evolving factors that we are not able to predict at this time, including the duration and long-term scope of the pandemic;

While we have not been materially adversely impacted by the novel coronavirus (“COVID-19”) to date, the extent to which the ongoing COVID-19 pandemic may, in the future, impact our business, financial condition, liquidity, results of operations, funds from operations, or prospects will depend on numerous evolving factors that we are not able to predict at this time, including the duration and long-term scope of the pandemic, the spread and effect of COVID-19 variants;

the adequate production, efficacy, and dissemination of vaccinations;

governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic;

governmental, business, and individuals’ actions that have been and continue to be

taken in response to the pandemic;

the impact on economic activity from the pandemic and actions taken in response;

1 unchanged sentence

the ability of our tenants to make their rental payments;

any closures of our tenants’ operations;

any disruptions of our tenants’ operations;

and our ability to secure debt financing, service future debt obligations, or pay distributions to our stockholders.

Any of these events could materially adversely impact our business, financial condition, liquidity, results of operations, funds from operations, or prospects.

During 2020, we granted short-term rent extensions to two tenants who owed semi-annual rental payments totaling approximately $340,000.

Additional time was granted to these tenants due to delays in payments owed to them from their respective processors, which were primarily caused by the government-mandated lockdowns in the State of Michigan in response to the COVID-19 pandemic.

These rental payments were collected in full during the year ended December 31, 2020, and we have not received any further requests from tenants seeking relief as a result of the COVID-19 pandemic;

however, no assurances can be made that we will not receive additional rent deferral or modification requests in the future.

LIBOR Transition

8 unchanged sentences

We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator (both affiliates of ours), which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly.

The investment advisory agreement with our Adviser that was in effect through March 31, 2017, and the current administration agreement with our Administrator (the “Administration Agreement”) each became effective February 1, 2013.

The advisory agreement with our Adviser was amended and restated on each of July 9, 2019, and January 14, 2020 (as amended, the “Advisory Agreement”).

The Administration Agreement and each of the Advisory Agreements were approved unanimously by our board of directors, including our independent directors.

The investment advisory agreement with our Adviser that was in effect through June 30, 2021 (the “Prior Advisory Agreement”), and the current administration agreement with our Administrator (the “Administration Agreement”) were approved unanimously by our board of directors, including our independent directors.

On July 13, 2021, we amended the Prior Advisory Agreement (as amended, the “Amended Advisory Agreement,” and together with the Prior Advisory Agreement, the “Advisory Agreement”), which was approved unanimously by our board of directors, including, specifically, our independent directors.

The Amended Advisory Agreement revised the calculation of the base management fee beginning with the three months ending September 30, 2021, while all other terms of the Prior Advisory Agreement remained the same.

A summary of certain compensation terms within the Advisory Agreement and a summary of the Administration Agreement is below.

5 unchanged sentences

Base Management Fee

Pursuant to the Advisory Agreement, a base management fee is paid quarterly and is calculated at an annual rate of 0.50% (0.125% per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter.

Pursuant to the Prior Advisory Agreement, through June 30, 2021, a base management fee was paid quarterly and was calculated at an annual rate of 0.50% (0.125% per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter.

Pursuant to the Amended Advisory Agreement, beginning with the three months ending September 30, 2021, a base management fee will be paid quarterly and will be calculated at an annual rate of 0.60% (0.15% per quarter) of the prior calendar quarter’s Gross Tangible Real Estate.

Incentive Fee

1 unchanged sentence

For purposes of this calculation, Pre-Incentive Fee FFO is defined in the Advisory Agreement as FFO (also as defined in the Advisory Agreement) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends declared on preferred stock securities that were not treated as a liability for GAAP purposes.

In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling

common interests in our Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items.

In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling common interests in our Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items.

Our Adviser would receive:

6 unchanged sentences

Smaller Reporting Company Status

As of December 31, 2018, and through March 31, 2021, we qualified as a “smaller reporting company” under Rule 12b-2 of the Exchange Act because we had annual revenues of less than $100 million for the previous year and a public float of less than $700 million.

As of December 31, 2018, and through June 30, 2021, we qualified as a “smaller reporting company” under Rule 12b-2 of the Exchange Act because we had annual revenues of less than $100 million for the previous year and a public float of less than $700 million.

As a smaller reporting company, we have reduced disclosure requirements for our public filings, including the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

4 unchanged sentences

A summary of our significant accounting policies is provided in Note 2 to our consolidated financial statements in our Form 10-K.

There were no material changes to our critical accounting policies during the three months ended March 31, 2021.

There were no material changes to our critical accounting policies during the six months ended June 30, 2021.

RESULTS OF OPERATIONS

For the purposes of the following discussions on certain operating revenues and expenses with regard to the comparison between the three months ended March 31, 2021 versus 2020:

For the purposes of the following discussions on certain operating revenues and expenses:

• With regard to the comparison between the three months ended June 30, 2021 versus 2020:

◦ Same-property basis represents farms owned as of March 31, 2020, and were not vacant at any point during either period presented;

◦ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to March 31, 2020.

From April 1, 2020, through June 30, 2021, we acquired 40 new farms and did not have any farm dispositions.

• With regard to the comparison between the six months ended June 30, 2021 versus 2020:

◦ Same-property basis represents farms owned as of December 31, 2019, and were not vacant at any point during either period presented;

◦ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2019.

From January 1, 2020, through March 31, 2021, we acquired 29 new farms and did not have any farm dispositions.

We did not have any vacant or self-operated farms during either of the three months ended March 31, 2021 or 2020.

A comparison of results of components comprising our operating income for the three months ended March 31, 2021 and 2020 is below (dollars in thousands):

For the Three Months Ended March 31,

From January 1, 2020, through June 30, 2021, we acquired 42 new farms and did not have any farm dispositions.

We did not have any vacant or self-operated farms during either of the three and six months ended June 30, 2021 or 2020.

A comparison of results of components comprising our operating income for the three and six months ended June 30, 2021 and 2020 is below (dollars in thousands):

For the Three Months Ended June 30,

2021 2020 $ Change % Change

4 unchanged sentences

Variable lease payments – tenant reimbursements 38 244 (206) (84.4)%

Total operating revenues 16,893 12,638 4,255 33.7%

Operating expenses:

Depreciation and amortization 6,285 3,843 2,442 63.5%

Property operating expenses 906 717 189 26.4%

Base management and incentive fees 1,376 1,047 329 31.4%

Administration fee 347 357 (10) (2.8)%

General and administrative expenses 581 490 91 18.6%

Total operating expenses 9,495 6,454 3,041 47.1%

Operating income $ 7,398 $ 6,184 $ 1,214 19.6%

For the Six Months Ended June 30,

2021 2020 $ Change % Change

Operating revenues:

Lease revenues:

Fixed lease payments $ 32,816 $ 24,612 $ 8,204 33.3%

Variable lease payments – participation rents 45 74 (29) (39.2)%

Variable lease payments – tenant reimbursements 66 422 (356) (84.4)%

Lease termination income, net — 2,810 (2,810) NM

Total lease revenues 16,034 15,280 754 4.9%

Other operating revenues — — — NM

Total operating revenues 32,927 27,918 5,009 17.9%

5 unchanged sentences

General and administrative expenses 1,119 1,044 75 7.2%

Other operating expenses — — — NM

Total operating expenses 19,402 14,537 4,865 33.5%

3 unchanged sentences

Lease Revenues

The following table provides a summary of our lease revenues during the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

The following table provides a summary of our lease revenues during the three and six months ended June 30, 2021 and 2020 (dollars in thousands):

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

2021 2020 $ Change % Change 2021 2020 $ Change % Change

Same-property basis:

4 unchanged sentences

Properties acquired or disposed of 4,507 87 4,420 5,080.5% 8,407 280 8,127 2,902.5%

Vacant or self-operated properties — — — —% — — — —%

Tenant reimbursements (1)

4 unchanged sentences

Same-property Basis – 2021 compared to 2020

Lease revenues from fixed lease payments remained relatively flat for the three months ended March 31, 2021, as recent lease renewals and amendments executed at higher rental rates and additional rents earned on capital improvements completed on certain of our farms were largely offset by the renewals of certain other leases, in which we decreased the fixed base rent component in exchange for adding in a participation rent component to the lease structure.

Lease revenues from fixed lease payments increased slightly for each of the three and six months ended June 30, 2021, primarily attributable to lease renewals and amendments executed at net higher rental rates and additional rents earned on capital improvements completed on certain of our farms, partially offset by the renewals of certain other leases, in which we decreased the fixed base rent component in exchange for adding in a participation rent component to the lease structure.

Participation rents related to these leases, if any, are expected to be recorded during the second half of the year ending December 31, 2021.

Lease revenues from participation rents remained relatively flat for the three months ended March 31, 2021.

During the three months ended March 31, 2020, we received an early lease termination payment from an outgoing tenant on a property of approximately $3.0 million, which we recognized as additional lease revenue upon receipt, less a net balance of approximately $165,000 of aggregate prepaid rent and deferred rent assets balances that were written off against this amount.

Lease revenues from participation rents decreased for each of the three and six months ended June 30, 2021, primarily due to fewer farms having scheduled participation rent payments due during the first half 2021 versus that of 2020.

During the three months ended March 31, 2020, we received an early lease termination payment of approximately $3.0 million from an outgoing tenant on a property, which we recognized as additional lease revenue upon receipt, less a net balance of approximately $165,000 of aggregate prepaid rent and deferred rent assets balances that were written off against this amount.

Other – 2021 compared to 2020

Lease revenue from properties acquired or disposed of increased for the three months ended March 31, 2021, primarily due to additional revenues earned on new farms acquired subsequent to December 31, 2019.

Tenant reimbursements decreased for the three months ended March 31, 2021, primarily due to additional payments made during the prior-year period by certain tenants on our behalf (pursuant to the lease agreements) to an unconsolidated entity of ours that conveys water to the respective properties.

Lease revenue from properties acquired or disposed of increased for each of the three and six months ended June 30, 2021, primarily due to additional revenues earned on new farms acquired subsequent to December 31, 2019.

Tenant reimbursements decreased for each of the three and six months ended June 30, 2021, primarily due to additional payments made during the prior-year periods by certain tenants on our behalf (pursuant to the lease agreements) to an unconsolidated entity of ours that conveys water to the respective properties.

Operating Expenses

Depreciation and Amortization

The following table provides a summary of the depreciation and amortization expense recorded during the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

The following table provides a summary of the depreciation and amortization expense recorded during the three and six months ended June 30, 2021 and 2020 (dollars in thousands):

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

2021 2020 $ Change % Change 2021 2020 $ Change % Change

Same-property basis $ 3,726 $ 3,840 $ (114) (3.0)% $ 7,577 $ 8,067 $ (490) (6.1)%

1 unchanged sentence

Total depreciation and amortization $ 6,285 $ 3,843 $ 2,442 63.5% $ 12,336 $ 8,100 $ 4,236 52.3%

Depreciation and amortization expense on a same-property basis decreased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to the expiration of certain lease intangible amortization periods subsequent to December 31, 2019.

Depreciation and amortization expense on properties acquired or disposed of increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to the additional depreciation and amortization expense incurred on the new farms acquired subsequent to December 31, 2019.

Depreciation and amortization expense on a same-property basis decreased for each of the three and six months ended June 30, 2021, as compared to the respective prior-year periods, primarily due to the expiration of certain lease intangible amortization periods subsequent to December 31, 2019.

Depreciation and amortization expense on properties acquired or disposed of increased for each of the three and six months ended June 30, 2021, as compared to the same respective prior-year periods, primarily due to the additional depreciation and amortization expense incurred on the new farms acquired subsequent to December 31, 2019.

Property-operating Expenses

Property operating expenses consist primarily of real estate taxes, repair and maintenance expense, insurance premiums, and other miscellaneous operating expenses paid for certain of our properties.

The following table provides a summary of the property-operating expenses recorded during the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

The following table provides a summary of the property-operating expenses recorded during the three and six months ended June 30, 2021 and 2020 (dollars in thousands):

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

2021 2020 $ Change % Change 2021 2020 $ Change % Change

Same-property basis $ 771 $ 459 $ 312 68.0% $ 1,144 $ 796 $ 348 43.7%

6 unchanged sentences

Same-property Basis – 2021 compared to 2020

Property operating expenses increased for the three months ended March 31, 2021, primarily due to an increase in real estate tax obligations on certain properties.

Property-operating expenses increased for each of the three and six months ended June 30, 2021, primarily due to an increase in our obligation to reimburse one of our tenants for water usage over a specific cost threshold in accordance with the lease.

We currently anticipate incurring similar costs for water usage on this particular farm throughout the remainder of 2021 but do not currently expect such elevated costs to continue beyond 2021.

Other – 2021 compared to 2020

Property operating expenses on properties acquired or disposed of increased for the three months ended March 31, 2021, primarily due to additional miscellaneous property-operating expenses incurred on certain of the new farms we acquired subsequent to December 31, 2019.

Tenant reimbursement expense decreased for the three months ended March 31, 2021, primarily due to a decrease in miscellaneous operating costs incurred by us in connection with our ownership interest in an unconsolidated entity.

Property operating expenses on properties acquired or disposed of increased for each of the three and six months ended June 30, 2021, primarily due to additional miscellaneous property-operating expenses incurred on certain of the new farms we acquired subsequent to December 31, 2019.

Tenant reimbursement expense decreased for each of the three and six months ended June 30, 2021, primarily due to a decrease in miscellaneous property-operating costs incurred by us in connection with our ownership interest in an unconsolidated entity.

Our tenants are contractually obligated to reimburse us for these costs under the terms of the respective leases.

Related-Party Fees

The following table provides the calculations of the base management and incentive fees due to our Adviser pursuant to the Advisory Agreement for the three months ended March 31, 2021 and 2020 (dollars in thousands;

for further discussion on

certain defined terms used below, refer to Note 6, “ Related-Party Transactions ,” within the accompanying notes to our condensed consolidated financial statements):

For the Three Months Ended March 31,

Inputs Calculations Inputs Calculations

Calculation of Base Management Fee:

The following tables provide the calculations of the base management and incentive fees due to our Adviser pursuant to the Advisory Agreement for each of the three and six months ended June 30, 2021 and 2020 (dollars in thousands;

for further discussion on certain defined terms used below, refer to Note 6, “ Related-Party Transactions ,” within the accompanying notes to our condensed consolidated financial statements):

Quarters Ended Year to Date

March 31 June 30

FY 2021 Fee Calculations:

Base Management Fee:

Gross Tangible Real Estate (1)(2)

3 unchanged sentences

$ 1,370 $ 1,376 $ 2,746

Calculation of Incentive Fee:

Incentive Fee:

Total Adjusted Common Equity (1)(2)

10 unchanged sentences

$ 1,162 $ — $ 1,162

Total fees due to Adviser $ 2,531 $ 2,368

Total fees due to Adviser, net $ 2,532 $ 1,376 $ 3,908

FY 2020 Fee Calculations:

Base Management Fee:

Gross Tangible Real Estate (1)(2)

$ 827,256 $ 837,603

Quarterly rate 0.125 % 0.125 %

Base management fee (3)

$ 1,034 $ 1,047 $ 2,081

Incentive Fee:

Total Adjusted Common Equity (1)(2)

$ 173,358 $ 176,768

First hurdle quarterly rate 1.750 % 1.750 %

First hurdle threshold $ 3,034 $ 3,093

Second hurdle quarterly rate 2.1875 % 2.1875 %

Second hurdle threshold $ 3,792 $ 3,867

Pre-Incentive Fee FFO (1)

$ 6,670 $ 2,334

100% of Pre-Incentive Fee FFO in excess of first hurdle threshold, up to second hurdle threshold $ 758 $ —

20% of Pre-Incentive Fee FFO in excess of second hurdle threshold 576 —

Total Incentive fee (3)

$ 1,334 $ — $ 1,334

Total fees due to Adviser, net $ 2,368 $ 1,047 $ 3,415

(1) As defined in the Advisory Agreement.

(2) As of the end of the respective prior quarters (as of December 31, 2020, and December 31, 2019, respectively).

(2) As of the end of the respective prior quarters.

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

The base management fee increased during the three months ended March 31, 2021, as compared to the prior-year period, primarily due to additional assets acquired since December 31, 2019.

In addition, our Adviser earned incentive fees during each of the three months ended March 31, 2021 and 2020 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreement) exceeding the required hurdle rate of the applicable equity base.

The administration fee paid to our Administrator decreased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to us using a lower overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.

The base management fee increased during each of the three and six months ended June 30, 2021, as compared to each of the respective prior-year periods, primarily due to additional assets acquired since December 31, 2019.

Our Advisor earned incentive fees during each of the three months ended March 31, 2021 and 2020 due to our Pre-Incentive Fee FFO (as defined in

the Advisory Agreement) exceeding the required hurdle rate of the applicable equity base.

No incentive fees were earned by our Advisor during either of the three months ended June 30, 2021 or 2020.

The administration fee paid to our Administrator decreased for each of the three and six months ended June 30, 2021, as compared to the respective prior-year periods, primarily due to us using a lower overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.

Other Operating Expenses

General and administrative expenses consist primarily of professional fees, director fees, stockholder-related expenses, overhead insurance, acquisition-related costs for investments no longer being pursued, and other miscellaneous expenses.

General and administrative expenses decreased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to lower advertising and marketing costs incurred during the current-year period.

A comparison of results of components comprising other income (expense) for the three months ended March 31, 2021 and 2020 is below (dollars in thousands):

For the Three Months Ended March 31,

General and administrative expenses increased for each of the three and six months ended June 30, 2021, as compared to the respective prior-year periods, primarily due to increased stockholder-related expenses related to the annual stockholders’ meeting and higher professional fees related to additional appraisal costs.

A comparison of results of other components contributing to net loss attributable to common stockholders expense) for the three and six months ended June 30, 2021 and 2020 is below (dollars in thousands):

For the Three Months Ended June 30,

2021 2020 $ Change % Change

5 unchanged sentences

Loss on dispositions of real estate assets, net (1,042) (567) (475) 83.8%

Loss from investments in unconsolidated entities (11) (8) (3) 37.5%

Total other expense, net (7,929) (6,002) (1,927) 32.1%

Net (loss) income (531) 182 (713) (391.8)%

Net income attributable to non-controlling interests 1 2 (1) (50.0)%

Net (loss) income attributable to the Company (530) 184 (714) (388.0)%

Aggregate dividends declared on Series B and Series C Preferred Stock (2,939) (2,262) (677) 29.9%

Net loss attributable to common stockholders $ (3,469) $ (2,078) $ (1,391) 66.9%

For the Six Months Ended June 30,

2021 2020 $ Change % Change

Operating income $ 13,525 $ 13,381 $ 144 1.1%

Other income (expense):

Other income 2,255 1,345 910 67.7%

Interest expense (12,334) (9,953) (2,381) 23.9%

Aggregate dividends declared on Series A and Series D Term Preferred Stock (1,559) (916) (643) 70.2%

Loss on dispositions of real estate assets, net (1,840) (666) (1,174) 176.3%

Property and casualty recovery, net — 66 (66) (100.0)%

5 unchanged sentences

Aggregate dividends declared on Series B and Series C Preferred Stock (5,702) (4,388) (1,314) 29.9%

Net (loss) income attributable to common stockholders $ (2,211) $ 934 $ (3,145) (336.7)%

Net loss attributable to common stockholders $ (5,679) $ (1,144) $ (4,535) 396.4%

NM = Not Meaningful

Other Income (Expense)

Other income, which generally consists of interest patronage received from Farm Credit (as defined in Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements) and interest earned on short-term investments, increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily driven by additional interest patronage received from Farm Credit (partially due to increased borrowings from Farm Credit).

Other income, which generally consists of interest patronage received from Farm Credit (as defined in Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements) and interest earned on short-term investments, remained relatively flat for the three months ended June 30, 2021, as compared to the prior-year period, and increased for the six months ended June 30, 2021, as compared to the prior-year period, primarily driven by additional interest patronage received from Farm Credit (partially due to increased borrowings from Farm Credit).

During the three months ended March 31, 2021, we recorded approximately $2.2 million of interest patronage from Farm Credit related to interest accrued during 2020, compared to approximately $1.3 million of interest patronage recorded during the prior-year period.

Coupled with approximately $306,000 of 2020 interest patronage that was received during the three months ended September 30, 2020, we recorded a total of approximately $2.5 million of 2020 interest patronage from Farm Credit, which resulted in a 28.7% reduction (approximately 135 basis points) to the interest rates on such borrowings.

Interest expense increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to increased overall borrowings.

The weighted-average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock and Series D Term Preferred Stock) outstanding for the three months ended March 31, 2021, was approximately $628.0 million, as compared to approximately $481.3 million for the prior-year period.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the overall effective interest rate charged on our aggregate borrowings was 3.70% and 3.98% for the three months ended March 31, 2021 and 2020, respectively.

During the three months ended March 31, 2021, we paid distributions on our Series A Term Preferred Stock and Series D Term Preferred Stock of approximately $209,000 and $595,000, respectively.

The Series D Term Preferred Stock was issued in January 2021, and the Series A Term Preferred Stock was redeemed in February 2021.

During the three months ended March 31, 2020, we paid approximately $458,000 of distributions on our Series A Term Preferred Stock.

During each of the three months ended March 31, 2021 and 2020, we recorded net losses on dispositions of real estate assets primarily due to the disposal of certain irrigation improvements on certain of our farms, partially offset during the three months ended March 31, 2020, by net gains recognized on the sale of irrigation pivots on two of our farms that were replaced.

The net property and casualty recovery recorded during the three months ended March 31, 2020, related to insurance recoveries received for certain irrigation improvements that were damaged due to natural disasters.

During the three months ended March 31, 2021, we recognized a loss in an unconsolidated entity of approximately $13,000, as compared to income of approximately $34,000 in the prior-year period.

During the three months ended March 31, 2021, the aggregate dividends paid on our Series B Preferred Stock and Series C Preferred Stock increased over that of the prior-year period due to additional shares issued and outstanding during the current-year period.

Interest expense increased for each of the three and six months ended June 30, 2021, as compared to the respective prior-year periods, primarily due to increased overall borrowings.

The weighted-average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock and Series D Term Preferred Stock) outstanding for the three and six months ended June 30, 2021, was approximately $631.5 million and $629.8 million, respectively, as compared to approximately $483.1 million and $482.2 million for the respective prior-year periods.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the overall effective interest rate charged on our aggregate borrowings for the three and six months ended June 30, 2021, was 3.73% and 3.71%, respectively, as compared to 3.98% for each of the respective prior-year periods.

During the three and six months ended June 30, 2021, we paid aggregate distributions on our Series A Term Preferred Stock and Series D Term Preferred Stock of approximately $755,000 and $1.6 million, respectively.

The Series D Term Preferred Stock was issued in January 2021, and the Series A Term Preferred Stock was voluntarily redeemed in full in February 2021.

During the three and six months ended June 30, 2020, we paid distributions on our Series A Term Preferred Stock of approximately $458,000 and $916,000, respectively.

During each of the three and six months ended June 30, 2021 and 2020, we recorded net losses on dispositions of real estate assets primarily due to the disposal of certain irrigation improvements on certain of our farms, partially offset during the six months ended June 30, 2021, by net gains recognized on the sale of irrigation pivots on two of our farms that were replaced.

The net property and casualty recovery recorded during the six months ended June 30, 2020, related to insurance recoveries received for certain irrigation improvements that were damaged due to natural disasters.

During the three and six months ended June 30, 2021, we recognized a loss from investments in an unconsolidated entity of approximately $11,000 and $24,000, respectively, as compared to a (loss) income of approximately $(8,000) and $26,000 for the respective prior-year periods.

During the three and six months ended June 30, 2021, the aggregate dividends paid on our Series B Preferred Stock and Series C Preferred Stock increased over that of the respective prior-year periods due to additional shares issued and outstanding during the current-year periods.

LIQUIDITY AND CAPITAL RESOURCES

Our current short- and long-term sources of funds include cash and cash equivalents, cash flows from operations, borrowings (including the undrawn commitments available under our facility with MetLife), and issuances of additional equity securities.

Our current available liquidity is approximately $102.2 million, consisting of approximately $78.0 million in cash on hand and, based on the current level of collateral pledged, approximately $24.2 million of availability under our facility with MetLife (subject to compliance with covenants).

In addition, we currently have two farms appraised at approximately $39.5 million that are unencumbered and eligible to be pledged as collateral.

Our current available liquidity is approximately $131.3 million, consisting of approximately $84.3 million in cash on hand and, based on the current level of collateral pledged, approximately $47.0 million of availability under our facility with MetLife (subject to compliance with covenants) and other undrawn notes.

In addition, we currently have four properties valued at approximately $43.6 million that are unencumbered and eligible to be pledged as collateral.

Future Capital Needs

Our short- and long-term liquidity requirements consist primarily of making distributions to stockholders (including to non-controlling OP Unitholders) to maintain our qualification as a REIT, funding our general operating costs, making principal and interest payments on outstanding borrowings, making dividend payments on our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock, and, as capital is available, funding new farmland and farm-related acquisitions consistent with our investment strategy.

Notwithstanding the ongoing COVID-19 pandemic, we believe that our current and short-term cash resources will be sufficient to fund our distributions to stockholders (including non-controlling OP Unitholders), service our debt, pay dividends on our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock, and fund our current operating costs in the near term.

Notwithstanding the ongoing COVID-19 pandemic, including the recent surge in certain variants, we believe that our current and short-term cash resources will be sufficient to fund our distributions to stockholders (including non-controlling OP Unitholders), service our debt, pay dividends on our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock, and fund our current operating costs in the near term.

We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances (including, but not limited to, shares of common stock through our ATM Program, OP Units through our Operating Partnership as consideration for future acquisitions, and shares of our Series C Preferred Stock), long-term mortgage indebtedness and bond issuances, and other secured and unsecured borrowings.

3 unchanged sentences

We continue to actively seek and evaluate acquisitions of additional farms and farm-related facilities that satisfy our investment criteria, and despite the ongoing COVID-19 pandemic, our pipeline of potential acquisitions remains healthy.

We have several properties under signed purchase and sale agreements or non-binding letters of intent that we hope to consummate over the next six months.

We have several properties under signed purchase and sale agreements or non-binding letters of intent that we hope to consummate over the next several months.

We also have many other properties that are in various other stages of our due diligence process.

1 unchanged sentence

Cash Flow Resources

The following table summarizes total net cash flows from operating, investing, and financing activities for the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

The following table summarizes total net cash flows from operating, investing, and financing activities for the six months ended June 30, 2021 and 2020 (dollars in thousands):

For the Six Months Ended June 30,

2021 2020 $ Change % Change

5 unchanged sentences

Operating Activities

The majority of cash from operating activities is generated from the rental payments we receive from our tenants, which is first used to fund our property-level operating expenses, with any excess cash being primarily used for principal and interest payments on our borrowings, management fees to our Adviser, administrative fees to our Administrator, and other corporate-level expenses.

Cash provided by operating activities increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to additional rental payments received from recent acquisitions and interest patronage received from Farm Credit, partially offset by increases in the amount of interest payments made.

payments on our borrowings, management fees to our Adviser, administrative fees to our Administrator, and other corporate-level expenses.

Cash provided by operating activities increased for the six months ended June 30, 2021, as compared to the prior-year period, primarily due to additional rental payments received from recent acquisitions and interest patronage received from Farm Credit, partially offset by increases in the amount of interest payments made.

Investing Activities

The decrease in cash used in investing activities during the three months ended March 31, 2021, as compared to the prior-year period, was primarily due to a decrease in aggregate cash paid for acquisitions of new farms and capital improvements on existing farms during the three months ended March 31, 2021, which was approximately $5.5 million less than the prior-year period.

The increase in cash used in investing activities during the six months ended June 30, 2021, as compared to the prior-year period, was primarily due to an increase in cash paid for acquisitions of new farms, partially offset by a decrease in the amount of cash paid for capital improvements on existing farms during the six months ended June 30, 2021.

Financing Activities

The increase in cash provided by financing activities during the three months ended March 31, 2021, as compared to the prior-year period, was primarily due to the issuance of our Series D Term Preferred Stock (which, after redeeming our Series A Term Preferred Stock, resulted in net cash proceeds of approximately $31.6 million) and an increase in net borrowings of approximately $9.3 million.

The increase in cash provided by financing activities during the six months ended June 30, 2021, as compared to the prior-year period, was primarily due to an increase in aggregate net cash proceeds from equity issuances (including our common stock and the Series C Preferred Stock) of approximately $70.2 million and the issuance of our Series D Term Preferred Stock (which after voluntarily redeeming our Series A Term Preferred Stock in full, resulted in net cash proceeds of approximately $31.6 million), partially offset by a decrease in net borrowings and an increase in total distributions.

MetLife Facility

9 unchanged sentences

We also currently have borrowing relationships with several other agricultural lenders and are continuously reaching out to other lenders to establish prospective new relationships.

While we do not have any additional availability under any of these programs based on the properties currently pledged as collateral, we expect to enter into additional borrowing agreements with existing and new lenders in connection with certain potential new acquisitions in the future.

Based on the properties currently pledged as collateral, we currently have $22.8 million of undrawn funds available to us from a Farm Credit association.

In addition, we expect to enter into additional borrowing agreements with existing and new lenders in connection with certain potential new acquisitions in the future.

Equity Capital

6 unchanged sentences

1,108,445 $ 24.84 $ 27,532 $ 25,217

Series D Term Preferred Stock (4)

2,415,000 25.00 60,375 58,488

Common Stock – ATM Program 5,108,330 20.86 106,537 105,472

3,138,384 18.98 59,557 58,961

(1) Net of selling commissions and dealer-manager fees or underwriting discounts and commissions (in each case, as applicable).

1 unchanged sentence

(3) Excludes approximately 3,406 shares issued pursuant to the DRIP.

(4) Includes the underwriters’ exercise of the full over-allotment option in connection with the offering.

(5) We currently have $0 remaining under the ATM Program.

$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.

Our Registration Statement (as defined in Note 8, “ Equity—Registration Statement ,” within the accompanying notes to our condensed consolidated financial statements) 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.

To date, we have issued approximately $54.6 million of Series C Preferred Stock, approximately $60.4 million of Series D Term Preferred Stock, and approximately $174.3 million of common stock (excluding common stock issued to redeem OP Units) under the Registration Statement.

1 unchanged sentence

Off-Balance Sheet Arrangements

As of March 31, 2021, we did not have any material off-balance sheet arrangements.

As of June 30, 2021, we did not have any material off-balance sheet arrangements.

NON-GAAP FINANCIAL INFORMATION

30 unchanged sentences

We believe the foregoing adjustments aid our investors’ understanding of our ongoing operational performance.

Certain information in the table below for the three and six months ended June 30, 2020, has been reclassified to conform to the current period’s presentation.

The reclassifications had no impact on previously-reported Net (loss) income, FFO, or AFFO.

FFO, CFFO and AFFO do not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, CFFO, and AFFO, generally reflects all cash effects of transactions and other events in the determination of net income, and should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions.

4 unchanged sentences

We believe that FFO, CFFO, and AFFO and Diluted FFO, CFFO, and AFFO per share are useful to investors because they provide investors with a further context for evaluating our FFO, CFFO, and AFFO results in the same manner that investors use net income and EPS in evaluating net income.

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three months ended March 31, 2021 and 2020 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-

controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):

For the Three Months Ended March 31,

Net income $ 554 $ 3,101

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three and six months ended June 30, 2021 and 2020 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):

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

2021 2020 2021 2020

Net (loss) income $ (531) $ 182 $ 23 $ 3,283

Aggregate dividends declared on Series B Preferred Stock and Series C Preferred Stock (1)

(2,939) (2,262) (5,702) (4,388)

Net (loss) income available to common stockholders and non-controlling OP Unitholders (2,210) 976

Net loss available to common stockholders and non-controlling OP Unitholders (3,470) (2,080) (5,679) (1,105)

Real estate and intangible depreciation and amortization 6,285 3,843 12,336 8,100

7 unchanged sentences

Amortization of debt issuance costs 252 186 641 365

Other non-cash receipts (4)

Other non-cash charges (receipts) (4)

38 15 63 (19)

AFFO available to common stockholders and non-controlling OP Unitholders 3,726 2,189 8,410 7,632

6 unchanged sentences

(1) Includes (i) cash dividends paid on our Series B Preferred Stock and Series C Preferred Stock and (ii) the value of additional shares of Series C Preferred Stock issued pursuant to the DRIP.

(2) Represents our pro-rata share of depreciation expense recorded in unconsolidated entities during the period.

(2) Represents our pro-rata share of depreciation expense recorded in unconsolidated entities during the respective periods.

(3) Consists primarily of (i) net property and casualty recoveries recorded, net of the cost of related repairs expensed, as a result of the damage caused to certain irrigation improvements by natural disasters on certain of our properties, (ii) one-time listing fees related to our Series D Term Preferred Stock, (iii) the write-off of certain unallocated costs related to a prior universal registration statement, and (iv) certain one-time costs related to the early redemption of our Series A Term Preferred Stock.

12 unchanged sentences

• For properties acquired within 12 months prior to the date of valuation, the purchase price of the property will generally be used as the current fair value unless overriding factors apply.

In situations where OP Units are issued as partial or whole consideration in connection with the acquisition of a property, the fair value of the property will generally be the

In situations where OP Units are issued as partial or

whole consideration in connection with the acquisition of a property, the fair value of the property will generally be the lower of:

(i) the agreed-upon purchase price between the seller and the buyer (as shown in the purchase and sale agreement or contribution agreement and using the agreed-upon pricing of the OP Units, if applicable), or (ii) the value as determined by an independent, third-party appraiser.

8 unchanged sentences

Sources of this data may come from market inputs from recent acquisitions of our own portfolio of real estate, recent appraisals of properties we own that are similar in nature and in the same region (as applicable) as the property being valued, market conditions and trends we observe in our due diligence process, and conversations with appraisers, brokers, and farmers.

A breakdown of the methodologies used to value our properties and the aggregate value as of March 31, 2021, determined by each method is shown in the table below (dollars in thousands, except in footnotes):

A breakdown of the methodologies used to value our properties and the aggregate value as of June 30, 2021, determined by each method is shown in the table below (dollars in thousands, except in footnotes):

Valuation Method Number of

6 unchanged sentences

(1) Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs paid for by us that were associated with the properties, and adjusted for accumulated depreciation and amortization.

(2) Appraisals performed between June 2020 and April 2021.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of March 31, 2021, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

(2) Appraisals performed between September 2020 and June 2021.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of June 30, 2021, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

These assumptions were applied on a farm-by-farm basis and were selected based on several factors, including comparable land sales, surveys of both existing and current market rates, discussions with other brokers and farmers, soil quality, size, location, and other factors deemed appropriate.

5 unchanged sentences

Our Valuation Team reviews the appraisals, including the significant assumptions and inputs used in determining the appraised values, and considers any developments that may have occurred since the time the appraisals were performed.

Developments considered that may have an impact on the fair value of our real estate include, but are not limited to, changes in tenant credit profiles, changes in lease terms (such as expirations and notices of non-renewals or to vacate), and potential asset sales (particularly those at prices different from the appraised values of our properties).

Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of March 31, 2021, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended March 31, 2021, from the prior value basis as of December 31, 2020, is provided in the table below (dollars in thousands):

Total portfolio fair value as of December 31, 2020 $ 1,162,524

Acquisition of three new farms during the three months ended March 31, 2021 5,577

Plus net value appreciation during the three months ended March 31, 2021:

32 farms valued via third-party appraisals $ 2,191

Total net appreciation for the three months ended March 31, 2021 2,191

Developments considered that may have an impact on the fair value of our real estate include, but are not limited to, changes in tenant credit

profiles, changes in lease terms (such as expirations and notices of non-renewals or to vacate), and potential asset sales (particularly those at prices different from the appraised values of our properties).

Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of June 30, 2021, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended June 30, 2021, from the prior value basis as of March 31, 2021, is provided in the table below (dollars in thousands):

Total portfolio fair value as of March 31, 2021 $ 1,170,292

Acquisition of 13 new farms during the three months ended June 30, 2021 79,742 (1)

Plus net value appreciation during the three months ended June 30, 2021:

46 farms valued via third-party appraisals $ 337

Total net appreciation for the three months ended June 30, 2021 337

Total portfolio fair value as of June 30, 2021 $ 1,250,371

(1) Includes approximately $1.2 million paid to exercise a water purchase option that was acquired in connection with one of the farms that was acquired during the three months ended June 30, 2021.

Management also determined fair values of all of its long-term borrowings and preferred stock.

Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of March 31, 2021, was approximately $626.2 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $632.5 million.

The fair values of our Series B Preferred Stock and Series D Term Preferred Stock were determined using the closing stock prices as of March 31, 2021, of $25.56 per share and $25.54 per share, respectively.

Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the assistance of a third-party valuation expert, we determined the estimated value of our Series C Preferred Stock to be $25.00 per share as of March 31, 2021 (see Exhibit 99.1 to this Form 10-Q).

Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of June 30, 2021, was approximately $628.6 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $630.9 million.

The fair values of our Series B Preferred Stock and Series D Term Preferred Stock were determined using the closing stock prices as of June 30, 2021, of $25.98 per share and $26.03 per share, respectively.

Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the assistance of a third-party valuation expert, we determined the estimated value of our Series C Preferred Stock to be $25.00 per share as of June 30, 2021 (see Exhibit 99.1 to this Form 10-Q).

Calculation of Estimated Net Asset Value

4 unchanged sentences

PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

As of March 31, 2021, we estimate the NAV per common share to be $12.69.

As of June 30, 2021, we estimate the NAV per common share to be $13.16.

A reconciliation of NAV to total equity, which we believe is the most directly-comparable GAAP measure, is provided below (dollars in thousands, except per-share data) :

18 unchanged sentences

(4) Long-term notes and bonds payable were valued using a discounted cash flow model.

The Series D Term Preferred Stock was valued based on its closing stock price as of March 31, 2021.

(5) The Series B Preferred Stock was valued based on its closing stock price as of March 31, 2021, while the Series C Preferred Stock was valued at its liquidation value, as discussed above.

The Series D Term Preferred Stock was valued based on its closing stock price as of June 30, 2021.

(5) The Series B Preferred Stock was valued based on its closing stock price as of June 30, 2021, while the Series C Preferred Stock was valued at its liquidation value, as discussed above.

(6) Includes 30,478,064 shares of common stock and 204,778 OP Units held by non-controlling OP Unitholders.

A quarterly roll-forward in the estimated NAV per common share for the three months ended March 31, 2021, is provided below:

Estimated NAV per common share and non-controlling OP Unit as of December 31, 2020 $ 12.23

A quarterly roll-forward in the estimated NAV per common share for the three months ended June 30, 2021, is provided below:

Estimated NAV per common share and non-controlling OP Unit as of March 31, 2021 $ 12.69

Less net loss attributable to common stockholders and non-controlling OP Unitholders (0.12)

5 unchanged sentences

Plus net accretive effect of equity issuances 0.70

Estimated NAV per common share and non-controlling OP Unit as of March 31, 2021 $ 12.69

Estimated NAV per common share and non-controlling OP Unit as of June 30, 2021 $ 13.16

(1) The net change in unrealized fair value of our farmland portfolio consists of three components:

(i) an increase of $0.08 per share due to the net appreciation in value of the farms that were valued during the three months ended March 31, 2021, (ii) an increase of $0.23 per share due to the aggregate depreciation and amortization expense recorded during the three months ended March 31, 2021, and (iii) no change due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

(i) an increase of $0.01 per share due to the net appreciation in value of the farms that were valued during the three months ended June 30, 2021, (ii) an increase of $0.21 per share due to the aggregate depreciation and amortization expense recorded during the three months ended June 30, 2021, and (iii) a decrease of $0.02 per share due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

Comparison of estimated NAV and estimated NAV per common share, using the definitions above, to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the calculation or application of the definition of NAV used by such REITs.

In addition, the trading price of our common shares may differ significantly from our most recent estimated NAV per common share calculation.

For example, while we estimated our NAV per common share to be $12.69 as of March 31, 2021, based on the calculation above, the closing price of our common stock on March 31, 2021, was $18.30 per share.

For example, while we estimated our NAV per common share to be $13.16 as of June 30, 2021, based on the calculation above, the closing price of our common stock on June 30, 2021, was $24.06 per share.

The determination of estimated NAV is subjective and involves a number of assumptions, judgments, and estimates, and minor adjustments to these assumptions, judgments, or estimates may have a material impact on our overall portfolio valuation.

6 unchanged sentences

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 2. Management’s Discussion and Analysis