What changed in this filing

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Item 1. Business

2025-02-19 compared with 2024-02-20 · 46 added, 37 removed, 264 unchanged (24% of the section changed)

We are an externally-managed, agricultural REIT that is engaged in the business of owning and leasing farmland.

We are not a grower of crops, nor do we typically farm the properties we own.

We are an externally-managed, agricultural real estate investment trust (“REIT”) that is engaged in the business of owning and leasing farmland.

We are not generally a grower of crops, nor do we typically farm the properties we own, though we may, on a temporary basis, do so in the future on select properties in certain situations.

If we choose to operate any farms we own, we anticipate doing so via a management agreement with a third-party operator and/or through a taxable REIT subsidiary (“TRS”).

We currently own 150 farms comprised of 103,001 acres across 15 states in the U.S.

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Our principal business objective is to maximize stockholder returns through a combination of:

(i) monthly cash distributions to our stockholders, which we hope to sustain and increase through long-term growth in cash flows from increased rents;

(i) monthly cash distributions to our stockholders, which we hope to sustain and increase through long-term growth in cash flows from increased rents (including participation rents);

(ii) appreciation of our land;

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We intend to hold most acquired properties for many years and to generate stable and increasing rental income from leasing these properties.

However, from time to time, we may explore alternative

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options with certain of our farms, including entering into agreements where we finance a portion of the planting, growing, and harvesting costs on certain farms in exchange for receiving a larger share of the resulting crop sales.

• Owning Farms, Farm-Related Real Estate, and Real Estate used by Businesses that Support Farming Communities for Appreciation.

We intend to lease acquired properties over the long term.

However, from time to time, we may sell one or more properties if we believe it to be in the best interests of our stockholders and best to maintain the overall

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value of our portfolio.

However, from time to time, we may sell one or more properties if we believe it to be in the best interests of our stockholders and best to maintain the overall value of our portfolio.

Potential purchasers may include real estate developers desiring to develop the property, financial purchasers seeking to acquire property for investment purposes, or farmers who have operated or seek to operate the land.

Accordingly, we will seek to acquire properties that we believe have potential for long-term appreciation in value.

• Operating Certain Farms under Certain Conditions .

While we do not generally intend to be a grower of crops, we may choose to do so on select properties in certain unique situations if we believe it to be in the best interests of our stockholders and best to maintain the overall value of our portfolio.

If we choose to operate any farms we own, we anticipate doing so via a management agreement with a third-party operator and/or through our TRS.

• Continue Expanding our Operations Geographically.

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Property Acquisitions and Leasing

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We anticipate that many of the farms and farm-related facilities we purchase will be acquired from independent farmers or agricultural companies and that they will simultaneously lease the properties back from us.

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For a discussion of the risks associated with leasing property to leveraged tenants, see Part I, Item 1A,“ Risk Factors—Risks Relating to Our Business and Operations—Some of our tenants may be unable to pay rent, which could adversely affect our cash available to make distributions to our stockholders or otherwise impair the value of your investment .”

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We intend to own and lease primarily single-tenant, agricultural real property, and we may acquire and lease properties used by businesses that support farming communities.

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In these types of agreements, we will generally require the lease to include the guarantee of a minimum amount of rental income that satisfies our investment return criteria.

From time to time, we may also explore alternative leasing options with tenants on certain of our farms, including entering into agreements where we finance a portion of the planting, growing, and harvesting costs on certain farms in exchange for receiving a larger share of the resulting crop sales.

We believe that we can acquire farmland that we will be able to lease at annual rental rates providing net capitalization rates generally ranging from 4% to 7% or more of the properties’ market values.

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As a result, properties that are currently located in close proximity to urban developments are likely to be too expensive to justify farming over an extended period of time, and, therefore, we are unlikely to invest in such properties.

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Our Adviser will perform a due diligence review with respect to each potential property acquisition.

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Despite the conduct of these reviews, there can be no assurance that hazardous substances or waste, as determined under present or future federal or state laws or regulations, will not be discovered on the property after we acquire it.

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Our Adviser will also physically inspect each property and the real estate surrounding it to estimate its value.

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These provisions may include, for example, requiring the tenant to meet operational or financial covenants or to indemnify us against environmental and other contingent liabilities.

We believe that these provisions serve to protect our investments from adverse changes in the operating and financial characteristics of a tenant that may impact its ability to satisfy its obligations to us or that could reduce the value of our properties.

We believe that these provisions serve to protect our investments from adverse changes in the operating and financial characteristics of a tenant that may impact its ability

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to satisfy its obligations to us or that could reduce the value of our properties.

Our Adviser generally also seeks covenants requiring tenants to receive our consent prior to any change in control of the tenant.

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By diversifying our portfolio, our Adviser intends to reduce the adverse effect on our portfolio of a single underperforming investment or a downturn in any particular geographic region.

Many of the areas in which we purchase or finance properties are likely to have their own microclimates and, although they appear to be in close proximity to one another, generally will not be similarly affected by weather or

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other natural occurrences at the same time.

We currently own properties in 15 different states across the U.S., and over time, we expect to expand our geographic focus to other areas in the U.S., including the Pacific Northwest, Midwest, and Mid-Atlantic.

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• invest in commodities or commodity futures contracts, with this limitation not being applicable to futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in properties and making mortgage loans;

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• invest in contracts for the sale of real estate unless the contract is in recordable form and is appropriately recorded in the chain of title;

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• invest in securities representing more than 10% of the outstanding securities (by vote or value) of any one issuer if the investment would cause us to fail to maintain our qualification as a REIT;

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• acquire securities in any company holding investments or engaging in activities prohibited in the foregoing clauses.

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Code of Ethics

We have adopted a code of ethics and business conduct applicable to all personnel of our Adviser and Administrator that complies with the guidelines set forth in Item 406 of Regulation S-K of the Securities Act of 1933, as amended.

This code establishes procedures for personal investments, restricts certain transactions by such personnel, and requires the reporting of certain transactions and holdings by such personnel.

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We intend to provide any required disclosure of any amendments to or waivers of this code of ethics by posting information regarding any such amendment or waiver to our website.

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Insider Trading Policy

In addition, the code of ethics and business conduct, among other things, prohibits directors, officers and other employees of the Company, Gladstone Capital Corporation (“Gladstone Capital”), Gladstone Commercial Corporation (“Gladstone Commercial”), Gladstone Investment Corporation (“Gladstone Investment”), Gladstone Alternative Income Fund (“Gladstone Alternative,” and collectively, with the Company, the “Funds”), the Administrator, or the Adviser, including such persons’ spouse, minor children, family members living within the same household, and any other affiliates or affiliated entities, from trading in the Funds’ securities while in possession of material non-public information and entering into a short sale transaction or trading in options (including puts and calls), warrants, convertible securities, appreciation rights, or other derivative securities, with respect to the Company’s securities (or securities of the Funds) granted as compensation or held directly or indirectly by the individuals covered under the policy, or use any other derivative transaction or instrument to take a short position in respect of such Fund’s securities.

The code also requires the pre-clearance of transactions in Fund securities.

Our Adviser and Administrator

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The officers, directors, and employees of our Adviser have significant experience in making investments in and lending to businesses of all sizes, including investing in real estate and making mortgage loans.

We have entered into an investment advisory agreement with our Adviser, which was most recently amended and restated effective July 1, 2021 (the “Current Advisory Agreement”), under which our Adviser is responsible for managing our assets and liabilities, for operating our business on a day-to-day basis, and for identifying, evaluating, negotiating, and consummating investment transactions consistent with our investment policies as determined by our Board of Directors from time to time.

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administrative services to us under the amended and restated Administration Agreement entered into on February 1, 2013 (the “Administration Agreement”).

We have entered into an investment advisory agreement with our Adviser, which was most recently amended and restated effective July 1, 2021 (the “Advisory Agreement”), under which our Adviser is responsible for managing our assets and liabilities, for operating our business on a day-to-day basis, and for identifying, evaluating, negotiating, and consummating investment transactions consistent with our investment policies as determined by our Board of Directors from time to time.

Our Administrator employs our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs and provides administrative services to us under the amended and restated Administration Agreement entered into on February 1, 2013 (the “Administration Agreement”).

David Gladstone, our chairman, chief executive officer, president, and largest stockholder, is also the chairman, chief executive officer, and the controlling stockholder of our Adviser and our Administrator.

Terry Lee Brubaker, our chief operating officer, also serves as vice chairman, chief operating officer, and a member of the Board of Directors for our Adviser and Administrator.

Our Adviser has an investment committee that evaluates and approves each of our investments.

This investment committee is currently comprised of Messrs.

Gladstone, Brubaker, and Reiman;

John Sateri, who is a managing director of our Adviser;

Gladstone and Reiman;

John Sateri, who is a managing director of our Adviser and President of Gladstone Alternative;

Laura Gladstone, who is a managing director of our Adviser.

We believe that the review process of our Adviser’s investment committee gives us a competitive advantage over other agricultural real estate companies because of the substantial experience that the members possess and their unique perspective in evaluating the blend of corporate credit, real estate, and lease terms that collectively combine to provide an acceptable risk for our investments.

Our Adviser’s board of directors has empowered the investment committee to authorize and approve our investments, subject to the terms of the Current Advisory Agreement.

Our Adviser’s board of directors has empowered the investment committee to authorize and approve our investments, subject to the terms of the Advisory Agreement.

Before we acquire any property, the proposed transaction is be reviewed by the investment committee to ensure that, in its view, the transaction satisfies our investment criteria and is within our investment policies.

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Refer to Part II, Item 7, “ Management Discussion and Analysis of Financial Condition and Results of Operations—Overview—Our Adviser and Administrator ” of this Form 10-K for a detailed discussion on the fee structure of each of the Adviser and Administrator.

Adviser Duties and Authority under the Current Advisory Agreement

Under the terms of the Current Advisory Agreement, our Adviser is required to present to us investment opportunities consistent with our investment policies and objectives as adopted by our Board of Directors.

Adviser Duties and Authority under the Advisory Agreement

Under the terms of the Advisory Agreement, our Adviser is required to present to us investment opportunities consistent with our investment policies and objectives as adopted by our Board of Directors.

In performing its duties, our Adviser, either directly or indirectly by engaging an affiliate:

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• enters into contracts to purchase real estate on our behalf in compliance with our investment procedures, objectives, and policies, subject to approval of our Board of Directors, where required;

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• takes the actions and obtains the services necessary to effect the negotiation, acquisition, financing, refinancing holding, leasing, and disposition of real estate investments;

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• any acquisition which at the time of investment would have a cost exceeding 50% of our total assets;

• transactions that involve conflicts of interest with our Adviser (other than reimbursement of expenses in accordance with the Current Advisory Agreement).

• transactions that involve conflicts of interest with our Adviser (other than reimbursement of expenses in accordance with the Advisory Agreement).

Our Adviser and Administrator also engage in other business ventures and, as a result, certain (but not all) of their resources are not dedicated exclusively to our business.

For example, our Adviser and Administrator also serve as the external adviser and administrator, respectively, to Gladstone Capital Corporation (“Gladstone Capital”) and Gladstone Investment Corporation (“Gladstone Investment”), both publicly-traded business development companies affiliated with us, and Gladstone Commercial Corporation (“Gladstone Commercial”), a publicly-traded REIT affiliated with us.

However, under the Current Advisory

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Agreement, our Adviser is required to devote sufficient resources to the administration of our affairs to discharge its obligations under the agreement.

The Current Advisory Agreement is not assignable or transferable by either us or our Adviser without the consent of the other party, except that our Adviser may assign the Current Advisory Agreement to an affiliate for whom our Adviser agrees to guarantee its obligations to us.

For example, our Adviser and Administrator also serve as the external adviser and administrator, respectively, to Gladstone Capital and Gladstone Investment, both publicly-traded business development companies affiliated with us;

Gladstone Commercial, a publicly-traded REIT affiliated with us;

and Gladstone Alternative, a non-diversified, closed-end management investment company that operates as an “interval fund” that is also our affiliate.

However, under the Advisory Agreement, our Adviser is required to devote sufficient resources to the administration of our affairs to discharge its obligations under the agreement.

The Advisory Agreement is not assignable or transferable by either us or our Adviser without the consent of the other party, except that our Adviser may assign the Advisory Agreement to an affiliate for whom our Adviser agrees to guarantee its obligations to us.

Gladstone Securities

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Dealer-Manager Agreements

In connection with the continuous public offering of our Series B Preferred Stock (which was completed in March 2020), our Series C Preferred Stock (which was completed in December 2022), and our Series E Preferred Stock (which offering is ongoing), we entered into certain dealer-manager agreements with Gladstone Securities, whereby Gladstone Securities served or serves, as appropriate, as our exclusive dealer-manager.

In connection with the continuous public offering of our Series C Preferred Stock (which was completed in December 2022) and our Series E Preferred Stock (which offering is ongoing), we entered into certain dealer-manager agreements with Gladstone Securities, whereby Gladstone Securities served or serves, as appropriate, as our exclusive dealer-manager.

Pursuant to each of these dealer-manager agreements, Gladstone Securities provided or provides certain sales, promotional, and marketing services to us in connection with the offering of the respective stock.

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We do not currently have any employees and do not expect to have any employees in the foreseeable future.

Currently, services necessary for our business are provided by individuals who are employees of our Adviser and our Administrator pursuant to the terms of the Current Advisory Agreement and the Administration Agreement, respectively.

Each of our executive officers is an employee or executive officer, or both, of each our Adviser and our Administrator.

Currently, services necessary for our business are provided by individuals who are employees of our Adviser and our Administrator pursuant to the terms of the Advisory Agreement and the Administration Agreement, respectively.

Each of our executive

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officers is an employee or executive officer, or both, of each our Adviser and our Administrator.

We expect that approximately 15 to 25 full-time employees of our Adviser and our Administrator will spend substantial time on our matters during the 2025 calendar year.

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We face competition for farmland acreage from many different entities, including, but not limited to, developers, municipalities, individual farmers, agriculture corporations, institutional investors, and others.

Investment firms that we might compete

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directly against could include agricultural investment firms, such as Hancock Agricultural Investment Group, Prudential Agricultural Investments, and UBS AgriVest, LLC.

Investment firms that we might compete directly against could include agricultural investment firms, such as Hancock Agricultural Investment Group, Prudential Agricultural Investments, and UBS AgriVest, LLC.

These firms engage in the acquisition, asset management, valuation, and disposition of farmland properties.

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other agricultural-focused privately-held funds, such as AgIS Capital, LLC, and Homestead Capital;

and various online farmland crowdfunding platforms (e.g., AcreTrader, FarmTogether).

and various online farmland crowdfunding platforms (e.g., AcreTrader, FarmTogether, etc.).

Government Regulations

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Available Information

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Copies of each of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments, if any, to those reports filed or furnished with the SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through our website at www.GladstoneLand.com .

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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 1. Business