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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 14, 2022
GENERATION INCOME PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland |
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001-40771 |
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47-4427295 |
(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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401 East Jackson Street, Suite 3300 Tampa, Florida |
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33602 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (813)-448-1234
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, par value $0.01 per share
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GIPR |
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The Nasdaq Stock Market LLC |
Warrants to purchase Common Stock |
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GIPRW |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On October 14, 2022, Generation Income Properties, Inc. (the “Company”), through its operating partnership Generation Income Properties L.P. (the “Operating Partnership”), entered into a loan transaction that is evidenced by a secured non-convertible promissory note (the "Promissory Note") to Brown Family Enterprises, LLC ("Lender") for $1.5 million that is due on October 14, 2024, and bears a fixed interest rate of 9%, simple interest. Interest is payable monthly. The loan may be repaid without penalty at any time. The loan is secured by the Operating Partnership’s equity interest in its current direct subsidiaries that hold real estate assets pursuant to the terms of a Security Agreement between the Operating Partnership and Lender (the "Security Agreement").
The foregoing summary of the terms and conditions of the Promissory Notes and the Security Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, which are attached as exhibits hereto and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligations or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information contained under Item 1.01 above is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
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(d) |
Exhibits.
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Exhibit No. |
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Description |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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Forward-Looking Statements
This Current Report on Form 8-K may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Investors are cautioned that there can be no assurance actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Please refer to the risks detailed from time to time in the reports we file with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC, as well as other filings on Form 10-Q and periodic filings on Form 8-K, for additional factors that could cause actual results to differ materially from those stated or implied by such forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GENERATION INCOME PROPERTIES, INC. |
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Date: October 18, 2022 |
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By: |
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/s/ Allison Davies |
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Allison Davies |
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Chief Financial Officer |
THE SECURED PROMISSORY NOTE REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURED PROMISSORY NOTE, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE MAKER RECEIVES AN OPINON OF COUNSEL FROM THE HOLDER OF THIS SECURED PROMISSORY NOTE REASONABLY SATISFACTORY TO THE MAKER STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
$1,500,000.00 October 14, 2022
FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, Generation Income Properties, L.P., a Delaware limited partnership (the “Maker”), hereby unconditionally promises to pay to the order of Brown Family Enterprises LLC or its assigns (the “Noteholder,” and together with the Maker, the “Parties”), the principal amount of One Million Five Hundred Thousand U.S. Dollars ($1,500,000) (the “Loan”), together with all accrued interest thereon, as provided in this Secured Promissory Note (the “Note,” as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms).
“Applicable Rate” means the rate equal to nine percent (9%).
“Business Day” means a day other than a Saturday, Sunday, or other day on which commercial banks in the State of Florida are authorized or required by law to close.
“Default” means any of the events specified in Section 6 which constitute an Event of Default or which, upon the giving of notice, the lapse of time, or both, pursuant to Section 6 would, unless cured or waived, become an Event of Default.
“Event of Default” has the meaning set forth in Section 6.
“Governmental Authority” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal, or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or pertaining to, government.
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“Interest Payment Date” means the last day of each month. “Loan” has the meaning set forth in the introductory paragraph.
“Maker” has the meaning set forth in the introductory paragraph.
“Maturity Date” means the earlier of (a) two years after the date of this Note and (b) the date on which all amounts under this Note shall become due and payable pursuant to Section 7.
“Note” has the meaning set forth in the introductory paragraph.
“Noteholder” has the meaning set forth in the introductory paragraph.
“Parties” has the meaning set forth in the introductory paragraph.
“Person” means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, Governmental Authority, or other entity.
“Security Agreement” means the Security Agreement, dated as of the date hereof, by and between the Maker and Noteholder, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
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Generation Income Properties, L.P.
401 East Jackson Street, Suite 3300
Tampa, FL 33602
Attn: David Sobelman
Email: ds@gipreit.com
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(b) If to Noteholder:
Brown Family Enterprises LLC
2909 West Bay to Bay Blvd, Suite 500
Tampa, FL 33629
Email: cbrown@harmony.solutions
Notices if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received; and (ii) sent by email during the recipient's normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the next Business Day).
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WITNESS WHEREOF, the Maker has executed this Note as of the first date set forth above.
GENERATION INCOME PROPERTIES, L.P.
By: Generation Income Properties, Inc., a Maryland corporation, its General Partner
By: /s/ David Sobelman
David Sobelman, President
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of October 14, 2022 (as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”), is made by and among Generation Income Properties, L.P., a Delaware limited partnership (the “Grantor”), in favor of Brown Family Enterprises, a Florida limited liability company (the “Secured Party”).
WHEREAS, on the date hereof, the Grantor has entered into a Secured Promissory Note (as amended, supplemented or otherwise modified from time to time, the “Note”), with the Secured Party, pursuant to which the Secured Party, subject to the terms and conditions contained therein, is to make a loan to the Grantor; and
WHEREAS, under the terms of this Agreement, the Grantor desires to grant to the Secured Party a security interest in the Collateral, as defined herein, to secure any and all Secured Obligations, as defined herein.
NOW THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
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IN WITNESS WHEREOF, the undersigned Grantor and Secured Party have executed this Security Agreement as of the date first above written.
GRANTOR:
GENERATION INCOME PROPERTIES, L.P.
By: Generation Income Properties, Inc., a
Maryland corporation, its General Partner
By:/s/ David Sobelman
David Sobelman, President
SECURED PARTY:
BROWN FAMILY ENTERPRISES LLC
By: /s/ Christian Brown
Name: Christian HG Brown
Title: CEO
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