Q1 2026 Gladstone Land Corp Earnings Call

May 12, 2026

Operator: Greetings, welcome to Gladstone Land Corporation Q1 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the call over to Mr. David Gladstone, Chairman and Chief Executive Officer. Thank you. You may begin.

Speaker #2: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the call over to Mr. David Gladstone, chairman and chief executive officer.

Speaker #2: Thank you. You may begin. Well, thank you so much for that nice introduction. This is David Gladstone, and welcome to the quarterly conference call for GLADSTONE LAND.

David Gladstone: Well, thank you so much for that nice introduction. This is David Gladstone, and welcome to the Quarterly Conference Call for Gladstone Land. Thank you all for calling in today. We appreciate you taking time out of your day to listen to our presentation. First, we're going to hear from Catherine Gerkis. She's Director of Investor Relations. She's going to provide a brief disclosure regarding certain regulatory matters concerning this call today. Catherine, go ahead.

Speaker #2: Thank you all for calling in today. We appreciate you taking time out of your day to listen to our presentation. First, we're going to hear from Catherine Gerkis.

Speaker #2: She's director of investor relations; she's going to provide a brief disclosure regarding certain regulatory matters concerning this call today. Catherine, go ahead. Thank you, David, and good morning.

Catherine Gerkis: Thank you, David. Good morning. Today's call may include forward-looking statements, which are based on management's estimates, assumptions, and projections. There are no guarantees of future performance, and actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the investors page of our website, gladstoneland.com. We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10-Q and earnings press release, both issued yesterday, for more detailed information. You can also sign up for our email notification service and find information on how to contact our investor relations department. We are also on X, @GladstoneComps, as well as Facebook and LinkedIn. Keyword for both is The Gladstone Companies.

Speaker #2: Today's call may include forward-looking statements, which are based on management's estimates, assumptions, and projections. There are no guarantees of future performance and actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the investor's page of our website, gladstoneland.com.

Speaker #2: We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10Q and earnings press release.

Speaker #2: Both issued yesterday. For more detailed information, you can also sign up for our email notification service and find information on how to contact our investor relations department.

Speaker #2: We are also on X at GLADSTONE COMPS, as well as Facebook and LinkedIn. Keyword for both is the GLADSTONE COMPANIES. Today, we'll discuss FFO, which is funds from operations, a non-GAAP accounting term defined as net income, excluding gains or losses from the sale of real estate and any impairment losses on property, plus depreciation and amortization of real estate assets.

Catherine Gerkis: Today, we'll discuss FFO, which is funds from operations, a non-GAAP accounting term defined as net income, excluding gains or losses from the sale of real estate and any impairment losses on property, plus depreciation and amortization of real estate assets. We may also discuss Core FFO, which we generally define as FFO adjusted for certain non-recurring revenues and expenses, and Adjusted FFO, which further adjusts Core FFO for certain non-cash items, such as converting GAAP rents to normalized cash rents. We believe these metrics can be a better indication of our operating results and allow better comparability of our period-over-period performance. Now, I'll turn it back to David Gladstone.

Speaker #2: We may also discuss core FFO, which we generally define as FFO adjusted for certain non-recurring revenues and expenses, and adjusted FFO, which further adjusts core FFO for certain non-cash items, such as converting GAAP rents to normalized cash rents.

Speaker #2: We believe these metrics can be a better indication of our operating results and allow better comparability of our period-over-period performance. Now, I'll turn it back to David Gladstone.

Speaker #2: Well, thank you for it, Catherine, and just remind you all we still own about 99,000 acres across 144 farms. About 56,000 acres of acre-feet of water which is more than 18 billion gallons.

David Gladstone: Well, thank you, Catherine. Just to remind you all, we still own about 99,000 acres across 144 farms, about 56,000 acre feet of water, which is more than 18 billion gallons. Our farms are in 14 different states. Our water assets, well, they're all in California. That's where it's the driest. We didn't have any acquisition or sales activity during the quarter. We may consider selling some additional farms during the next few quarters. If we're able to complete some of those, we'd like to use most of the proceeds to pay down debt and buy back preferred stock. We've been doing a lot of that. We're continuing to take a disciplined approach, as we always do, to these acquisitions. There's some activity in the market now, but not much. Still kind of slow.

Speaker #2: Our farms are in 14 different states and our water assets, well, they're all in California. That's where it's the driest. We didn't have any acquisition or sales activity during the quarter, but we may consider selling some additional farms during the next few quarters.

Speaker #2: If we're able to complete some of those, we'd like to use most of the proceeds to pay down debt and buy back preferred stock.

Speaker #2: We've been doing a lot of that. We're continuing to take a disciplined approach as we always do to these acquisitions and active there's some activity in the market now, but not much.

Speaker #2: Still kind of slow. When conditions improve, it may make sense to start growing again, so we're watching all the numbers and trying to determine where we're going to go from here.

David Gladstone: When conditions improve, it may make sense to start growing again. We're watching all the numbers and trying to determine where we're gonna go from here. Let me talk about a couple of leases. Prior to the call, due to market conditions affecting certain of our permanent crops, particularly the nuts and the wine grapes, we modified the lease structures so that we can handle a couple of different things. Fixed costs were allowed to participate more in the upside because we're in the higher crops share participation. We've modified our leases so that we're taking a lot more risk in terms of growing. You know, we continue to operate two properties with the help of third-party growers. Overall, 2025 harvest came in very strong. We were all wrong, including the US government. Imagine that they projected things wrong.

Speaker #2: Let me talk about a couple of leases. Prior to the call, due to market conditions affecting certain of our permanent crops, particularly the nuts and the wine grapes, we modified the leases' structures.

Speaker #2: Lease structures so that we can handle a couple of different things. Fixed costs were allowed to participate more in the upside because we're in the higher crops.

Speaker #2: Share participation. We've modified our leases so that we're we're taking a lot more risk in terms of growing. We continue to operate two properties.

Speaker #2: With the help of third-party growers, overall, the 2025 harvest came in very strong. We were all wrong, including the US government—imagine that. They projected things wrong.

David Gladstone: Particularly on the almond side and pistachio side, the yields were generally meeting or exceeding our own projections. The 2025 co-crop just continues paying. We keep getting money in. We signed up most of these same farms under the similar agreement that we had in 2026, so we expect to see some similar earning patterns this year. I think it'd be very hard to meet or exceed those things that we did last year. That was quite a year, 2025. I also wanna remind everyone that the crop insurance continues to play a very important role to hear, all of us. It helps us limit the downside risk on the farms. That is, if something happens, which sometimes does, we can call on the insurance to give us some money back.

Speaker #2: Particularly on the almond side, pistachio side, the yields were generally meeting or exceeding our own projections, and the 2025 crop just continues paying. We keep getting money in.

Speaker #2: We signed up most of the same farms under the similar agreement that we had in '26, so we're expecting to see some similar earning patterns.

Speaker #2: This year, I think it would be very hard to meet or exceed those things that we did last year. That was quite a year, 2025.

Speaker #2: And I also want to remind everyone that the crop insurance continues to play a very important role in all of us. It helps us limit the downside risk on the farms.

Speaker #2: That is, if something happens, which sometimes does, we can call on the insurance to give us some money back. Our goal is to eventually transition all of our farms back to more traditional lease structures with fixed-based rents.

David Gladstone: Our goal is to eventually transition all of our farms back to more traditional lease structures with fixed-based rents. The timing for that will depend on several factors that are out there today. Most importantly, we gotta get some lower interest rates. I don't know what's going on over at that Federal Reserve, but they just aren't playing the game they need to play. Looking ahead, we have 5 leases scheduled to expire over the next 6 months. In total, these leases represent about 4% of our total lease revenue for the year-to-date in 2026. We currently are in discussion with both of the existing tenants that two of these properties are in, and the prospects of new tenants about leasing any of these farms. I think we'll have them all back in shape.

Speaker #2: But the timing for that will depend on several factors that are out there today. Most importantly, we've got to get some lower interest rates out of what's going on over at that Federal Reserve, but they just aren't playing the game they need to play.

Speaker #2: Looking ahead, we have five leases scheduled to expire over the next six months. In total, these leases represent about 4% of our total lease revenue for the year to date in 2026.

Speaker #2: We currently are in discussion with both of the existing tenants that are in these that two of these properties are in, and the prospects of new tenants at about leasing any of these farms.

Speaker #2: I think we'll have them all back in shape. And now, I'll give a quick update to some of the ongoing tenancy matters that we're working through.

David Gladstone: Now I'll give a quick update to some of the ongoing tenancy matters that we're working through. Currently have eight farms that are wholly or partially vacant, and we're actively working towards solutions to get these farms back into the stable. We think we're getting close to a few of these, and I think we'll be in good shape before the year ends. We're also currently recognizing revenue in a cash basis for leases with four tenants. We were able to resolve one of those situations during the quarter, but we're adding two new tenants to the list after they fell behind on their rent payments. I'm gonna stop here, we'll call in the guy who's really in touch with the world of farming, and that's Bill Ryman. He's been reporting much of our current management focus. Bill, you wanna come on board?

Speaker #2: Currently, we have eight farms that are wholly or partially vacant, and we're actively working towards solutions to get these farms back into a stable.

Speaker #2: We think we're getting close to a few of these, and I think we'll be in good shape before the year ends. We're also currently recognizing revenue in a cash basis for leases with four tenants.

Speaker #2: We were able to resolve one of those situations during the quarter, but we're adding two new tenants to the list after they fell behind on their rent payments.

Speaker #2: I'm going to stop here, and we'll call in the guy who's really in touch with the world of farming, and that's Bill Reiman. He's been reporting much of our current management focus.

Speaker #2: And Bill, you want to come on board? Yeah. Thanks, David. Good morning, everybody. As we've been reporting much of our current management focus is on these properties being operated under the modified lease agreements or farmed directly utilizing third-party farm operators.

Bill Ryman: Thanks, David. Good morning, everybody. As we've been reporting, you know, much of our current management focus is on, you know, these properties being operated under the modified lease agreements or farmed directly utilizing third-party farm operators. With the marketing season for almonds and pistachios for the 2025 crop about half done, we're seeing prices firming up, especially with pistachios. Couple that with our crop yields being larger than forecasted, our final crop revenue and profit numbers for 2025 should beat our expectations. Looking forward to the 2026 season, we are through winter, which ended with a very meager snowpack in most western US watersheds. Although many areas where our farms are located received above normal rainfall, especially in the early spring.

Bill Reiman: Thanks, David. Good morning, everybody. As we've been reporting, you know, much of our current management focus is on, you know, these properties being operated under the modified lease agreements or farmed directly utilizing third-party farm operators. With the marketing season for almonds and pistachios for the 2025 crop about half done, we're seeing prices firming up, especially with pistachios. Couple that with our crop yields being larger than forecasted, our final crop revenue and profit numbers for 2025 should beat our expectations. Looking forward to the 2026 season, we are through winter, which ended with a very meager snowpack in most western US watersheds. Although many areas where our farms are located received above normal rainfall, especially in the early spring.

Speaker #2: With the marketing season for almonds and pistachios for the 2025 crop, about half done. We're seeing prices firming up, especially with pistachios. A couple of that with our crop yields being larger than forecasted, our final crop revenue and profit numbers for 2025 should beat our expectations.

Speaker #2: Looking forward to the 2026 season. We are through winter, which ended with a very meager snowpack in most western US watersheds. Although many areas where our farms are located receive the above-normal rainfall, especially in the early spring, this means spring soil water content is high, and it should get crops off to potentially strong start.

Bill Ryman: This means spring soil water content is high, and it should get crops off to a potentially strong start. As of 1 April, our almond bloom was complete, and while across California bloom was mixed, our locations look pretty darn good with initial crop set stronger than last year's. March had an unusual hot spell right in the middle of pistachio bloom, and this weather event's caused quite a few issues around the state. Specifically, some trees have aborted a significant percentage of their crop. It's difficult to tell the impact to our orchard at this time, mainly because the 2026 crop year is considered what we call a down year for pistachios.

Bill Reiman: This means spring soil water content is high, and it should get crops off to a potentially strong start. As of 1 April, our almond bloom was complete, and while across California bloom was mixed, our locations look pretty darn good with initial crop set stronger than last year's. March had an unusual hot spell right in the middle of pistachio bloom, and this weather event's caused quite a few issues around the state. Specifically, some trees have aborted a significant percentage of their crop. It's difficult to tell the impact to our orchard at this time, mainly because the 2026 crop year is considered what we call a down year for pistachios.

Speaker #2: As of April 1st, our almond bloom was complete, and while across California bloom was mixed, our locations are pretty darn good with initial crops at stronger than last year's.

Speaker #2: March had an unusual hot spell right in the middle of pistachio bloom, and this weather event caused quite a few issues around the state, specifically some trees have aborted significant percentage of their crop.

Speaker #2: It's difficult to tell the impact to our orchards at this time, mainly because the 2026 crop year is considered what we call a down year for pistachios.

Bill Ryman: Pistachios are what we call alternate-bearing, meaning that crop yields on a year-to-year basis can vary from very high to very low and can be very dramatic. Since this is a low production year or a down year, as we say, some of our pistachio blocks didn't have as much crop, didn't have much crop on there before the heat spell, so it's possible that impact we feel would be minimal. Another reason it's hard to predict is just how the remaining fruit set develops. You know, there's a long way to go in the growing season, and we just don't know how it'll shape up, so. Also another factor, you know, this impact is with a major reduction in supply, it's definitely gonna continue putting upward pressure on pricing.

Speaker #2: Pistachios are what we call alternate bearing, meaning that crop yields on a year-to-year basis can vary from very high to very low, and the swings can be very dramatic.

Bill Reiman: Pistachios are what we call alternate-bearing, meaning that crop yields on a year-to-year basis can vary from very high to very low and can be very dramatic. Since this is a low production year or a down year, as we say, some of our pistachio blocks didn't have as much crop, didn't have much crop on there before the heat spell, so it's possible that impact we feel would be minimal. Another reason it's hard to predict is just how the remaining fruit set develops. You know, there's a long way to go in the growing season, and we just don't know how it'll shape up, so. Also another factor, you know, this impact is with a major reduction in supply, it's definitely gonna continue putting upward pressure on pricing.

Speaker #2: Since this is a low production year, or a down year as we say, some of our pistachio blocks didn't have as much crop didn't have much crop on there before the heat spell, so it's possible that impact we feel would be minimal.

Speaker #2: Another reason it's hard to predict is just how the remaining fruit set develops. It's a long way to go in the growing season, and we just don't know how it'll shape up.

Speaker #2: So and also, another factor, this impact is with a major reduction in supply. It's definitely going to continue putting upward pressure on pricing. There's a chance that pricing outweighs the crop loss.

Bill Ryman: There's a chance that pricing outweighs the crop loss. We'll just have to wait and see. Currently, all of our properties where we have invested capital in the crops are tracking according to budget. We may have an increase in water expense on a couple of ranches. We should end up right in line with budget targets. Talk about markets a little bit. We think most ag real estate markets in the Western US have bottomed out, and we're starting to see a little more activity with transactions. In particular, we've seen several pistachio acquisitions complete in the last six months at prices we haven't seen in a few years.

Bill Reiman: There's a chance that pricing outweighs the crop loss. We'll just have to wait and see. Currently, all of our properties where we have invested capital in the crops are tracking according to budget. We may have an increase in water expense on a couple of ranches. We should end up right in line with budget targets. Talk about markets a little bit. We think most ag real estate markets in the Western US have bottomed out, and we're starting to see a little more activity with transactions. In particular, we've seen several pistachio acquisitions complete in the last six months at prices we haven't seen in a few years.

Speaker #2: So we'll just have to wait and Currently, all of our properties where we have invested capital in the crops are tracking according to budget.

Speaker #2: And we may have an increase in water expense on a couple of ranches. We should end up right in line with budget targets. Talk about markets a little bit.

Speaker #2: We think most ag real estate markets in the Western U.S. have bottomed out, and we're starting to see a little more activity with transactions.

Speaker #2: In particular, we've seen several pistachio acquisitions completed in the last six months at prices we haven't seen in a few years. We don't believe valuations are necessarily making a comeback just yet, but there are some strategic buyers willing to pay a higher price for orchards with good cash flow potential.

Bill Ryman: We don't believe valuations are necessarily making a comeback just yet, but there are some strategic buyers willing to pay a higher price for orchards with good cash flow potential. Coastal California values remain flat with higher than normal inventory, and the Pacific Northwest is stable. When really good properties come on the market up there, they sell very quickly. You know, medium, lower quality properties sit and wait. I'd say values and rents in the Pacific Northwest are stable. A last note on real estate markets in, particularly in California, but really all over the West, we're seeing a divergence of values between properties with really good water and those without. You know, due to regulations and policy, we expect that to really be a permanent, a permanent situation.

Bill Reiman: We don't believe valuations are necessarily making a comeback just yet, but there are some strategic buyers willing to pay a higher price for orchards with good cash flow potential. Coastal California values remain flat with higher than normal inventory, and the Pacific Northwest is stable. When really good properties come on the market up there, they sell very quickly. You know, medium, lower quality properties sit and wait. I'd say values and rents in the Pacific Northwest are stable. A last note on real estate markets in, particularly in California, but really all over the West, we're seeing a divergence of values between properties with really good water and those without. You know, due to regulations and policy, we expect that to really be a permanent, a permanent situation.

Speaker #2: Coastal California values remain flat with higher-than-normal inventory, and the Pacific Northwest is stable. When really good properties come on the market up there, they sell very quickly.

Speaker #2: Medium lower-quality properties sit and wait. I'd say values and rents in the Pacific Northwest are stable. And the last note on real estate markets in particularly in California, but really all over the West, we're seeing a divergence of values between properties with really good water and those without.

Speaker #2: Due to regulations and policy, we expect that to really be a permanent situation. The war in Iran, continued tariff drama, trade tensions—they're all still in the headlines.

Bill Ryman: The war in Iran, continued tariff drama, trade tensions are all still in the headlines, but crop markets seem to have settled in and kind of accepted this uncertainty to a large degree. Nut crop markets continue to show notable resilience and strength, particularly for pistachios. Seen tremendous growth in demand for all things pistachio in global markets. Global prices are continuing to move upward. We expect our minimum pricing for 2026 to be significantly higher than 2025, so that's good news. I would say the general sentiment in the pistachio industry is even with a large number of non-bearing acres, it's underplanted. So this is really good news for growers, you know, and the value of their crop going forward. And for us, it's really important. It's the largest crop in our portfolio.

Bill Reiman: The war in Iran, continued tariff drama, trade tensions are all still in the headlines, but crop markets seem to have settled in and kind of accepted this uncertainty to a large degree. Nut crop markets continue to show notable resilience and strength, particularly for pistachios. Seen tremendous growth in demand for all things pistachio in global markets. Global prices are continuing to move upward. We expect our minimum pricing for 2026 to be significantly higher than 2025, so that's good news. I would say the general sentiment in the pistachio industry is even with a large number of non-bearing acres, it's underplanted. So this is really good news for growers, you know, and the value of their crop going forward. And for us, it's really important. It's the largest crop in our portfolio.

Speaker #2: But crop markets seem to have settled in and kind of accepted this uncertainty to a large degree. Crop markets continue to show notable resilience and strength, particularly for pistachios.

Speaker #2: Seen tremendous growth in demand for all things pistachio in global markets. Growth prices continue to move upward, we expect our minimum pricing for 2026 to be significantly higher than 2025.

Speaker #2: So that's good news. I would say the general sentiment in the pistachio industry is even with a large number of non-bearing acres, it's underplanted.

Speaker #2: So this is really good news for growers and the value of their crop going forward. And for us, it's really important. It's the largest crop in our portfolio.

Speaker #2: Almonds have been pretty steady. Some minor ups and downs. Doing large part to the drama in the Strait of Hormuz. But prices have laid been trending upward after recent crop size projections were released, showing a similar crop to last year.

Bill Ryman: Almonds have been pretty steady, some minor ups and downs, due in large part to the drama in the Strait of Hormuz. Prices of late have been trending upward after recent crop size projections were released showing a similar crop to last year. It appears the market was expecting a larger crop and therefore lower prices. We've reported in the past that we believe the market is underbought, these lower than expected predictions are driving buyers to fulfill their needs. Wine grape markets continue to underperform, although we're beginning to see some varietals, particularly some light grape varietals, become short in supply. At the moment, this isn't causing any increase in prices or providing any incentive for wineries to contract for supply, but it is the first encouraging sign we've seen in a couple of years.

Bill Reiman: Almonds have been pretty steady, some minor ups and downs, due in large part to the drama in the Strait of Hormuz. Prices of late have been trending upward after recent crop size projections were released showing a similar crop to last year. It appears the market was expecting a larger crop and therefore lower prices. We've reported in the past that we believe the market is underbought, these lower than expected predictions are driving buyers to fulfill their needs. Wine grape markets continue to underperform, although we're beginning to see some varietals, particularly some light grape varietals, become short in supply. At the moment, this isn't causing any increase in prices or providing any incentive for wineries to contract for supply, but it is the first encouraging sign we've seen in a couple of years.

Speaker #2: It appears the market was expecting a larger crop, and therefore lower prices. We've reported in the past that we believe the market is underbought.

Speaker #2: So these lower-than-expected predictions are driving buyers to fulfill their needs. Wine grape markets continue to underperform, although we're beginning to see some varietals, particularly some white grape varietals, become short in supply.

Speaker #2: At the moment, this isn't causing any increase in prices or providing any incentive for wineries to contract for supply. But it is the first encouraging sign we've seen in a couple of years.

Speaker #2: Vineyard removals continue at a rapid pace in California and around the world. So we're hopeful that this pullback in supply will soon bring the market back into balance.

Bill Ryman: Vineyard removals continue at a rapid pace in California and around the world, we're hopeful that this pullback in supply will soon bring the market back into balance. It's been a lot said about fertilizer and fuel prices jumping up due to the war. While this is true, our exposure is somewhat limited. Overall fertilizer cost as a percentage of total cultural cost for most of the crops grown on our farms is relatively small. In the case of our operated farms, there were many purchases made pre-war, that limits the impact in those particular cases. Finally, water. We initially had a strong start to the winter in terms of snow and rain.

Bill Reiman: Vineyard removals continue at a rapid pace in California and around the world, we're hopeful that this pullback in supply will soon bring the market back into balance. It's been a lot said about fertilizer and fuel prices jumping up due to the war. While this is true, our exposure is somewhat limited. Overall fertilizer cost as a percentage of total cultural cost for most of the crops grown on our farms is relatively small. In the case of our operated farms, there were many purchases made pre-war, that limits the impact in those particular cases. Finally, water. We initially had a strong start to the winter in terms of snow and rain.

Speaker #2: It's been a lot said about fertilizer and fuel prices, jumping up due to the war. While this was true, our exposure is somewhat limited.

Speaker #2: Overall, fertilizer cost as a percentage of total cultural cost for most of the crops grown on our farms is relatively small. In the case of our operated farms, there were many purchases made pre-war.

Speaker #2: So that limits the impact in those particular cases. Finally, water. We initially had a strong start to the winter in terms of snow and rain.

Speaker #2: However, once we got past early January, we only had a few storms come through. And they came in late winter and early spring. The result is a very weak snowpack, but reservoirs above normal, and good spring moisture set the season off on a good note.

Bill Ryman: However, once we got past early January, we only had a few storms come through, and they came in late winter and early spring. The result is a very weak snowpack, but reservoirs above normal, and good spring moisture set the season off on a good note. We're in the market looking for good opportunities to acquire water for this year and beyond. We're still experiencing the positive effects of this recent wet year trend that's resulted in the availability of water at economical prices. Our team continues to evaluate these opportunities with the goal of strengthening the overall water security of the portfolio through both long and short-term strategic water purchases, continuing to invest in water delivery, storage infrastructure, and identifying opportunities to create synergies across our farm assets.

Bill Reiman: However, once we got past early January, we only had a few storms come through, and they came in late winter and early spring. The result is a very weak snowpack, but reservoirs above normal, and good spring moisture set the season off on a good note. We're in the market looking for good opportunities to acquire water for this year and beyond. We're still experiencing the positive effects of this recent wet year trend that's resulted in the availability of water at economical prices. Our team continues to evaluate these opportunities with the goal of strengthening the overall water security of the portfolio through both long and short-term strategic water purchases, continuing to invest in water delivery, storage infrastructure, and identifying opportunities to create synergies across our farm assets. Now I'll turn it over to our CFO, Lewis Parrish.

Speaker #2: We're in the market looking for good opportunities to acquire water for this year and beyond. We're still experiencing the positive effects of this recent wet year trend that's resulted in availability of water at economical prices.

Speaker #2: Our team continues to evaluate these opportunities with the goal of strengthening the overall water security of the portfolio through both long and short-term strategic water purchases.

Speaker #2: Continuing to invest in water delivery, storage infrastructure, and identifying opportunities to create synergies across our farm assets. Now I'll turn it over to our CFO, Lewis Parrish.

Bill Ryman: Now I'll turn it over to our CFO, Lewis Parrish.

Speaker #1: Thanks, Bill. And good morning, everyone. I'll start with a brief update on our recent financing activity. We did not incur any new borrowings or repaying loans during the quarter, but we did add some unencumbered properties to certain existing and new credit facilities that increased our immediately available liquidity by about $50 million.

Lewis Parrish: Thanks, Bill. Good morning, everyone. I'll start with a brief update on our recent financing activity. We did not incur any new borrowings or repay any loans during the quarter, but we did add some unencumbered properties to certain existing and new credit facilities that increased our immediately available liquidity by about $50 million. In January, we redeemed all of our Series D Term Preferred Stock to avoid a step up in the coupon from 5% to 8%. That redemption was funded through a combination of common stock issued under our ATM program and a draw on our line of credit, which has since been repaid.

Speaker #1: And in January, we redeemed all of our Series B term-preferred stock to avoid a step-up in the coupon from 5% to 8%. That redemption was funded through a combination of common stock issued under our ATM program and a draw on our line of credit, which has since been repaid.

Speaker #1: So far in 2026, we've raised about $50 million through our ATM program. And along with the majority along with the proceeds from the recent property sales, the majority of this capital has been used to reduce leverage on the balance sheet.

Lewis Parrish: So far in 2026, we've raised about $50 million through our ATM program, along with the proceeds from the recent property sales, the majority of this capital has been used to reduce leverage on the balance sheet, including the redemption of the Series D Term Preferred Stock, repaying the line of credit, and buying back preferred stock through our repurchase program. Speaking of that last point, we've bought back over $6 million of preferred stock so far in 2026 at an average repurchase yield of 7.4%, resulting in a total gain of nearly $700,000. Turning to our operating results, for Q1, we recorded a net loss of about $4.3 million and net loss to common shareholders of $10 million or $0.24 per share.

Speaker #1: Including the redemption of the Series B term-preferred stock, repaying the line of credit, and buying back preferred stock through our repurchase program. And speaking of that last point, we've bought back over $6 million of preferred stock so far in 2026 at an average repurchase yield of 7.4%, resulting in a total gain of nearly $700,000.

Speaker #1: Turning to our operating results, for the first quarter, we recorded a net loss of about 4.3 million dollars and a net loss to common shareholders of 10 million.

Speaker #1: Or $0.24 per share. Adjusted FFO for the first quarter was $3.1 million, or $0.08 per share, compared to $2 million, or $0.06 per share, in the same quarter last year.

Lewis Parrish: Adjusted FFO for Q1 was $3.1 million or $0.08 per share, compared to $2 million or $0.06 per share in the same quarter last year. The increase in AFFO was primarily driven by an early pistachio crop bonus payment we received, partially offset by ongoing tenant-related issues we continue to work through. Year over year, fixed base cash rents decreased by about $2.4 million for the quarter, primarily due to lost revenues from one property that was transitioned to direct operations last year and two tenants that were placed on non-accrual status this quarter. The prior year quarter also included a $2.4 million termination fee from an outgoing tenant.

Speaker #1: The increase in AFFO was primarily driven by an early pistachio crop bonus payment we received offshore, set by ongoing tenant-related issues we continue to work through.

Speaker #1: Year over year, fixed base cash rents decreased by about 2.4 million dollars for the quarter. Primarily due to lost revenues from one property that was transitioned to direct operations last year.

Speaker #1: And two tenants that were placed on non-equitable status this quarter. The prior year quarter also included a 2.4 million dollar termination fee from an outgoing tenant.

Speaker #1: This decrease was largely offset by an increase in participation rents of about 4.4 million dollars primarily due to receipt of an early partial bonus payment on the 2025 pistachio crop.

Lewis Parrish: This decrease was largely offset by an increase in participation rents of about $4.4 million, primarily due to receipt of an early partial bonus payment on the 2025 pistachio crop. Typically, this bonus is paid in, you know, late 2026 or early 2027, but one of our processors paid a portion of it early, which allowed us to recognize that revenue earlier than normal. The remaining portion of the bonus is still expected to be recognized on the normal schedule and recognized in Q4. Net income generated from crop sales on our direct operating farms was about $1.9 million during Q1, and that was also primarily due to the early statue bonus payment. Also similar to participation rents, we expect to recognize the remaining portion of this marketing bonus later in 2026.

Speaker #1: Typically, this bonus is paid in either late 2026 or early 2027. But one of our processors paid a portion of it early, which allowed us to recognize that revenue earlier than normal.

Speaker #1: The remaining portion of the bonus is still expected to be recognized on the normal schedule and recognized in the fourth quarter. Net income generated from crop sales on our direct operated farms was about $1.9 million during the first quarter.

Speaker #1: And that was also primarily due to the early pistachio bonus payment. And also similar to participation rents, we expect to recognize the remaining portion of this marketing bonus later in 2026.

Speaker #1: On the expense side, our recurring cash operating expenses increased by about $750,000. Total related party fees declined slightly, primarily due to a lower base management fee resulting from recent farm sales.

Lewis Parrish: On the expense side, our recurring cash operating expenses increased by about $750,000. Total related party fees declined slightly, primarily due to a lower base management fee resulting from recent farm sales. Property operating expenses increased, mainly driven by the cost of supplemental water we were required to provide on one of our properties pursuant to the lease, as well as higher professional fees associated with protecting water rights on certain farms in California. G&A expenses increased primarily due to higher legal and accounting fees incurred during the current quarter. Finally, cash flows from operations increased largely as a result of higher cash receipts from participation rents and crop sales, partially offset by the receipt of that termination fee in the prior year quarter.

Speaker #1: Property operating expenses increased, mainly driven by the cost of supplemental water we were required to provide on one of our properties pursuant to the lease.

Speaker #1: As well as higher professional fees associated with protecting water rights on certain farms in California. G&A expenses increased, primarily due to higher legal and accounting fees incurred during the current quarter.

Speaker #1: And finally, cash flows from operations increased, largely as a result of higher cash receipts from participation rents and crop sales partially offset by the receipt of that termination fee in the prior year quarter.

Speaker #1: Turning to liquidity, we currently have about $150 million of immediately available capital and over $110 million of unpledged properties that could be used as a additional collateral if needed.

Lewis Parrish: Turning to liquidity, we currently have about $150 million of immediately available capital and over $110 million of unpledged properties that could be used as additional collateral as needed. Currently, over 99% of our borrowings are at fixed rates, with a weighted average interest rate of 3.41% locked in for another 2.5 years. This has helped shield us from the interest rate volatility we have seen over the past few years. Looking ahead, we have about $17 million of scheduled principal amortization payments due in the next 12 months, which is less than 4% of our total debt outstanding. We also have about $155 million of loans with fixed rate terms that reset over the next year, though the loans themselves are not maturing.

Speaker #1: Currently, over 99% of our borrowings are at fixed rates, with a weighted average interest rate of 3.41% locked in for another two and a half years.

Speaker #1: This has helped show this from the interest rate volatility we have seen over the past few years. Looking ahead, we have about $17 million of scheduled principal amortization payments due in the next 12 months, which is less than 4% of our total debt outstanding.

Speaker #1: We also have about $155 million of loans with fixed-rate terms that reset over the next year, though the loans themselves are not maturing.

Speaker #1: This includes about $133 million of loans under our MetLife facility that are scheduled to reprice in January 2027. Finally, regarding our common distributions, in April, we declared a monthly dividend of 4.67 cents per share for the second quarter of 2026.

Lewis Parrish: This includes about $133 million of loans under our MetLife facility that are scheduled to reprice in January 2027. Finally, regarding our common distributions, in April, we declared a monthly dividend of $0.0467 per share for Q2 2026. At our current stock price of $9.44, this represents a 5.9% annualized yield, which is above the REIT sector average. With that, I'll turn it back over to you.

Speaker #1: At our current stock price of $9.44, this represents a 5.9% annualized yield, which is above the REIT sector average.

Speaker #2: That I'll turn it back over to you.

Speaker #3: Okay. Thank you, Lewis. Overall, demand for prime farmland growing berries and vegetables and it's very stable right now in our regions, particularly along the coast where we are.

David Gladstone: Okay. Thank you, Lewis. Overall demand for prime farmland growing berries and vegetables, and it's very stable right now in our regions, particularly along the coast where we are. We're also starting to see some signs of improving in certain permanent crops, both in the pricing and the broader economies of those crops. We're hopeful that this is the worst, that all the things that happened to us in the last couple of years are behind us. It's too early to say that. You don't know what's gonna go with the crop, and that makes it difficult. We're just like many other REITs, that is different, belongs to the fact that our manufacturing facilities are outside, and they're also alive and growing. It's a different world that we're in, obviously, and it's very hard to predict.

Speaker #3: We're also starting to see some signs of improving in certain permanent crops, both in the pricing and the broader economies. For those crops, so we're hopeful that this is the worst that all the things that happened to us in the last couple of years are behind us.

Speaker #3: Let us too early to say that. You don't know what's going to go with it or the crop, and that makes it difficult. We're just like many other REITs, that is different belongs to the fact that our manufacturing facilities are outside, and they're also alive and growing.

Speaker #3: So it's a different world that we're in, obviously, and it's very hard to predict. In closing, over the long run, we expect inflation, particularly for food sector.

David Gladstone: In closing, over the long run, we expect inflation, particularly for the food sector, to continue to move higher. It doesn't seem to be any slowdown there. We expect the values of the underlying farmland to increase as well and over time. As a result, we should be in good shape in terms of collateral for all of our loans. We expect this especially to be true of healthy foods, such as the ones we grow. These are fresh fruits, vegetables, and nuts, and long-term trends toward healthier eating continue to push these products. Now we'll open it up for some questions. Latoya, if you'll come on and guide us through that.

Speaker #3: The food sector to continue to move higher. Doesn't seem to be any slowdown there. We expect the values of the underlying farmland to increase as well and over time, as a result, we should be in good shape in terms of collateral for all of our loans.

Speaker #3: We expect this especially to be true of healthy foods. Such as the ones we grow, these are fresh fruits and vegetables and nuts and long-term trends toward healthier eating continue to push these products.

Speaker #3: Now we'll open it up for some questions. So Latoya, if you'll come on and guide us through that.

Speaker #4: Sure. Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Sure. Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time. One moment while we pull for our first question. Our first question comes from Craig Kucera with Lucid Capital. Please proceed.

Speaker #4: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #4: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time.

Speaker #4: One moment while we post our first question. Our first question comes from Greg Gutierrez with Lucid Capital. Please proceed.

Speaker #5: Yeah. Hey, good morning, guys. I think last quarter you had thought you were going to get the marketing bonus in early April, clearly. A lot of it was recognized here in the first quarter.

Craig Kucera: Yeah. Hey, good morning, guys. I think last quarter you had thought you were gonna get the marketing bonus in early April. Clearly, a lot of it was recognized here in Q1. Is there any left that you will expect to recognize in Q2? Or we expect, you know, all of it kind of in the H2?

Speaker #5: Is there any left that you will expect to recognize in the second quarter, or will we expect all of it kind of in the back half of the year?

Speaker #6: So as far as cash well, speaking for the bonus specifically, we do expect to record a to be able to recognize the remaining part in Q4.

Lewis Parrish: Well, speaking for the bonus specifically, we do expect to record to be able to recognize the remaining part in Q4. As for the amount, we don't know yet, of course. If we had to guess, and I'm going to let Bill Ryman chime in on this too, but last year, the marketing bonus was when I say last year, I mean for the 2024 crop, it was $0.90 a pound. We don't know the full bonus yet, but the early bonus payment equated to about $0.50 a pound. Right now, I think we expect the total bonus to be higher than last year, but we don't know that for sure.

Speaker #6: As for the amount, I'll just give you our we don't know yet, of course, but if we had to guess, and I'm going to let Bill Ryman chime in on this too, but last year, the marketing bonus was when I say last year, I mean for the 24 crop, it was 90 cents a pound.

Speaker #6: And we don't know the full bonus yet, but the early bonus payment equated to about 50 cents a pound. So right now, I think we expect the total bonus to be higher than last year, but we don't know that for sure.

Speaker #6: But I think if we had to guess at a range, it'd be somewhere between that 40 cents per pound coming in Q4 or it could be much higher than that.

Lewis Parrish: I think if we had to guess at a range, it'd be somewhere between that $0.40 per pound coming in Q4, or it could be much higher than that. I'll let Bill chime in with any more insight to that bonus amount or what we're seeing prices doing.

Speaker #6: I'll let Bill chime in with any more insight to that bonus amount or what we're seeing prices doing.

Speaker #5: Yeah, Lewis, you nailed it. We're it's supposed to be higher than last year, and nobody's really revealing their cards yet. But yeah, 90 cents a pound last year, we've got 50 cents so far.

Bill Ryman: Yeah, Lewis, you nailed it. I, you know, It's supposed to be higher than last year and, you know, nobody's really revealing their cards yet. Yeah, $0.90 a pound last year. We've got $0.50 so far. You know, it could just be $0.40. It could be a full $0.90. We just Nobody's, nobody's really hinting at anything at this point, except that it's gonna be larger than last year.

Bill Reiman: Yeah, Lewis, you nailed it. I, you know, It's supposed to be higher than last year and, you know, nobody's really revealing their cards yet. Yeah, $0.90 a pound last year. We've got $0.50 so far. You know, it could just be $0.40. It could be a full $0.90. We just Nobody's, nobody's really hinting at anything at this point, except that it's gonna be larger than last year.

Speaker #5: It could be it could just be 40 cents. It could be a full 90 cents. We just nobody's really hinting at anything at this point except that it's going to be larger than last year.

Speaker #7: Got it. So roughly 50% plus or minus sounds probably pretty reasonable with maybe some upside. Okay, great. In the 10Q you referenced that less than 5% of California was in sort of a drought designation and you had some commentary on that.

Craig Kucera: Got it. Roughly 50% ± sounds probably pretty reasonable with maybe some upside.

Bill Ryman: Yeah.

Bill Reiman: Yeah.

Craig Kucera: Okay, great. In the 10-Q, you referenced that less than 5% of California was in sort of a drought designation and, you know, you had some commentary on that, but I am curious to hear your thoughts on how your Florida farms are performing thus far in 2026.

Speaker #7: But I'm curious to hear your thoughts on how your Florida farms are performing thus far in 2026.

Lewis Parrish: I think this is the first time since I've been here where California was not in a drought and Florida was. We haven't heard of any news on our farms being short on water to the extent where it's impacting the operations on the farms. And it is in a drought, and there are regulations coming through for certain farmers having to being called on to cover losses of wells going dry. We haven't heard of any issues with our farmers being short on water and covering their crops. Bill, if you have anything more to add on that.

Speaker #6: I think this is the first time since I've been here where California was not in a drought and Florida was. So definitely a reversal of fortunes there.

Speaker #6: We've had some, but we haven't heard of any news on our farms being short on water to the extent where it's impacting the operations on the farms.

Speaker #6: And it is in a drought, and there are regulations coming through for certain farmers having to being called on to cover losses of wells going dry.

Speaker #6: But we haven't heard of any issues with our farmers having being short on water and covering their crops. Bill, if you have anything more to add on that?

Speaker #5: Yeah. No, that's true. There hasn't been any restrictions, any there hasn't been any crop losses due to lack of irrigation water. We did have in the wintertime for frost control, we had some issues, but that's using water for frost control.

Bill Ryman: Yeah, no, that's true. There hasn't been any restrictions, any crop losses due to lack of irrigation water. You know, we did have in the wintertime for frost control, we had some issues, but you know, that's using water, you know, for frost control. It's uses a large amount of water. And we had a few issues with neighbors there. Other than that, there haven't been any crop impacts whatsoever.

Bill Reiman: Yeah, no, that's true. There hasn't been any restrictions, any crop losses due to lack of irrigation water. You know, we did have in the wintertime for frost control, we had some issues, but you know, that's using water, you know, for frost control. It's uses a large amount of water. And we had a few issues with neighbors there. Other than that, there haven't been any crop impacts whatsoever.

Speaker #5: It's a uses a large amount of water, but and we had a few issues with neighbors there. But other than that, there haven't been any crop impacts whatsoever.

Speaker #7: Okay. That's helpful.

Craig Kucera: Okay. That's helpful.

Speaker #3: And there's one footnote here that you should know about. We have a water farm in Florida. And it's got plenty of water. So we're not seeing any severe droughts going to be fine in Florida forever because you pretty much put a stick in the ground and it's water down there.

David Gladstone: There's one footnote here that you should know about. We have a water farm in Florida, and it's got plenty of water, so we're not seeing any severe drought situations down there. I think we're gonna be fine in Florida forever because you pretty much put a stick in the ground and it's water down there. It's a situation which the wind blows one day and it's cold, and then all of a sudden everything is bright and shiny as it is most days. Keep going, Craig. Got any more questions?

Speaker #3: So it's a situation which the wind blows one day and it's cold bright and shiny as it is most days. Keep going, Greg. Got any more questions?

Speaker #7: I do. I've got a handful more. David, you mentioned you might sell a few farms in the next couple of quarters. Last year, I think you sold about $90 million, maybe $70 million the year before.

Craig Kucera: I do. I've got a handful more. You know, David, you mentioned you might sell a few farms, you know, the next couple of quarters. You know, last year I think you sold about $90 million, maybe $70 million the year before. Can you kind of bracket the dollar amount you think you might wind up selling or can you do that at this point?

Speaker #7: Can you kind of bracket the dollar amount you think you might wind up selling? Or can you do that at this point?

David Gladstone: Oh, that's a difficult one. I don't know if you know it, in farming, selling a farm is a big to-do, and you never know when they're gonna follow through. We have one now in which we have a letter saying they're gonna buy it. We'll see. The lawyers are drafting, I'm glad to get rid of that one because it's gave us some problems in the past. I don't really have a number. I'm hopeful that we can sell a couple of farms, I don't think we need to sell more than that. We're pretty well covered in tenants that are working farms and the ones where we don't have a strong tenant and we've taken them over. These are the ones in California. We've got some good growers. I've been surprised.

Speaker #3: Oh, that's a difficult one. I don't know if you know it in farming. Selling a farm is a big to-do. And you never know when they're going to follow through.

Speaker #3: We have one now in which we have a letter saying they're going to buy it and we'll see. The lawyers are drafting and I'm glad to get rid of that one because it's gave us some problems in the past.

Speaker #3: But I don't really have a number. I'm hopeful that we can sell a couple of farms, but I don't think we need to sell more than that.

Speaker #3: We're pretty well covered in tenants that are working farms. And the ones where we don't have a strong tenant and we've taken them over, these are the ones in California.

Speaker #3: We've got some good growers. I've been surprised I didn't think it would work out as well, but last year it was just a boomer in terms of return on investment.

David Gladstone: I didn't think it would work out as well, but last year it was just a boomer in terms of return on investment. I guess we'll do maybe what we're doing somewhere between 2 and 5 farms.

Speaker #3: So I guess we'll do maybe what we're doing somewhere between 2 and 5 farms.

Speaker #6: It's a good range, yes.

Lewis Parrish: It's a good range. Yes.

Speaker #7: Okay. That's helpful.

Craig Kucera: Okay. That's helpful.

David Gladstone: He's gonna sell two to five farms. What you got, Craig?

Speaker #3: He's going to sell 2 to 5 farms. What you got, Greg?

Craig Kucera: To change gears, I'm curious about your leasing activity year to date. It looks like you moved one farm from fixed to participation rent. Can you give us some color on where that farm is located and what the crop type is?

Speaker #7: Do a change of gears. I'm curious about your leasing activity year to date. It looks like you moved one farm from fixed to participation rent.

Speaker #7: Can you give us some color on where that farm's located and what the crop type is?

Speaker #6: Yeah, that's a potato farm in Colorado. The base rent was basically cut in half, but we are expecting the variable rent component on that farm to get us pretty much right to where we were with the prior lease.

Lewis Parrish: That's a potato farm in Colorado. The base rent was basically cut in half and we are expecting the variable rent component on that farm to get us pretty much right to where we were with the prior lease. That's another variable that won't be known until H2 of the year.

Speaker #6: But that's another variable that won't be known until the second half of the year.

Speaker #7: Okay. And just one more for me. I mean, you've been pretty aggressive on issuing equity to take down the preferred. You got through the first round.

Craig Kucera: Okay. Just one more for me. I mean, you've been pretty aggressive on issuing equity to take down the preferred. You know, you got through the first round, you've got a couple others at 6%. Are you anticipate continuing to do that throughout the year?

Speaker #7: You've got a couple others at 6%. Are you anticipating continuing to do that throughout the year?

Speaker #6: The repurchase program on the Series B and C, yes. We would like to continue being active in that repurchase program.

Lewis Parrish: The repurchase program on the Series B and Series C, we would like to continue being active in that repurchase program.

Speaker #7: Okay. All right. Thanks. That's it for me.

Craig Kucera: Okay. All right. Thanks. That's it for me.

Speaker #5: Once again, ladies and gentlemen, to ask a question, that's star one on your telephone keypad. Our next question comes from John Masaka with B.

Operator: Once again, ladies and gentlemen, to ask a question, at star one on your telephone keypad. Our next question comes from John Massocca with B. Riley. Please proceed.

Speaker #5: Reilly. Please proceed.

Speaker #8: Hi. Good morning. This is Max stepping in for John. What is the outlook for releasing at Truly Vacant Properties either in terms of dispositions or releasing?

Max: Hi. Good morning. This is Max stepping in for John. What is the outlook for re-leasing at truly vacant properties, either in terms of dispositions or re-leasing?

Max Loyuk: Hi. Good morning. This is Max stepping in for John. What is the outlook for re-leasing at truly vacant properties, either in terms of dispositions or re-leasing?

Speaker #6: So I think the sorry. We have a few farms that we're working on. Right now, we're not producing income. They're vacant. As you mentioned, that we think we're pretty close to getting deals in place.

Lewis Parrish: We have a few farms that we're working on. Right now are not producing income. They're vacant, as you mentioned. We think we're pretty close to getting deals in place. It's not necessarily the traditional types of ag leases, we're working on alternative streams. For example, fallowing incentive programs, water leases, solar leases. We're discussing terms with potential tenants on these, and hopefully within the next 3 months or so, we can get some of these executed. The ones I'm specifically talking about, these are some of the larger farms in that vacant category. Hopefully within the next 3 to 6 months at most, we can get at least half of this acreage back to income producing.

Speaker #6: Now, it's not necessarily the traditional types of ag leases, but working on alternative streams. For example, following incentive programs, water leases. Solar leases. We've got we're discussing terms with potential tenants on these and hopefully within the get some of these executed.

Speaker #6: But the ones where the ones I'm m specifically talking about, these are some of the larger farms in that vacant category. So hopefully, within the next three to six months at most, we can get at least half of the acreage back to income producing.

Speaker #8: Great. Thank you. And could you remind us why the cost of sales is so low relative to crop sales? Was that because you already booked costs associated with that revenue, or was it something else?

Max: Great. Thank you. Could you remind us why the cost of sales is so low relative to crop sales? Was that because you already booked costs associated with that revenue or was it something else?

Max Loyuk: Great. Thank you. Could you remind us why the cost of sales is so low relative to crop sales? Was that because you already booked costs associated with that revenue or was it something else?

Speaker #6: Yes, exactly. This is related to the 25 crop. All those expenses were recognized in Q4 of last year as the crops were sold. But with pistachios, at that time, Q4, we only had we were only able to recognize the minimum payment associated with that crop.

Lewis Parrish: Yes, exactly. This is related to the 2025 crop. All those expenses were recognized in Q4 of last year as the crops were sold. With pistachios, at that time in Q4, we were only able to recognize the minimum payment associated with that crop. This is the bonus payment that we were not able to measure at the end of last year. That is just straight revenue, straight to the bottom line for us, as will be the remaining part of that crop, the bonus payment.

Speaker #6: This is the bonus payment that's it was we were not able to measure at the end of last year. So that's just straight revenue straight to the bottom line for us as will be the remaining part of that crop, the bonus payment.

Speaker #8: Got it. Thank you. And apologies if this was already discussed, but is there a timeline for getting the participation-based farms back to fixed-based rents?

Max: Got it. Thank you. Apologies if this was already discussed, but is there a timeline for getting the participation-based farms back to fixed base rents?

Max Loyuk: Got it. Thank you. Apologies if this was already discussed, but is there a timeline for getting the participation-based farms back to fixed base rents?

Speaker #6: We wish we knew that answer as well. It's definitely not for the 26-crop year. And I don't know, 27-crop year is still in flux, but if I had to guess, I think we'd be in a similar situation for the 27-crop year as well on a billion.

Lewis Parrish: We wish we knew that answer as well. It's definitely not for the 2026 crop year, and 2027 crop year is still in flux, but if I had to guess, I think we'd be in a similar situation for the 2027 crop year as well. Bill, what's your outlook on this?

Speaker #6: What's your outlook on this?

Speaker #7: Yeah. I mean, it's really the tenant pool. It's really difficult. Capital is constrained. Working capital is constrained for a lot of growers. And so until that loosens up, I just don't see I just don't see the number of growers willing to take on the risk on leasing just don't see just don't see that pool increasing in the near future.

Bill Ryman: Yeah, I mean, it's really the tenant pool, it's really difficult. You know, capital is constrained, working capital is constrained for a lot of growers. Until that loosens up, I just don't see the number of growers willing to take on, you know, the risk on leasing. I just don't see that pool increasing, you know, in the near future. Hopefully that turns around, you know, sooner rather than later. As of right now, we're probably stuck in this for at least another season.

Bill Reiman: Yeah, I mean, it's really the tenant pool, it's really difficult. You know, capital is constrained, working capital is constrained for a lot of growers. Until that loosens up, I just don't see the number of growers willing to take on, you know, the risk on leasing. I just don't see that pool increasing, you know, in the near future. Hopefully that turns around, you know, sooner rather than later. As of right now, we're probably stuck in this for at least another season.

Speaker #7: So hopefully, that turns around. Sooner rather than later. But as of right now, we're probably stuck in this for at least another season.

Speaker #8: Got it. Thank you. And is there any new distress in the portfolio? Has the rebound in Trina prices potentially mitigated credit risk somewhat?

Max: Got it. Thank you. Is there any new distress in the portfolio? Has the rebound in tree nut prices potentially mitigated credit risk somewhat?

Max Loyuk: Got it. Thank you. Is there any new distress in the portfolio? Has the rebound in tree nut prices potentially mitigated credit risk somewhat?

Speaker #7: A little bit, but a little bit. But for a lot of growers, the downturn in almond pricing, they're still paying the price for that, right?

Bill Ryman: A little bit, but a little bit, for a lot of growers, you know, that downturn in almond pricing, you know, they're still paying the price for that, right? It takes time. Prices have rebounded, obviously, for the last, you know, little over a year, 18 months. It takes, you know, it takes a couple of years of good prices to fill in the hole that, you know, that they, you know, that we dug for ourselves. You know, it takes a little bit of time to fully recover.

Bill Reiman: A little bit, but a little bit, for a lot of growers, you know, that downturn in almond pricing, you know, they're still paying the price for that, right? It takes time. Prices have rebounded, obviously, for the last, you know, little over a year, 18 months. It takes, you know, it takes a couple of years of good prices to fill in the hole that, you know, that they, you know, that we dug for ourselves. You know, it takes a little bit of time to fully recover.

Speaker #7: It takes time. Prices have rebounded, obviously, for the last a little over a year, 18 months. But it takes a couple of years of good prices to fill in the hole that the that they that we dug for ourselves.

Speaker #7: So it takes a little bit of time to fully recover.

Speaker #8: Thank you. And then one more for me. On the Series B buyback, how are you thinking about that as a use of cash flow capital raising versus paying down amounts on the revolver?

Max: Thank you. Then one more for me. On the Series B buyback, how are you thinking about that as a use of cash flow, capital raising versus paying down amounts on the revolver?

Max Loyuk: Thank you. Then one more for me. On the Series B buyback, how are you thinking about that as a use of cash flow, capital raising versus paying down amounts on the revolver?

Speaker #6: So the revolver now is fully repaid to the minimum balance. That was our with the ATM proceeds and also some proceeds we had from a farm sales of last at the end of last year.

Lewis Parrish: The revolver now is fully repaid to the minimum balance. With the ATM proceeds and also some proceeds we had from farm sales at the end of last year, we used that to pay down the line of credit, which is again, fully down to its minimum balance. Most of the excess has been going into the preferred repurchase program. Series B, Series C. We'd love to buy more of it back than we are right now, but, you know, these are two thinly traded securities, so we're limited with how much we can buy back on a daily basis. We wanna continue making the best use that we can. We're buying back at a 7.4% yield right now.

Speaker #6: We use that to pay down the line of credit, which is, again, fully down to its minimum balance. And then most of the excess is going into the preferred repurchase program.

Speaker #6: So Series B, Series C. We love to buy more of it back than we are right now, but these are two thinly traded securities.

Speaker #6: So we're limited with how much we can buy back on a daily basis. But we want to continue making the best use that we can.

Speaker #6: We're buying back at a 7.4% yield right now. So the comment that we raised was at about 5.5%, 5.6%. That's a spread we'll take any day.

Lewis Parrish: The comment that we raised was at about 5.5.6%. Now that's a spread we'll take any day.

Speaker #8: Thank you. That's it for me. Thank you.

Max: Thank you. That's it for me. Thank you.

Max Loyuk: Thank you. That's it for me. Thank you.

Speaker #5: And just to remind Max, this is a situation that's ongoing day by day. If you could lob a few calls into the people who set the interest rates and get them to push them back to 3.5% where we used to borrow, that would be nice.

David Gladstone: Just to remind Max, this is a situation that's ongoing day by day. If you could lob a few calls into the people who set interest rates and get them to push them back to 3.5% where we used to borrow, that would be nice because we could eliminate a lot of preferred stock, and that would help our earnings. Latoya, would you come on now and close this up for us? That's the end of the day.

Speaker #5: Because we could eliminate a lot of preferred stock, and that would help our earnings. LaToya, would you come on now and close this up for us?

Speaker #5: That's the end of the day.

Speaker #9: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

Operator: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.