to our Executive Chairman, Paul Pittman.

Paul?

Thank you, Christine. This was actually a pretty good quarter for us, and frankly, a very mundane quarter. No real surprising events. Everything's kind of performing as expected and as projected. So you'll hear me back at the Q&A, but I'm going to turn it over to Luca so we don't end up repeating the same things.

Thank you, Paul. This was a pretty strong quarter performance-wise to the extent that we actually even marginally adjusted guidance upwards on the low end for the remainder of the year for AFFO. But as Paul said, relatively uneventful quarter as typically Q2 and Q3 of the year are in the middle of the year. We continue evaluating asset dispositions through the end of the year, especially non-core assets like in California. And we're also actively monitoring the conditions in the agriculture world as far as timing of our lease renewals. We have held back so far in pushing lease renewals for the next year because financial conditions are not ideal, to say the least, among our tenants. but we do have very very strong tenants in our pool so and this is not the first year of relatively middling performance in their in their financials so there is nothing particularly new that we expect but we are hoping for a little bit of better news before we kick off the list renewal cycle in in higher gear and with that i will now turn the call over to our cfo susan Landy for her overview of the company's financial performance. Susan.

Thank you, Luca. I'm going to cover a few items today, including the summary of the three and six months ended June 30, 2026, a review of our capital structure, and updated guidance for 2026. I'll be referring to the supplemental package, which is available in the investor relations section of our website under the subheader events and presentations. First, I want to share a few metrics that appear on page For the three-month end of June 30, 2026, net income was $3.1 million, or $0.07, per share available to common stockholders versus $7.8 million, or $0.15, per share available to common stockholders for the same period in 2025. AFFO was $1.7 million, or $0.04 per weighted average share, compared to $1.3 million, or $0.03 per weighted average share, for the same period in 2025. For the six months ended June 30, 2026, net income was $3.8 million, or $0.08 a share, available to common stockholders, versus $9.9 million, or $0.18 a share, available to common stockholders for the same period in 2025. AFFO was $3.8 million, or $0.09 per weighted average share, compared to $3.6 million and $0.08 per weighted average share for the same period of 2025. Page five shows a more comprehensive look at the main drivers of these changes year over year. On the revenue side, we were positively impacted by higher interest income, which is due to higher average balance on the loans under the FPI loan program and financing receivables. an increase in amortization of points, and higher proceeds from oil and gas royalties. These increases were partially offset by lower rental income due to asset dispositions occurring in the prior year. Operating expenses declined on a quarter-to-date and year-to-date basis over prior year. Some of these declines are to be expected with the property dispositions that occurred in the prior year, but there were also other reductions to G&A and legal fees, including a reduction in property impairment charges. These declines were partially offset by an increase in the provision for credit loss allowance related to loans under the FPI loan program. Overall, we saw a reduction in net income and EPS for both quarter to date and a year to date basis. The primary driver for the reduction relates to a decrease in the net gain on disposition of assets as a result of fewer property dispositions in the current year versus the prior year. AFFO per weighted average share is up by a penny for the three and six months ended period of the current year. On page 12, there are a few capital structure items that I'd like to point out. The first is that we had undrawn capacity on the lines of credit of approximately $122 million at the end of Q2 2026. There were repayments of $8 million dollars during the quarter, but no borrowings. We had one MetLife loan with a rate reset that occurring during the second quarter. In addition, one loan was extended by one year. The average rate on these loans decreased from 5.64% to 5.25%. Moving on to page 15, it'll show you the updated outlook for 2026. The assumptions are listed at the bottom of the page. On the revenue side, changes from the April guidance include an increase in our outlook on variable lease payments. On the expense side, changes from the April guidance include increases as a result of additional provision for credit loss allowances on loans receivable and an increase in impairment related to updated market valuations in connection with one of our west coast properties. and these were partially offset by a 3.6 million dollar gain on a property disposition. The forecasted range of AFFO is 13.5 million to 15.3 million or 31 cents to 35 cents per share which is an increase from the prior quarter on the low end of the range. The high end of the range remained unchanged. This summarizes where we stand today. We will keep you updated as we progress through the year. This does wrap up our comments for this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

So operator, while you're compiling that roster, this is Paul. I'm just going to chime in on a couple of questions that we got via email and give those answers, and then we'll go to questions and answers from the audience. So we got a question regarding kind of how we're managing the building of reserves as it relates to credit losses. And while we, frankly, as a business matter, think we will collect 100% of all of our outstanding loans, our loan program, as you all know, is frankly a relatively high-risk program. We're making loans to people who are in distress. We're often getting 15 or 20 percent interest rates. And so we believe it's prudent to gradually build those reserves with a certain hope to reverse them. But it's better to build those reserves and reverse them later than, frankly, not to build any reserves and then get caught holding the bag. So it's really nothing unusual. The size of our loan program today is reasonably large, about $60 million total. total. And so that's why you're seeing these reserves built. In this particular quarter, I don't think the additional reserve was particularly high. The other question we got over the internet, or I mean, over email, was a question about legal expense, which shows up on the P&L, illegal and accounting at about 312,000. And is that indicative of some significant litigation that's going on? And the answer to that question is no. That 312,000 is two-thirds either audit or tax fees, which is, you know, show up in the second quarter. That's when we get those. And so that's really the bulk of it. The litigation was only about 25,000 of that 312. We continue to have the litigation on a farm in Louisiana with some prior tenant dispute. And we also have, you know, of course, the litigation regarding Saber Point continues to go on. But as you can see from that $25,000 spend, there's not a whole lot happening right now in either of those cases. With that, we can go to whatever Q&A came in with you, operator.

The first question comes from the line of Craig Cucera, with Elucid Capital. Your line is open. Please go ahead.

Yeah, thanks. I appreciate the color on the credit loss provision, but I'm curious, you know, that was affiliated with one operator that I think you mentioned and had some trouble. Was this for the same borrower or a different loan?

No, we're building it related to the same borrower. We evaluate every borrower, but the bulk of it is related to the same borrower we've talked about in the past. And we just, you know, we're continuing to monitor the situation. You know, one of the things you're up against in any of these cases, in any of these sort of distressed situations, as long as the principle that we deal with, meaning the individual human beings that we're dealing with, keep control of the situation, you know, we're making loans with some relatively steep terms with strong, you know, what we think is strong collateral and, you know, with people, you know, strong, strong intent to pay it back. And so far in our loan program, you know, we've been doing this now a dozen years. You know, we haven't had anybody not pay us. But the risk you face is that someone loses control of their situation to bankruptcy, for example, or something else. And then you're dealing with not, you know, a loan made to a person who who we know who has intent of paying us back. You're just kind of dealing with a nameless, faceless, you know, court process. And, you know, that's that's really where and why we feel prudent to build reserves over time is because we're watching these lend these borrowers in some sort of trouble. Our fear is that they lose control of their situation. And then our security position from a, you know, from a legal standpoint doesn't really change. But from a moral standpoint, if you will, does change.

And that that's what that's what's going on here. okay that's that's helpful i appreciate that um so i know you guys mentioned you're looking to do more dispositions out of california but but where was the disposition this quarter was that was that on the west coast or was that elsewhere luca you want to take that one yeah no it was it was elsewhere it was actually the strong gain was related to the fact that this is a solar development on the farm and we actually sold the farm to the developer itself and the value to them was much higher than the agricultural value so we we locked in that game that was that was in Illinois correct that is correct okay now I was going to be impressed if you if you had a book to three

and a half million gain out of California so just double check that we would have celebrated as well trust me, Greg. Right. So there was an increase in your expectations regarding citrus and avocado revenue flowing through the guidance on variable payments. Is that more of a pricing or a volume situation that you're expecting?

The increase in variable rent is actually more related to almonds is, and in particular, as the year goes, you know, moves, moves along, we get better visibility on both yield and pricing. So we tend to be on variable rents, very cautious at the beginning of the year, we, you know, we've, we've had some pretty bad performances, you know, a couple of years ago on almonds, for example. And then as I said, as the year goes along, we have a little be more visibility into the expected performance and that's exactly what happened in this case.

Okay that's it for me thank you.

The next question comes from the line of John Masocha with B Riley. Your line is open please go ahead.

Good morning everyone. Maybe sticking with the assets that had a little bit more of a variable revenue stream just to kind of clarify then And is the commentary around some of the citrus and avocado what's driving the slight decrease in maybe expectations for crop sales and a little bit of crop insurance coming into the guidance?

Susan, do you want to chime in on the specific details? Because the big mover this quarter was on the almond side.

Yeah, I mean, as far as the direct ops go, there was a little bit of a decline due to a softening market within the citrus. and yields being down a little bit due to, you know, weather events in California.

Okay, that makes sense. And then, you know, given the kind of capacity you have today with regards to kind of debt availability versus kind of how the stocks performed, how are you thinking about the buyback? Is that something that's more levered to disposition proceeds, or would you be comfortable kind of using leverage to kind of, you know, reactivate that program?

Our buyback program is first driven by, you know, stock price and then by cash availability. You know, we can at any point in time enter the market for buybacks, you know, if we think the price is highly accretive to the remaining shares outstanding. At this price, we frankly think it is pretty accretive, but it's, you know, we, you know, the borrowing cost here is reasonably steep, you know, mid call it mid fives, give or take, you know, a few basis points either way. And so, you know, we're always struggling with the, you know, you want to borrow money to buy back a stock that's, you know, yielding on the dividend three and a half or something like that, three, three and three, maybe 3.4, you know, versus a five and a half borrowing. And so that's really the kind of challenge that we we kind of face and struggle with there. So to answer your question specifically, we will borrow to run a kind of to run a disciplined buyback program from time to time. But we certainly, even if we're technically borrowing to execute on a given day, we've really got a sell assets to backfill mentality because we don't want to run that negative spread for a long period of time. Okay.

And then kind of bigger picture, I know we talked about this last quarter, but as some of the macroeconomic volatility and kind of the elevated energy prices have kind of persisted, how is that kind of impacting your tenants? You kind of mentioned that you're holding off a little bit on kind of pushing renewals, given the financial situation in the broader, you know, farmer industry. But I didn't know if that's something that's changed at all since we last talked or become a little bit more negative since we last talked, or if it's just kind of the same theme as maybe from Paul at March of this year.

Yeah, it's pretty much the same theme, but let me give you a little more context. So if we think if we think that, you know, farmers are are kind of rolling in dough and they're and they're really happy and exuberant when you get to the to the, you know, call it early summer. We will aggressively pursue leasing in the summer. And the reason is you never know what's going to happen come fall. You suddenly have a huge bumper crop. Prices go down. You know, to be honest, farmers, even though they they may make it back up on volume, they're depressed because because corn prices and bean prices went down. Alternatively, if you find yourself in a situation in the early summer where the crop prices are kind of ho-hum, you kind of hang back and maintain your optionality. We think you're going to see, you know, we think that this isn't going to be the same kind of bumper crop we've seen in the last couple of years, basically due to weather going on in the United States, as well as kind of worldwide weather shocks because it's a, you know, it's a global market. So our tendency, you know, and don't take don't go trade commodities based on that statement. It's just we have a strong enough view about that, that we're not rushing to get the leasing process done. We think there's a materially better chance of upside than downside, so why not hang back? I would expect that this year's leasing process is a lot like last year's. It will be a flat year in most cases and maybe up just a little bit. We often have cost of living adjustments in our leases over the term. And so even if you don't bump rent materially in the renegotiation, you'll leave the COLA clause in there, which gives you an increase over years.

But that's what we think will happen right now. with a you know with some hope that it actually turns out to be better than that which is why we're not trying to lock in on a ton of leases yet but you know by the time we get around to september we got to get started on it just because we run out of time otherwise okay um and then kind of with regards to some of the west coast properties particularly the trina assets you So is there any read through to kind of the increase in your variable rent expectations and maybe some thoughts that that market is firming that could loosen up some disposition opportunities specifically there? Or is that still kind of a challenged market from a transaction perspective?

So it is a challenged market from a transaction perspective, but probably less challenged than it was six months ago. I think you've reached in California, I think a prior set of questions kind of brought this up. California agriculture is in a terrible, terrible spot. I mean, it's in the worst spot I've seen it, frankly, in my lifetime. And I'm 64. It is a combination of, frankly, bad policy in the state, actual decline in water availability, but more so political decline in water availability and a state that is not supportive of how farm labor has to work. So the costs of farm labor are going up dramatically in the state. And so what you're seeing is a real pressure on everybody that owns land in California and the specialty crops in particular. So what you're seeing in terms of almond price adjustment is just a simple supply demand of this year's almond crop or international crops in the last 12 months. I don't think that makes some big dramatic improvement in the market for tree nuts or citrus or anything else in California. But what it does is it certainly helps on the cash flow on those assets this year. Our perspective is that, and we've been this way now for several years, and compared to other fund managers, we frankly have quite a bit less exposure in California than most of them as a percentage of our total portfolio. So, you know, we're still on a process of gradually liquidating those properties in California because we are long-term bearish on California outlook. And we think it's just prudent to cut back our exposure and either use that money to buy back stock or reinvest, frankly, in the core of the Midwest.

I appreciate all that color. That's it for me.

There are no further questions at this time. I will now turn the call back to Luca for closing remarks.

Thank you, Erica, and thank you, everybody. We appreciate your interest in our company. I look forward to updating you on our activities and results in the coming quarters. Have a great rest of your day.

This concludes today's call. Thank you for attending. You may now disconnect.